Bank of America Premium Rewards Credit Card Review

It seems that Bank of America is really trying to listen to customers. It is now offering a premium credit card that gives you the perks of a travel rewards card, the earning potential of a traditional cash back program and the exclusivity of premium rewards.

The Bank of America Premium Rewards card delivers up to $200 in travel credits and exclusive deals through its Visa Signature partnership. One of the impressive features is the ability to earn 2 points for every dollar you spend trekking the globe and eating out. You can also earn a sign-up bonus worth $500.

• Earn 2 points for each dollar spent on travel and dining and 1.5 points for all other purchases
• Preferred rewards members get a 25 to 75 percent increase in points
• 50,000 sign up bonus points, worth $500, for users who make $3,000 in purchases in the initial 90 days
• Annual fee of $95, low for a premium card
• Premium benefits include travel-related credits

Earning Rewards

The Bank of America Premium Rewards credit card offers 2 points for every dollar spent on travel and dining, with all other purchases earning 1.5 points. Qualified expenses under dining range from fast food restaurants to bars. Flights, trailer rentals, limousines and art gallery admissions are a few examples of the travel purchases that qualify for 2 points per dollar.

The points are unlimited and face no expiration date, as long as your account is in good standing.

As a sign-up bonus, Bank of America will give you 50,000 in bonus points, a $500 value, if you make at least $3,000 in purchases within the initial 90 days of opening the account.

You can access your points once you’ve earned a minimum of 2,500 points, or $25. One point redeemed is worth $0.01 or 1%, therefore 2,500 points equals $25.

Preferred Rewards Program

If you are enrolled in the preferred rewards program, your points can increase by 25% to 75%; that’s up to 3.5 points for every dollar spent on travel and dining and up to 2.62 points per dollar for all other purchases.

Bank of America offers the preferred rewards program to its customers who have a combined minimum balance of $20,000 in their banking and investment accounts. The program is divided into three tiers:

• $20,000 to $50,000 is the gold tier;
• $50,000 to $100,000 is the platinum tier; and
• $100,000 and over is the platinum honors.

The gold tier increases rewards by 25%. To simplify calculations further, that’s 2.5 points per $1 spent on travel and dining and 1.875 points for other purchases. At the platinum level, Bank of America boosts your rewards by 50%, meaning 3 points per travel and dining dollar and 2.25 points for non-travel purchases.  And platinum honors ups you to 75%, netting 3.5 points per travel-related dollar and 2.62 points for all other purchases.

As an example, let’s assume that within three months you put $1,500 of travel on your premium rewards credit card along with $600 of other purchases. The total equals $2,100, which is 3,900 points ($39.00 cash back). With the 25% rewards bonus, your points increase to 4,875 ($48.75); with the 50% rewards bonus, you would get 5,850 points ($58.50) and with the 75% rewards bonus, you would get 6,825 points ($68.25).

You’ll find a handy calculator on the BofA site that helps you estimate the rewards you’ll earn based on your spending habits.

Redeeming Rewards

Out of much demand from its customers, Bank of America enhanced its redemption options. You can redeem points:

• As cash back on a statement credit or a deposit
• To make travel purchases
• By trading them in for gift cards

Deposits can go into Bank of America banking accounts; Merrill Lynch’s cash management accounts; its online brokerage platform, Merrill Edge; and Merrill’s 529 educational savings accounts. Travel purchases can be redeemed through Bank of America’s travel center.

Accumulating points and using your rewards should be easy, if you use the card for everyday expenses.

As an example, according to the Economic Policy Institute, a family of four in Fairfax, VA spends an average of $9,509 a month on everything from housing, to health care to taxes. Assuming 50% of these expenses can be charged to a credit card, the yearly total charged would equal $57,053. At 1.5 points per $1, that’s over 85,000 points or over $850 in cash back rewards. If you are in the preferred rewards program, your earnings increase by 25%, 50% or 75%.

• $100 Annual Airline Incidental Credit: The annual airline incidental statement credit covers up to $100 in seat upgrades, baggage fees, in-flight services and airport lounge fees.
• Travel Insurance Protections: Protections include trip delays, cancellations and interruptions, emergency evacuations and the transportation needed, lost luggage and baggage delay inconvenience.
• TSA Precheck Credit: You can use the card to pay for the Transportation Security Administration’s expedited screening program or the Global Entry program, which includes the TSA Precheck program, and receive a statement credit. The card allows for one credit per account every four years as the TSA Precheck and the Global Entry are five-year membership programs.
• Access To Visa’s Signature Services: You can make your upscale travel purchases through Visa’s Signature Luxury Hotel Collection of over 900 hotels and its Concierge service. The Luxury Hotel Collection features best-available rate guarantee, room upgrades, late checkouts, free in-room Wi-Fi and late check-out, when available. You will also receive a complimentary breakfast for two and $25 food or beverage credit with your bookings. The Concierge service provides personal assistance for travel planning, restaurant recommendations and event reservations.
• No Foreign Transaction Fees
• $0 Liability for Unauthorized Charges

Interest Rates

• APR on Purchases and Balance Transfers: 18.24% – 25.24% Variable APR on purchases and balance transfers
• APR for Cash Advance: 26.99% for bank cash advances and 20.99% to 26.99% for direct deposit and check cash advances.
• Penalty APR: up to 29.99% APR
• Grace Period: At least 25 days

Fees

• Annual Fee: $95
• Balance Transfer Fee: Either $10 or 3% of the amount of each transaction, whichever is greater.
• Cash Advance: $10 or 3% of the amount of the cash advance, whichever is greater
• Foreign Purchase Transaction: None
• Late Penalty: up to $38
• Returned Payment: Up to $27

What we like

• No foreign transaction fees
• TSA Precheck credit
• Flexible reward redemption options
• $500 introductory offer
• $0 liability guarantee

What could be better

• Balance transfers cost 3% of the amount transferred
• The cash advance APR is high

The Bank of America Premium Rewards card is a decent travel rewards card for those who are not novice travelers but are also not traveling heavily enough to justify the $450 annual fee you must pay for Chase Sapphire Reserve. It offers plenty of opportunities to earn points and its rewards, depending on how often you use the card, outweigh the annual $95 fee.

This card does not offer a lot of complementary features (e.g. free use of airport lounges) that some other premium and travel rewards cards offer. However, its travel protections and flexible reward redemptions are competitive advantages against cards such as Chase Sapphire Preferred and Venture from Capital One.