INSIDER SECRET: You can effectively get “paid” $5 a year to keep this card open if you max out the $100 annual airline incidental credit.
While cash-back credit cards aren’t going to get you into fancy first class cabins or 5-star hotels, they can offer solid rewards without the hassle of having to find award space. And every time an airline devalues its award chart or adds some new award booking restriction, they start to look a little more attractive by comparison.
Enter the Bank of America® Premium Rewards® credit card, which has a welcome bonus of 50,000 points (worth $500) after spending $3,000 on purchases in the first 90 days of account opening. You’ll also earn 2 points per $1 on travel and dining, and 1.5 points per $1 on everything else. These numbers climb even higher for certain Bank of America customers, giving you a real incentive to park some of your savings with Bank of America in order to maximize returns with this card.
You can apply for the Bank of America Premium Rewards credit card here.
Let’s dive into our Bank of America Premium Rewards credit card review.
Bank of America Premium Rewards credit card Review
Apply Here: Bank of America® Premium Rewards® credit card
One area where cash back cards historically fall flat (compared to points and miles earning cards) is with the sign-up bonus, but the Bank of America Premium Rewards holds its ground here. You’ll earn 50,000 bonus points (worth $500) after spending $3,000 on purchases in the first 90 days of account opening.
While you can take the cash back rewards and save or invest your money, you can also use it to further your travel goals. The Premium Rewards card can be a great way to cover travel costs that are hard to pay for with points and miles — things like taxes on award tickets, tour groups and activities, or meals.
How to Earn Points With the Bank of America Premium Rewards
While this is technically a cash-back card, you’ll earn your rewards in the form of “points” that are worth a fixed 1 cent each, similar to the Chase Freedom Unlimited®.
The Bank of America Premium Rewards offers strong earning rates for everyday non-bonus spending and for travel and dining purchases, but your exact earning rates will depend on your banking relationship with Bank of America. Specifically, it depends on whether you’re eligible to enroll in Bank of America’s Preferred Rewards Program. To qualify you’ll need to meet the following requirements:
An eligible Bank of America personal checking account and a 3-month average combined balance of $20,000 or more in a Bank of America account and/or Merrill Edge or Merrill Lynch investment accounts.
From there you’ll be assigned a level based on the combined balance of your eligible accounts and earn rewards at the following rates:
|Bonus Categories||Regular Cardholder||Gold Members ($20,000-$50,000)||Platinum Members ($50,000-$100,000)||Platinum Honors Members ($100,000+)|
|Travel & Dining||2 points per $1||2.5 points per $1||3 points per $1||3.5 points per $1|
|All Other Purchases||1.5 points per $1||1.875 points $1||2.25 points per $1||2.625 points per $1|
If you already bank with Bank of America this can be especially good news. If not, this card might be reason enough to consider switching. For regular cardholders this isn’t the best cashback card out there (you’d probably be better off with the simplicity of a Citi® Double Cash Card) but if you can hit the Platinum or Platinum Honors tier this card starts to get very rewarding.
The 2.625% back on every single purchase you make is one of the best options you’re going to find anywhere on the market, and even rivals transferable points cards like the Capital One® Venture® Rewards Credit Card. The 3.5% on travel and dining doesn’t stack up as well to cards like the Chase Sapphire Reserve, but there’s something to be said for getting a solid earning rate with a manageable fee. If you’re eligible for the Preferred Rewards program, it really tips the scale in favor of this card.
How to Use Points From the Bank of America Premium Rewards
Even though points from the Bank of America Premium Rewards are worth a fixed 1 cent each, you have a few different options for how you can redeem them. While they might seem pretty interchangeable, there is a clear winner.
- Cash back: You can redeem your rewards for a statement credit or deposit it into an eligible Bank of America, Merrill Lynch or 529 account
- Travel purchases: You can use your points to book flights directly through the Bank of America travel portal
- Gift cards: You can redeem your points for gift cards at popular merchants like Amazon or Starbucks
No matter how you plan to use your bonus cash, you should always redeem for a statement credit or a deposit into your bank account. Even if you’re planning to book flights, you should charge those purchases to your card and earn an extra 2%-3.5% back, and use your cash back to pay off the bill (same with gift cards — you’ll earn more rewards charging that purchase to your card and using the cash back to pay it off).
Transferable points and miles offer the most outsized redemption values, but a good cash-back card can play an important complementary role in your travel rewards strategy. Some of the most prized redemptions (be it Emirates first class or a Maldivian vacation) now come with hundreds of dollars in unavoidable taxes. Having some bonus cash back floating around can help you offset those costs, and keep your “free” travel as close to free as possible.
Bank of America Premium Rewards Benefits
$100 Annual Airline Incidental Credit
With the Bank of America Premium Rewards, you’ll receive up to $100 each calendar year in airline incidental fee credit. Similar to the credits on The Platinum Card® from American Express, you can’t use it directly to purchase airfare. It’s valid for ancillary fees like preferred seating upgrades, ticket change or cancellation fees, checked baggage fees, inflight entertainment, inflight food and drink and airport lounge fees.
Only certain domestic airlines are eligible to receive this credit, but it will be automatically applied to your account without you having to do any extra work. Obviously this credit is a bit more restrictive than the travel credit on the Chase Sapphire Reserve, for example, but if you can max it out you’ll effectively get “paid” $5 each year to keep the card open, because it more than offsets the $95 annual fee.
Global Entry/TSA PreCheck Credit
This perk has become almost laughably ubiquitous at this point, with dozens of different cards offering a TSA PreCheck or Global Entry credit. However, the Bank of America Premium Rewards card (ironically enough) is one of the only non-premium credit cards to offer it. You’ll get a statement credit for your Global Entry ($100) or TSA PreCheck ($85) application fee every four years.
If you don’t already have Global Entry, or you’re looking to gift it to a friend or family member, a card with a $95 annual fee is one of the cheapest ways to get it.
Trip Cancellation/Trip Interruption Insurance
When I’m booking a long trip, it’s important to me that I pick a card with good insurance benefits and not just the card that offers the most bonus points. The Bank of America Premium Rewards card offers reimbursement of up to $5,000 per person per trip for unused, prepaid, non-refundable travel expenses including passenger fares, tours and hotels if you have to cancel due to a covered reason.
Trip Delay Insurance
With the Bank of America Premium Rewards, you’ll also be eligible for up to $500 in reimbursements (meals, hotel, etc.) if your flight is delayed more than 12 hours.
Baggage Loss/Delay Insurance
If you’re ever experienced that heart-wrenching moment when the baggage carousel turns off and your suitcase is nowhere to be seen, then Bank of America Premium Rewards has you covered. If your bag is lost, stolen or damaged you’ll be eligible for reimbursement for the contents of the bag. If your bag is delayed more than six hours, you’ll be eligible for reimbursement for essential items (toiletries, clothing, etc.) of up to $100 per day for up to five days.
Rental Car Insurance
You’ll get secondary insurance benefits when renting a car with the Bank of America Premium Rewards, which kick in after your own personal policy. This is definitely not as good as the primary car rental insurance offered by other credit cards, but it’s certainly better than nothing and can help you out when you need it most.
The Bank of America Premium Rewards credit card will pay up to $10,000 to replace, repair or reimburse you for lost or damaged items purchased on the card. You can also be reimbursed up to $250 per claim (up to $1,000 per year) if you attempt to return an item within 90 days and the merchant doesn’t accept it.
Is the Bank of America Premium Rewards Worth The Annual Fee?
We spend a lot of time in the travel rewards world trying to justify to ourselves why it’s worth it to pay $450 or more for cards that offer a long list of luxury travel benefits.
Rarely do we come across math as simple as we do with this card: Pay $95 a year, get $100 in airline fees reimbursed. This card is cash flow positive before you even begin to account for the $500 welcome bonus or long-term earning potential, so it’s a no-brainer to get and keep.
Does the Bank of America Premium Rewards Charge Foreign Transaction Fees?
Similar Cards to the Bank of America Premium Rewards
Apply Here: Capital One® Venture® Rewards Credit Card
Read our review of the Capital One Venture
When it comes to low fee fixed value cards, the obvious comparison is the Capital One Venture Rewards card. The Venture’s $95 annual fee is waived the first year, and it offers a similar simple earning structure of 2x miles per dollar on all purchases, except for at hotels.com where it earns a whopping 10x miles per dollar when you book through this Hotels.com link (through January 31, 2020).
In terms of a pure cash-back card the Venture is more restricted, in that you can only use Capital One miles to erase eligible travel purchases from your statement. However, you can also transfer your miles to 15 different airline partners, allowing you to pick and choose between fixed value redemptions and transferable points all in a single card.
The Capital One Venture also offers a 50,000 mile sign-up bonus (worth $500 in travel). On the surface that’s worth the same $500 as the Premium Rewards card, but you could squeeze more value from the bonus transferring those miles to the right Capital One airline transfer partner.
The Bank of America Premium Rewards credit card has a lot of things going for it: a stronger sign-up bonus than most cash-back cards, generous perks and statement credits that more than offset the small annual fee, and a variable earning structure that gets more rewarding the more you bank with Bank of America.
Whether this card is right for you depends primarily on whether you qualify for the Preferred Rewards program in order to get higher bonus multipliers, but if you can put $20,000 or more in eligible Bank of America accounts, this card starts to become a very compelling complement to your points and miles earning cards.
For more about cash-back credit cards, check out these posts:
- Cash back credit cards are an essential part of every traveler’s wallet
- The best cash back credit cards
- The best cash back credit cards with no foreign transaction fees
- The best cash back business credit cards
For the latest tips and tricks on traveling big without spending a fortune, please subscribe to the Million Mile Secrets daily email newsletter.