Banking

How Does Cash Rewards Work Bank Of America

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

When it comes to cash rewards, the Bank of America Customized Cash Rewards Credit Card stands out from the crowd. It boasts a generous sign-up bonus, a lengthy 0% intro APR promotion for both purchases and debt transfers, and a rewards program that offers up to 3% cash back on qualified purchases.

It’s time you looked into the Bank of America Customized Cash Rewards card if you’re in the market for a new rewards credit card. In addition, the offer may be sweetened if you are already a Bank of America customer or are willing to start a qualified banking account with the banking behemoth.

Read on for all the details you’ll need to make a well-informed decision regarding this card.

Key Characteristics

Bank of America Customized Cash Rewards Credit Card highlights include a tiered rewards program, competitive sign-up bonus for new cardholders, and introductory APR promotion for both purchases and balance transfers.

Welcome Bonus

With this online cash rewards program, you can earn a $200 incentive after spending $1,000 in the first 90 days.

Earning Rewards

The Bank of America Personalized Cash Rewards program consists of three tiers; Get a starting 3% rebate in any one spending category. It’s your pick from the following:

  • Gas
  • Online shopping
  • Dining
  • Travel
  • Home furnishings/home improvements
  • Drugstores

Second, all purchases made in food stores and wholesale clubs qualify for a 2% rebate. Third, get 1% rebates on other purchases that qualify. Each quarter, you can earn a maximum of $2,500 in total cash back from the 2% and 3% cash back categories combined. 

Once you meet your quarterly spending goal, you’ll start earning 1% cash back on those categories. By default, the 3% cash back category on your new card will be for gas purchases. Bank of America allows you to switch your 3% category as often as once a month via their website or mobile app.

Redeeming Prizes

Statement credits and direct payments to a qualifying Bank of America account are the most liquid forms of redemption for collected rewards.

Bonus Rewards for Members of the Preferred Rewards Program

Members of Bank of America Preferred Rewards receive a greater percentage of their qualifying purchases back in cash than do other Bank of America customers. 

Here’s how the various levels of cash-back bonuses work:

  • Members of Bank of America’s Gold Preferred Rewards (those who maintain at least $20,000 in investment, checking, and/or savings account balances with Bank of America and/or Merrill Lynch) are eligible for a 25% bonus on Bank of America Customized Cash Rewards purchases.
  • Spending rewards for BofA and Merrill Lynch Platinum Preferred Rewards members (those with at least $50,000 in qualifying account balances) increase by a factor of 50%.
  • Spending rewards for Platinum Honors Preferred Rewards members (those with $100,000+ in qualifying account balances) are increased by 75%.

APR Promotion Induction

Get 15 months of no interest on purchases and balance transfers. There is a 60-day window starting from the day you open your account during which you can make a balance transfer that will be considered eligible. After that period, the standard, variable APR will kick in.

Enhancing Characteristics

Additional features and capabilities of the Bank of America Customized Cash Rewards Credit Card include:

  • Optional overdraft protection attached to your credit card, subject to overdraft transfer fees and other restrictions Free monthly FICO score (available via the Bank of America mobile app or online banking dash)
  • Free fraud monitoring and a guarantee of no responsibility for fraudulent purchases
  • Alerts can be sent to your phone or email inbox, whichever you prefer.

Significant Fees

There is no yearly charge. There is a 3% fee applied to all foreign transactions. The fee for transferring a balance is greater than 3% or $10.

Credit Required

A high credit score, or better, is needed for this card. The odds of approval drop significantly for borrowers who either have short credit histories or credit ratings below the price range.

Pros

There are many reasons to consider applying for the Bank of America Customized Cash Rewards Credit Card, including the high sign-up bonus, the high continuous cash-back rewards program, and the unusually long 0% APR promotion for new cards.

  1. There is No Yearly Cost. There is no annual fee for the Bank of America Cash Rewards Credit Card – your way. It’s a great card for everyday purchases, but it won’t break the bank if you don’t use it regularly.
  2. Fantastic New Member Offer. Bank of America Customized Cash Rewards offers the best welcome bonus among the company’s no-annual-fee credit cards. That said, BofA has the right to alter this policy at any time.
  3. The Promotional Period of No Interest Charges on Purchases and Balance Transfers Is Extremely Prolonged. The promotional period of 0% APR on purchases and balance transfers is unusually long for a card with no annual fee rewards; 15 months. That’s plenty of time to pay off a large purchase made on starting the account or to reduce a high-interest credit card balance.
  4. Bonuses Broken Down Into a Variety of Broad 3% Categories. Customers of the Bank of America Customized Cash Rewards Credit Card can pick a 3% bonus category from a list of six options. Gas, online shopping, and eating out are pillars of most people’s monthly budgets, so it’s not hard for them to pick a 3% area that suits their demands. And each month, Bank of America cardholders can adjust their settings to better suit their evolving spending habits.

Grocery store and warehouse club members can save money permanently thanks to new bonus categories offering a percentage discount. Budgetary cornerstones also include the permanent 2% bonus categories in Bank of America Customized Cash. Not a member of a wholesale club? No worries; the supermarket section is always a safe bet.

Cons

There are some flaws with the Bank of America Cash Rewards Credit Card that you can choose to ignore. It has a foreign transaction fee and reward caps that may be an issue for high-spending cards.

  1. The 3% Bonus Category Is Selected Random. Cardholders of the Bank of America Customized Cash Rewards Credit Card must actively choose a preferred 3% bonus category. If you don’t specify a different category, gas will be used as the default, which may not be ideal for cardholders who don’t drive frequently, don’t frequently visit gas stations, or don’t own automobiles.
  2. Earnings Bonuses in the Form of Cash Back Limit of $2,500 every quarter. For the quarter, you can earn a maximum of $2,500 in bonus cash back across all 2% and 3% bonus categories with Bank of America. Your quarterly maximum bonus cash-back earnings are $75, assuming you spend the maximum amount in your 3% bonus category.
  3. Contains a Charge for Transactions Made in a Foreign Currency. Using this card to make transactions with international merchants, even those bought online will cost you an additional 3% in foreign transaction fees. Given the prevalence of cards that waive fees for purchases made abroad, this could be a major downside if you frequently shop at establishments outside the United States.
  4. The Standard Cash-Back Rate is Low. After you’ve reached the quarterly spending cap on the 2% and 3% bonus categories and on all other eligible spendings, your Bank of America Customized Cash Rewards earnings will decrease to 1%. Compared to cards like the Citi Double Cash Card and the Capital One Quicksilver Cash Rewards Credit Card, that is a significant discount.

Bottom Line

The Bank of America Customized Cash Rewards Credit Card has many attractive features, including a significant welcome bonus, a rewarding ongoing rewards program, a competitive introductory 0% APR period, and potentially useful benefits for those who bank with Bank of America.

Does it have all the bells and whistles? No credit card that offers cash back is. Bank of America Customized Cash features a low base rewards rate, a foreign transaction fee, and a quarterly bonus cash-back cap. 

It’s not a good choice for people who spend a lot or take a lot of trips, and it’s not flexible enough for people who can’t afford the bonus cash-back categories. It’s still a step up from standard cash-back cards. That’s why it’s a good option to think about, even if you end up choosing a different card or issuer.

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