Bank of America cards: awesome if you’ve got $100K lying around

Bank of America issues a number of cards with co-brands such as Alaska, Air France, Amtrak, Asiana, etc.  Clearly they started at the beginning of the alphabet when looking for partners (Spirit and Virgin Atlantic notwithstanding).  But this post is not about those cards. This post is about Bank of America’s own rewards cards: Cash Rewards, Travel Rewards, and Premium Rewards.

None of Bank of America’s own cards would be interesting except for one key thing: Bank of America has an elite program for their banking customers.  The higher your tier, the more rewards these cards earn.  As a result, at the top “Platinum Honors” tier, these cards become very interesting.

Bank of America’s line-up

Here’s the basic info about each card for those without Bank of America elite status. As you’ll see, none are particularly interesting on their own.  In each case, you can do much better with other cards on the market.

Cash Rewards Cards

Bank of America offers both a consumer and business version of the Cash Rewards card, each with no annual fee. Each offers a fixed 2% category and your choice of a 3% category, and 1% elsewhere.  The consumer card limits 2% and 3% rewards to $2500 combined spend per quarter.  The business card limits 2% and 3% rewards to $50K combined spend per calendar year.

Travel Rewards Cards

Bank of America offers both a consumer and business version of the Travel Rewards card, each with no annual fee. Each offers 3X points for travel booked through their portal and 1.5X points everywhere else. Points can be used like Capital One Miles to erase travel purchases at a value of 1 cent per point.  Alternatively, you can move points to the Premium Rewards card in order to straight-up cash out those points for a penny each.

Premium Rewards Card

Bank of America offers only a consumer version of the Premium Rewards card.  This card has a $95 annual fee, but also includes $100 annual airline incidentals fee reimbursement.  This card offers 2X for travel & dining purchases, and 1.5X everywhere else.  Points can be redeemed for cash back at 1 cent per point.

Bank of America’s elite program

Bank of America offers separate banking relationship elite programs for consumer and business customers.  Both require $100K in deposits to earn top tier Platinum Preferred status.

Preferred Rewards

Here’s a selection of just a few of the perks of the Preferred Rewards program.  The important thing to remember is that you need $100K in combined balances to get a 75% rewards bonus on your Bank of America consumer credit cards.

Shortcut to consumer Platinum Honors status

If you have a retirement account that is managed by a different institution, you can move control of the funds to Merrill Edge.  In many cases you can even earn a cash reward when doing so!  Merrill’s usual bonus is $250 for $100K invested or $600 for $200K invested.  Sometimes they run promotions that are even better.  You can find more information here.

Preferred Rewards for Business

Bank of America offers a separate, but nearly identical, elite program for businesses.

Here’s a selection of just a few of the perks of the Preferred Rewards for Business program.  The important thing to remember is that you need $100K in combined business balances to get a 75% rewards bonus on your Bank of America business credit cards.

Shortcut to business Platinum Honors status

Unfortunately, I don’t know of any tricks to make this easy.  For those with small businesses the easiest option is to open a business checking or savings account with Bank of America and add $100K in funds in order to reach top status.  The good news is that once you reach that status level, you can withdraw funds and your status won’t drop for 12 months.  It’s also possible to open a Merrill Edge small business account and fund that with $100,000.  The advantage to that approach is that you can then invest the money so that it will earn a good rate of return.

If you open a Bank of America business checking account, search for promotions first.  One that recently expired (but the landing page is still live at the time of this writing) is for up to $500.

If you open a Merrill Edge small business account, make sure to speak with a Merrill advisor and ask them about promotions.  You should be able to get at least $250 for adding $100K or at least $600 for $200K.

Consumer & Business programs are separate

You need to earn Platinum Honors status in the consumer program in order to get a 75% bonus on eligible consumer cards.  And you need to get to Platinum Honors status on the business side in order to get a 75% bonus on eligible business cards.

The Platinum Honors credit card line-up

This is where things get interesting.  Here’s the info about each card for those with Platinum Honors status. 

Cash Rewards Cards with Platinum Honors

Now we’re talking!  Each card’s 2% category is now worth 3.5%, and the 3% category now earns 5.25% cash back!  If it wasn’t for the category bonus caps ($2500 per quarter with the consumer card, $50K per year with the business card), this combination would be unbeatable.

Travel Rewards Cards with Platinum Honors

Once you sprinkle in the 75% bonus to these cards, they offer an amazing return on all spend: 2.62%.  No other card offers that much value uncapped.  It’s especially amazing when you consider that these cards have no annual fee. The only downside is that points must be redeemed against travel purchases to get full value.

Premium Rewards Card with Platinum Honors

I think this one hits the sweet spot.  Yes it has a $95 annual fee, but its annual $100 airline incidentals fee reimbursement makes up for it.  Plus, with Platinum Honors status, this card offers 3.5% for travel and dining and 2.62% everywhere else.  And, unlike the Travel Rewards cards, Premium Rewards points can be redeemed for cash back at full value.  The only thing missing here is the ability to transfer points to airline miles. If they ever add that feature (like I predicted they would), this card and Platinum Honors combination would be unbeatable.  For those who prefer cash back, it’s already the card to beat.

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