Recent developments in the credit card industry point towards a new rewards credit card offer coming in September from Bank of America (BoA). Depending on the consumer, this new credit card could offer the best set of rewards in the industry; however, it could just be another typical addition to a competitive industry according to Bankrate.
The Bank of America Premium Rewards Credit Card marks the bank’s most recent attempt at offering a premium card with enticing rewards; however, the card’s baseline perks won’t sound exemplary to a veteran credit card holder.
Like many other typical rewards credit cards, the new BoA Premium card offers an introductory bonus and rewards rate of return for spending. For spending $3,000 within the first three months of getting the card, a card holder will receive $500 in cash back value amounting to roughly 17 percent cash back. For travel and dining purchases, the card offers two points per dollar spent. Everyday spending with the card garners a 1.5 percent return, so every dollar spent earns either two cents or a cent and a half in cash back return.
Aside from these headliner rewards, Bank of America’s Premium offer would also give its holders an annual $100 credit for baggage fees and in-flight purchases with an airline. Additionally, it offers a $100 reimbursement for applying to Global Entry or TSA Pre-Check, renewable every four years.
Weighing against these rewards, the card also comes with a $95 annual fee as well as other fees and APR associated with a credit card. These details are still pending, but they will most likely align with typical Bank of America credit card offers.
As mentioned earlier, these rewards do not stick out considerably from the pack; in fact, they more or less fall right in with the pack. This may seem confusing, but a deeper dive into the details reveals the reasons behind this: the Preferred Rewards Program.
For those who have savings and checking accounts with Bank of America, the Preferred Rewards Program opens up a tiered rewards system providing additional incentives and rewards to premium card holders. Here are a few more details:
With a 3-month average deposit balance of $20,000 to $50,000 in their savings and checking, card holders earn 2.5 and 1.9 percent on special and everyday purchases compared to the standard 2 and 1.5 percent, respectively.
When that average is between $50,000 and $100,000, the rates jump to 3 and 2.25 percent, respectively. With average, 3-month balances exceeding $100,000, the rates are as high as 3.5 and 2.65 percent, respectively. Compared to the standard rates, these three tiers represent a 25, 50, and 75 percent increase in value of rewards.
Bank of America’s intentions are fairly clear when considering the tiered rewards program. Card holders who have considerable funds with Bank of America stand to gain more with the new Premium Rewards Credit Card. These incentives should theoretically drive participation and business with BoA. Those who sign up for the card can earn more for daily spending by depositing more into the bank.
At any rate, there are plenty of rewards credit cards to choose from. It is entirely possible to get a comparable credit card rewards offer from a different company without being on the hook to bank with BoA. If a consumer does not have money with the bank, they are probably more likely to get a better deal with another company. However, a consumer who has worked with Bank of America for some time could have access to a first-class rewards system and would do well to weight the program against other offers, especially if they already have a Bank of America credit card.
Author: Andrew Rombach
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