Even though none of my business accounts are at Bank of America, for some reason when I logged out of my personal account I was shown the following promotion:
This is the latest Bank of America business card with cash rewards. So is it worth getting?
Here’s a lowdown on the advantages and disadvantages:
It has no annual fee and obviously it’s a MasterCard. This is important to point out, because all of BofA’s small business cards that are Visa use WorldPoints (rather than straight cash back). The WorldPoints are not a good idea so this Business MasterCard is definitely the best out of the bunch.
The fine print on the cash rewards?
The ad above tells us the basics, but what’s hidden in the fine print? I reviewed everything carefully and here’s what I uncovered:
3% at gas stations and office supply stores
As is the case with all small business credit cards, the “office supplies” category consists of retailers which are solely office supplies (Staples, Office Depot, etc.). If you go to a store like Walmart and buy computer paper, it’s not going to count for the 3% cash back.
However if you look what it says after the highlighted text, it’s a bit worrisome and vague. They say it does not include stores that sell “large or high-priced” office equipment and then list computers and desk units as an example.
So does that mean if I use my Bank of America business credit card to buy a computer and desk unit at Staples, it won’t count for the 3% cash back?
I would assume it would still count, but can’t say for sure because of the vagueness in how they worded that.
When it comes to the 3% cash back at gas stations the rules are much more clear-cut. There are no surprises. “Gas stations that primarily sell fuel for consumer use” should count, regardless of whether you pay at the pump or inside.
2% at restaurants
Bank of America’s definition of “restaurants” is a bit narrower than what I’m used to seeing:
As you see they specifically exclude coffee shops (most other reward credit cards count them).
1% on other purchases
I didn’t see any surprises for this. On all standard purchases (so excluding cash advances and balance transfers) you will get 1% cash back.
Redemption and caps?
Seems to be fair – once $50 is accumulated it can be redeemed in increments of $25 via direct deposit or a check.
As far as caps on earning cash rewards, at this time there aren’t any.
The interest rates?
Obviously these things change frequently but the APR range on the credit card application was 11.24% to 21.24%.
The promotional interest rate offer was a bit weak – 0% for 9 months on purchases and no incentive for balance transfers.
Unfortunately Bank of America does not specify if their business credit card is Platinum, World, or World Elite (which are the tiers of MasterCard). But based on the benefits, my guess is that it’s either the standard or World MasterCard.
Pictured at right are the standard benefits that MasterCard offers on business cards (taken from MasterCard’s website, not Bank of America’s).
It’s important to point out that the “Roadside Service” benefit does not actually cover the cost of roadside assistance. All they will do is arrange it for you (and you have to pay for it). A lot of people get confused by this so thought I should explain that.
So what are the requirements for a BofA small business credit card? Well, I have some bad news for you…
You will need to apply using your personal credit as a guarantee.
It doesn’t matter whether you are a sole proprietor or have a LLC/corporation with a separate tax ID number, you still will need to apply for the card using your Social Security number. That’s the requirement.
Why? Because in order to apply only under your company’s federal EIN alone, you typically are required to have several million in annual revenue (such as $5 million) and 2+ years of solid (and verifiable) revenue history for your company.
But not to beat up on Bank of America about this, because ever since the Great Recession a few years ago, all business cards require a personal guarantee.
BofA vs. the 2013 competition?
It’s no coincidence that Bank of America hardly advertises business credit cards – it’s not their strong point, nor do they appear to put a great deal of effort into them.
That being said, the Business MasterCard with Cash Rewards appears to be a good offer. I don’t have any personal experience with it though, as here are the ones I have personally used for my companies:
Chase Ink Cash – 5% cash back on eligible categories and no annual fee. I personally use this card for my company. Unlike most business cards, this one reports to Dunn & Bradstreet (and therefore is good for building business credit).
AmEx Gold For Business – Excellent benefits, but the $175 annual fee isn’t for everyone. Does not report to D&B so you would get this for the benefits and rewards, not credit building.
Capital One Spark – A few different versions are available.
Written or last updated for 2013