New Bank of America Premium Rewards card – what we know

Updated Sept. 1, 2017: Ever since Chase launched its Sapphire Reserve product last year, various issuers have launched products (or tweaked existing products) to compete on the travel-rewards field. In most cases, that’s meant releasing high-annual fee luxury cards to compete head-to-head.

But Bank of America is doing something a little different with its Premium Rewards card (due out in September).

Full details haven’t been released yet, but here’s what we know based on information collected from various sources and forums. Update (Sept. 1, 2017) — Dr. of Credit has screenshots of the card’s terms.

What we know about the fees

The card will have a $95 annual fee, according to the Wall Street Journal. It will also have no foreign transaction fees.

What we know about the rewards

This card will offer a sign-up bonus of 50,000 points after $3,000 in spending in the first three months, the WSJ confirmed.

On purchases made with the card, you’ll earn:

  • 2 points per dollar spent on travel and dining
  • 1.5 points per dollar spent on all other purchases

Rewards will be redeemable for:

  • Cash back in the form of a statement credit or deposit into an eligible Bank of America or Merrill Lynch account
  • Travel (airfare, car rental and hotel bookings) via the Bank of America Travel Center
  • Gift cards

For all redemption options, each point will be worth 1 cent each. So, if you have 50,000 points, you can redeem for a $500 cash-back statement credit, a $500 gift card or $500 worth of travel booked via Bank of America’s travel portal.

This card will also work with the Bank of America Preferred Rewards program. Preferred Rewards makes your rewards worth more if you have an existing banking relationship with Bank of America AND redeem your rewards into an eligible Bank of America checking or savings account. You get the following boosts, depending on your combined balances across your BofA and Merill Lynch accounts:

Bank of America Preferred Rewards: Credit card rewards boost
Preferred rewards tierRewards boost
Gold ($20,000 combined balance)25%
Platinum ($50,000 combined balance)50%
Platinum Honors ($100,000 combined balance)75%

Assuming you’re in the highest tier, you can get 2.625 percent back on all purchases with this new card and up to 3.5 percent on travel and at restaurants.

What we know about the perks

This card will offer a $100 airline-fee credit (which covers incidentals like baggage fees and in-flight food and beverages) on eligible domestic carriers. It will also offer reimbursement for TSA PreCheck or Global Entry every four years.

This card will also be offered at the Visa Signature level, meaning it will likely include the standard Visa Signature suite of benefits (like travel protections and extended warranty).

Should this card be on your radar?

That depends largely on your existing relationship with Bank of America. If you are in the Preferred Rewards program, the ability to get up to 3.5X rewards on dining and travel (and more than 2.6X on regular spending) is compelling. This card is also an upgrade from the no-annual-fee BankAmericard Travel Rewards card, as you can redeem for both travel AND cash back for the same redemption value.

If you’re not in Bank of America’s Preferred Rewards program, you can consider this card a mash-up of other similar cards. It has the annual fee of the Chase Sapphire Preferred with a better rewards return on all purchases (but no transfer program or boosted value when redeeming in the travel portal). It has the $100 airline-fee credit of the Premier Rewards Gold card from American Express (a CreditCardForum advertising partner) for a much lower annual fee.

The biggest factor “missing” from this card is a transfer program. Unlike the Chase Sapphire Preferred and the Starwood Preferred Guest program, you can’t transfer your points out to partner airlines and hotels. This is a lucrative way to use points because you can maximize value by redeeming for a high-cost fare or hotel room available for relatively few points. For example, with the Starwood Preferred Guest Progam, you might be able to transfer to, say, 50,000 points to American and redeem for a business-class seat worth $1,000. With the Bank of America Premium Rewards card, you’re limited to a value of $500, no matter how you redeem.

That said, if you aren’t interested in maximizing and strategizing, the Bank of America Premium Rewards card may be a better fit. And, while your redemption value is capped at 1 cent per point, you’re earning 1.5 percent back on all purchases, which beats the Sapphire Preferred and Starwood’s card. You’ll have to decide, based on your spending, whether you’d rather amass more points that are worth slightly less, or collect fewer points that could be worth more when redeemed strategically for travel.

 
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Are there caps on the higher rewards levels? As a preferred rewards member do you get the bonus on all spend?

No limits, but keep in mind, you get the Preferred Rewards bonus only when you redeem for cash back into a BofA account.