On Wednesday the bank launched its BankAmericard Cash Rewards and Cash Rewards for Business MasterCard, both of which feature 1 percent cash back on all purchases, no expiration on rewards and no annual fee.
BankAmericard Cash Rewards cardholders also earn 2 percent cash back on groceries and 3 percent on gas up to $1,500 each quarter. After hitting the limit, cardholders continue to get 1 percent back. As an extra incentive to do more business with the bank, it is offering a 10 percent bonus when cardholders deposit their cash rewards into a Bank of America checking or savings account.
The variable APR rate (the intro rate lasts the first year) is between 12.99 percent and 20.99 percent.
The Cash Rewards for Business MasterCard targets small business owners who can earn 2 percent back when dining out and 3 percent on office supplies, gas and computer network services. There are no caps on reward earnings. The variable APR, which goes into effect after the first nine months, is between 11.24 percent and 21.24 percent.
Bank of America is the second issuer in a week to launch a new cash-back rewards card. Last week, Capital One debuted its Capital One Cash card that features a total of 1.5 percent cash back on all purchases.
Generally, credit card issuers have been offering more bang for your credit card buck as consumers become more cash-oriented.
A 2010 study from Synergistics Research showed that 44 percent of consumers preferred the instant gratification of cash-back rewards. That's up from 25 percent in 2006. The same study revealed that only 16 percent favored longer-term rewards, such as flights or hotel stays, down from a third in 2006.
Before signing up for a cash-back credit card (or any card), make sure it's right for you. Know the annual fee and annual percentage rate before making the plunge. Also, make sure what you can earn cash back on are purchases you normally would make. There's no sense in buying more just to earn more.
What rewards interest you?
Follow me on Twitter: @JannaHerron