How the Bank of America Customized Cash Rewards card’s category selection works

The information about the Bank of America® Customized Cash Rewards credit card was updated on November 9, 2023.

The Bank of America® Customized Cash Rewards credit card allows you to choose a 3 percent cash back category each month that matches your spending patterns, so you can maximize rewards earnings. Your choice category may be gas and EV charging stations, dining, travel, online shopping (including cable, streaming, internet and phone services), drug stores or home improvement.

Here, we’ll cover the various ways you can earn with the Bank of America Cash Rewards card, as well as how to choose a 3 percent category, what type of purchases the categories cover and how to utilize these categories to earn more rewards.

What is the Bank of America Cash Rewards cash back structure?

With the Bank of America Cash Rewards, you can choose which category to earn 3 percent cash back on. Your options include:

• Gas and EV charging stations
• Online shopping (including cable, streaming, internet and phone services)
• Dining
• Travel
• Drugstores
• Home improvement and furnishings

In addition, you’ll also earn 2 percent cash back at grocery stores and wholesale clubs and 1 percent back on all other purchases.

However, it’s important to note that there’s a $2,500 limit on combined 2 and 3 percent category purchases each quarter. After that, the rewards rate falls to 1 percent. Let’s say you reached this limit on 3 percent category purchases alone. You would wind up earning $75 in cash back per quarter, for a total of $300 in cash back per year. Plus, once you’ve hit the spending cap, you would still earn 1 percent back on all purchases.

The Bank of America Cash Rewards also includes no annual fee and a welcome bonus of $200 online cash back after spending $1,000 within the first 90 days after account opening, as well as other benefits.

Features of the Bank of America Cash Rewards cash back structure

While some parts of the card’s cash back structure are unchangeable, other parts provide cardholders with the freedom to make choices based on their lifestyles.

Can you choose your 3 percent cash back category?

When you first get your Bank of America Cash Rewards cards, your 3 percent category is set to gas and EV charging stations by default. If you don’t want to earn 3 percent cash back in this category, you can choose a different one.

Additionally, you can choose to change your category once per month. So, if you anticipate that you’ll be spending a lot on dining during a particular month and then on travel during another, you can adjust your 3 percent category to accommodate your spending.

Which purchases qualify for cash back?

Whenever you make a purchase with a particular merchant, your purchase is assigned a merchant category code (MCC). The type of MCC that a merchant receives depends on the type of products or services that they offer. Whether or not a purchase you make will qualify for a specific cash back category depends on the MCC, and Bank of America has no control over how a merchant classifies itself.

That said, Bank of America does group similar types of merchants together. This means there is a greater chance that your purchases will qualify for the 3 percent cash back categories and be classified as intended.

For example, the dining category includes purchases made at restaurants, fast-food chains, bars, cocktail lounges, discotheques, nightclubs, taverns and other drinking places. Some merchant examples include Chipotle, Olive Garden, Starbucks and Grubhub.

How to choose your Bank of America Cash Rewards category

Here are the steps to choose or change the 3 percent category for your Bank of America Cash Rewards card:

1. Analyze your spending habits. Before choosing a category, you should first review your spending patterns. For example, if you eat out frequently, you might want to choose the dining category. If you shop online a lot, consider selecting the online shopping category.
2. Log in to your account and select your card. After logging in to your Bank of America account through online banking or the mobile app, select your Bank of America Cash Rewards card.
3. Manage your rewards. Next, select your card’s rewards tab. You should see a list of your 3 percent category choices. Choose “Get Started” to change your category.
4. Choose your category. If this is the first time you’re changing your category, you’ll see that your 3 percent category is set to gas and EV charging stations. If you already know which category you want to earn cash back in, select “Change Category” and choose from the list of options. If you want to learn more about your options before choosing a category, you can select “Category Details.” This will provide you with examples of qualifying merchants and purchases. Once you change your category, your choice will go into effect for all future purchases.

When to change your 3 percent category

If you spend a lot of money at gas or EV charging stations each month, it may make sense for you to stick with the default as your 3 percent category. But, if you spend a lot at online retailers — such as Amazon, Etsy or Target.com — you may find it better to choose online shopping as your 3 percent category. If you don’t change your category, your 3 percent category will remain the same until you deliberately switch it.

This flexible category is most helpful when you have a month or two with a lot of spending in one particular area. For example, if you’re completing a home renovation, you might want to temporarily switch your category to home improvement and furnishings to maximize your earnings. Some of the qualifying merchants for home improvement include Ace Hardware, IKEA, The Home Depot and Lowe’s.

Or, if you’re going on vacation soon, you could change your category to travel during the month you make all your bookings. The travel category is broad and includes purchases made with Airbnb, Uber, Delta Airlines and more.

Plus, as outlined above, it’s quick and easy to change categories online or through the Bank of America app. Just keep in mind that you can only change categories once per calendar month, and you’ll only earn 3 percent cash back on up to $2,500 worth of purchases each quarter. After that, you’ll earn 1 percent back on purchases in your selected category until the next quarter.

How to maximize the Bank of America cash back category rewards

There are a few things you can do to maximize your earnings with the Bank of America Cash Rewards card. These include:

• Choosing the best 3 percent category for your lifestyle. Choose the category that works best for you. It should be a category that you’ll have high spending in during that particular month or quarter.
• Switching 3 percent categories when necessary. If you need to, switch categories for a month. This can come in handy if you have a large expense coming up in a particular category. Once you’ve made that large purchase, be sure to switch your flexible category back to your preferred everyday category so that you still earn 3 percent cash back when you return to your regular spending.
• Qualifying for Preferred Rewards. Bank of America Preferred Rewards members can earn 25 to 75 percent more rewards on their purchases. This means you could earn at least 25 percent more on 3, 2 and 1 percent category purchases. To become a Preferred Rewards member, you must have a qualifying Bank of America or Merrill account and meet minimum balance requirements.
• Pairing your card with a flat-rate cash back option. To earn more rewards on all spending, consider pairing the Bank of America Customized Cash Rewards card with a flat-rate card like the Citi Double Cash® Card or Wells Fargo Active Cash® Card. If you use your Bank of America Customized Cash Rewards card for purchases in your 3 percent category and your flat-rate card for purchases in non-category spending, you can maximize the cash back you’re getting for all purchases. For the Citi Double Cash Card, for example, you’d get 1 percent cash back as you buy and 1 percent as you pay for purchases, which would amount to more than what your Customized Cash Rewards card would offer for non-category spending.

The bottom line

The 3 percent categories on the Bank of America Customized Cash Rewards card are fairly broad, which works to cardholders’ benefit. This way, cardholders can choose the categories they spend the most money in to maximize cash back earnings.

The key is to plan out big purchases ahead of time and choose a 3 percent category according to category seasons, such as choosing the online shopping category for the holiday season or the travel category for a big summer vacation.