Bank of America® Premium Rewards® credit card review
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Bank of America® Premium Rewards® credit card Overview
The Bank of America Premium Rewards Card is, on the surface, a mid-level rewards card that earns modest rewards, comes with a low annual fee, and offers new cardholders an equally moderate sign-up bonus. It’s not exactly groundbreaking, but it does offer enhanced rewards tiers for Bank of America or Merrill account holders in the Preferred Rewards Membership program who meet a minimum required account balance. This feature makes the Premium Rewards card ideal for loyal cardholders who keep their finances under the umbrella of one bank or who don’t want the hassle of juggling several accounts.
However, if your savings account doesn’t align with at least the Platinum tier requirements in Bank of America’s Preferred Rewards program (a $50,000 minimum three-month average balance across accounts), you’ll earn rewards at a relatively low rate when you compare the card to some other higher-earning options at the same price point like the Chase Sapphire Preferred® Card or the flat-rate Capital One Venture Rewards Credit Card. In this case, you might want to consider other options. A better choice might be a 2 percent flat-rate rewards card, such as the Citi® Double Cash Card, or a card that earns substantially higher in your top spending categories.
What are the advantages and disadvantages?
- $95 Annual fee
- Highest Preferred Rewards category rates for members with large savings—rewards rates aren’t very competitive without $50,000 in the bank with the issuer
- 2,500-point minimum redemption requirement for travel or cash back, and a 3,125-point minimum for gift cards
- Although solid, the travel benefits aren’t on par with some other premium cards and the travel credit only covers airline incidentals instead of airfare
A deeper look into the current card offer
- Rewards rate: 2 points per dollar on travel and dining purchases, plus 1.5 points per dollar on all other purchases
- Welcome offer: 50,000 online bonus points after spending $3,000 on purchases in the first 90 days
- Annual fee: $95
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 16.24 percent to 23.24 percent (variable)
Current welcome offer
Bank of America is currently offering new cardholders 50,000 bonus points for spending $3,000 on new purchases in the first 90 days of opening their card account. This bonus is valued at $500, or 1 cent per point—which is decent considering the card’s low annual fee, but a bit less valuable than what competing cards offer.
You’ll need to spend an average of $1,000 per month for the first 90 days to receive the Premium Rewards card bonus. This is a modestly low spending requirement to receive a welcome bonus, which makes for a nice benefit when compared to other cards. However, the Capital One Venture offers 75,000 bonus miles in exchange for a twin $4,000 spending requirement in the first three months.
You might find that another card’s offer is more rewarding for spending just a bit more in a similar timeframe. For instance, both the Citi Premier® Card and the Chase Sapphire Preferred pose $4,000 spending requirements in the first three months and cardholders with those respective cards could receive either 60,000 Citi ThankYou points with the Citi Premier (an $600 value toward travel) or 80,000 Chase Ultimate Rewards points with the Sapphire Preferred (a $1,000 value toward Chase travel, thanks to its 25 percent redemption value boost).
The amount you plan to spend in the opening quarter will determine which bonus is right for you, but remember not to inflate your spending to chase a slightly higher sign-up bonus.
The Bank of America Premium Rewards card earns modest rewards with enhanced rates available for eligible Preferred Rewards members. With up to a 75 percent rewards increase, qualifying cardholders who aim for a Bank of America Preferred Rewards membership can potentially make the Premium Rewards card the highest-earning card in their wallet.
How you earn
The Bank of America Premium Rewards card earns 2 points per dollar on travel and dining and 1.5 points per dollar on all other purchases. Points don’t expire and there is no limit to how many you can earn.
By comparison, rival cards like the Chase Sapphire Preferred and Citi Premier earn slightly more in each of these categories but earn 1 point per dollar on general purchases. This makes the Premium Rewards card a little underwhelming if you’re earning at the card’s non-Preferred Rewards member rate. However, eligible Bank of America or Merrill account holders can qualify (based on their three-month average combined daily account balance) for enhanced rewards rates by 25 percent up to 75 percent on all purchases. This could potentially boost the average rewards rate, giving the Premium Rewards card more rewards potential (based on your spending habits) than the Sapphire Preferred card and others in its class.
Bank of America Preferred Rewards status tiers
Depending on your Preferred Rewards status, the Premium Rewards card offers the following rewards rates:
- Preferred Rewards Gold (at least a $20,000 balance): 25 percent boost for 2.5X points on travel and dining with 1.87X points on all other purchases
- Preferred Rewards Platinum (at least a $50,000 balance): 50 percent boost for 3X points on travel and dining with 2.25X points on all other purchases
- Preferred Rewards Platinum Honors (at least a $100,000 balance): 75 percent boost for 3.5X points on travel and dining with 2.62X points on all other purchases
How to redeem
Cardholders can redeem their Premium Rewards points for travel booked through the Bank of America Travel Center, gift cards or cash back in the form of a statement credit or a deposit into an eligible Bank of America or Merrill account.
Point redemption is straightforward because you can get your rewards as cash back or use them for travel redemption without losing any value—which is more flexible than some cards’ travel rewards—as long as you have the minimum 2,500 points (a $25 value) to redeem. Gift cards have a 3,125-point minimum redemption requirement.
However, because there is no added value or benefit to redeem for travel, the Premium Rewards card is a little disappointing compared to other cards in the travel rewards landscape. For example, the Chase Sapphire Preferred provides a point value boost when redeeming for travel through the issuer’s portal and many competing cards allow the opportunity to transfer your rewards to travel transfer partners for potentially more value—an option the Premium Rewards card doesn’t offer.
The good thing is that your points never expire, so there’s no rush to redeem if travel isn’t the best option for you right now.
How much are the rewards worth?
Points earned with the Bank of America Premium Rewards card have a value of 1 cent per point no matter how you redeem them. This is a little different than some other issuer’s points which have a variable value depending on how you choose to redeem them—which can be a double-edged sword. These travel rewards may be more valuable for infrequent flyers since you can redeem for cash back without penalty, but there’s no incentive to redeem for travel like competing cards may provide.
Other cardholder perks
While the perks available on the Bank of America Premium Rewards card aren’t up to the level of a luxury travel rewards card, they are still decent for a card with a low annual fee. In fact, if utilized, the perks on the Premium Rewards card more than negate the annual fee, making them sufficient for a card in this category and price range if you’re more concerned with the destination than the journey.
Visa Signature Luxury Hotel Collection
Bank of America cardholders receive access to the Visa Signature Luxury Hotel Collection and all its perks (when available), including automatic room upgrades, late checkout, complimentary Wi-Fi and breakfast, VIP Guest status as well as a $25 food and beverage credit.
$100 incidental airline credit
Cardholders receive up to $100 in yearly statement credits for incidental airline expenses to cover eligible costs like baggage fees, seat upgrades, changes to your flight, lounge access or in-flight purchases like food and beverages.
It’s worth noting that, unlike some cards’ annual credits that cover airfare or the actual travel bookings, this card’s airline incidental credits aren’t as direct. This is especially important for occasional flyers that aren’t worried about frills like airport lounges and traveling beyond coach since they may find it harder to maximize these credits for anything other than baggage fees.
$100 credit for Global Entry or TSA PreCheck®
The Premium Rewards card also comes with an up to $100 application fee credit for Global Entry or TSA PreCheck® every four years, amounting to a yearly value of $25.
This feature really comes in handy if the security screening is a major speed bump (or stressor) in your travels.
Rates and fees
The $95 annual fee is standard for a card of this caliber and is the same as that of the rival Chase Sapphire Preferred, Citi Premier, Capital One Venture cards.
The card’s 16.24 percent to 23.24 percent (variable) APR rate is also comparable to competing cards. The Bank of America Premium Rewards card also poses a 3 percent balance transfer fee ($10 minimum), which is a little lower than the 5 percent ($5 minimum) transfer fee that the Chase Sapphire Preferred and Citi Premier carries, putting the Premium Rewards card at a slight advantage. However, the Premium Rewards card doesn’t offer an intro APR period for balance transfers, so we wouldn’t recommend it for balance transfers.
There is also no foreign transaction fee if you plan to earn rewards on purchases abroad.
First-year vs. ongoing value
The minimum amount you’ll need to spend to make the Bank of America Premium Rewards card worth it is about $396 per month, or $4,750 each year in your travel or dining category (excluding Preferred Rewards boosts). This will recoup the card’s annual fee, but keep in mind you can also take advantage of the up to $100 of yearly incidental airline credits and the up to $100 application fee credit for TSA PreCheck® or Global Entry you get every four years. Combined, these two perks can provide up to $125 in yearly value and more than make up for the fee without relying on rewards spending.
If you qualify for enhanced rewards rates with the Preferred Rewards program, you can spend less to offset the annual fee. For instance, the $4,750 you’d spend to offset the annual fee earns you roughly 9,500 points at the base 2X travel and dining rate (a $95 value). With Platinum Preferred Rewards status, an annual spend of $4,750 in your travel and dining categories nets you 14,250 points redeemable for $142.50—almost $50 in rewards per year on the same budget. Obtaining Platinum Honors status will net you even more per year, a bit over $71 more than the base 2X rate earns on that spend.
Keep in mind, at any rewards rate you qualify for, as long as you spend $3,000 on purchases in the first 90 days to earn the card’s welcome bonus, you’ll get 50,000 bonus points redeemable for a $500 value. Depending on how you look at it, that $500 covers the annual fee for roughly five years of owning the card.
Overall, the card’s ongoing value is a little lackluster without the boosted Preferred Rewards rates. You might be better off with another travel card or a no annual fee card like the Bank of America® Travel Rewards credit card if you don’t qualify for an increased rewards rate. However, if you have a large savings account and qualify for Preferred Rewards status, justifying the annual fee will be a breeze by comparison.
|Benefits and Costs||First-year value||Ongoing value (no welcome offers)|
|Welcome offers||+$500 (50,000 bonus points after spending $3,000 during the first 90 days)||—|
|Perks (of monetary value)||
*Based on our formula used to calculate each card’s average rewards rates and average ongoing rewards value, using Bureau of Labor Statistics spending data and an assumed $48,000 yearly spend over three years ($1,325 per month).
How the Bank of America Premium Rewards card compares to other travel cards
We estimate the average rewards potential* for the Premium Rewards card (for a cardholder who doesn’t qualify for higher-earning tiers in the Preferred Rewards program) is below the emerging gold standard 2-point/percent flat rewards rate that’s currently available on other cards like the Capital One Venture. However, the card has the potential to earn higher than 2 percent back on average with the Preferred Rewards program, making it a great option for Bank of America loyalists torn between flat-rate rewards and a card that specializes in their top categories, like travel and dining.
Bank of America Premium Rewards card vs. Chase Sapphire Preferred® Card
The Chase Sapphire Preferred is a travel rewards card perfect for beginners who want a low annual fee and a generous rewards rate without worrying about banking with the issuer. Chase offers new cardholders a 80,000-point welcome bonus valued at $1,000 (if redeemed for Chase travel) for spending $4,000 in the first 90 days, which comes in at a higher value than the offer on the Premium Rewards card.
The Sapphire Preferred earns rewards at a rate of 3 points per dollar on dining, streaming services and online grocery store purchases (excluding Walmart, Target and wholesale clubs). Plus, you’ll get 5 points per dollar on travel through Chase Ultimate Rewards and on Lyft rides (Lyft offer through March 2022), along with 2 points per dollar on other travel and 1 point on all other purchases. However, points earned with the Sapphire Preferred are worth 25 percent more than points earned with the Premium Rewards card when they’re redeemed for travel through the Chase Ultimate Rewards portal.
Although the flat rate on all other purchases is worth essentially a quarter-cent less than the earning rate on the Bank of America Premium Rewards card if you account for Chase’s travel redemption boost, we estimate the Chase Sapphire Preferred card’s average annual rewards potential* is about $434—a significant degree higher than the Premium Rewards card’s average yearly value of $256.
But keep in mind that if you do happen to qualify for the higher-earning tiers in the Preferred Rewards program, your Premium Rewards card will earn you a better average annual rewards value than you’d earn with the Sapphire Preferred on the same budget. For instance, the Platinum Honors tier’s 75 percent enhanced earning rate will balloon your annual average rewards value to about $447. Still, that narrow margin even with the Preferred Rewards program’s steep requirements will likely make the Sapphire Preferred a more valuable travel card for most cardholders, especially when you consider the Sapphire Preferred’s roster of transfer partners, pairing capabilities with other Chase cards and its hard-to-beat benefits.
Bank of America Premium Rewards Card vs. Bank of America® Travel Rewards Card
The Bank of America Travel Rewards card is the Premium Rewards card’s no annual fee sibling that earns 1.5 points per dollar on all purchases and comes with a 0 percent introductory APR for 15 billing cycles for purchases (then 14.24 percent to 24.24 percent variable APR). It also comes with a sign-up bonus of 25,000 points (a $250 value) for spending $1,000 on purchases in the first 90 days. This is a generous sign-up bonus relative to the amount you need to spend—coming in at a 25 percent return.
This is an ideal alternative for new cardholders who don’t use their credit card often and can secure the sign-up bonus without having to stretch their spending habits. It’s also great for travelers because it comes with a flexible travel credit redemption process, essentially offering statement credits that cover travel-related purchases that aren’t typically covered in that category, such as admission to eligible museums, galleries, aquariums and other tourist attractions.
If you don’t think you’ll meet the $3,000 spending requirement in the first 90 days for the sign-up bonus on the Premium Rewards card or achieve Preferred Rewards status and want to avoid a $95 annual fee, the Travel Rewards card is a great option.
Best cards to pair with the Bank of America Premium Rewards card
You’re best off pairing the Bank of America Premium Rewards card with a no annual fee card that rewards your primary spending categories. A great option—especially if you’re a Preferred Rewards member—is the Bank of America® Customized Cash Rewards credit card. This card gives you the flexibility to choose one of six categories each month to earn 3 percent cash back within. Your choice categories include gas, online shopping, dining, travel, drugstores and home improvement/furnishing purchases—only two of which are covered by the Premium Rewards card.
Plus, you’ll also earn a fixed 2 percent cash back at grocery stores and wholesale clubs, up to $2,500 per quarter in combined purchases across your 2 percent and 3 percent categories (then 1 percent back). The Customized Cash card’s versatile bonus categories will allow you to earn a higher rate on everyday categories while all other purchases, and those outside your Customized Cash card’s spending cap, earn 1.5 points per dollar thanks to the Premium Rewards card.
Bankrate’s Take: Is the Bank of America Premium Rewards credit card worth it?
If you have the savings with Bank of America to qualify for a higher rewards rate in the Preferred Rewards program offered by Bank of America, the Premium Rewards card is absolutely worth it. You’ll earn 2 points per dollar on travel and dining, but more importantly, a boosted 1.5-point rate on all other purchases. The Premium Rewards card can potentially earn one of the highest rates on general purchases for cardholders who qualify for at least the Platinum Honors tier of the Preferred Rewards program (a three-month average balance of $100,000 with Bank of America).
If you aren’t interested in e Preferred Rewards status or can’t qualify for at least the Platinum tier (a $50,000 average balance), you may want to consider going with a no annual fee card or the Chase Sapphire Preferred. The Sapphire Preferred has the same annual fee but comes with a better rewards structure for the average cardholder, a better welcome bonus and extraordinary perks, making it a more rewarding offer all around.