Bank of America Preferred Rewards Program Review

• Non-rewards credit cards
• Business purpose credit cards
• BankAmericard Privileges^® (except Cash Rewards customers in the Platinum Honors tier)
• Bank of America Accolades^®
• BankAmericard^® Better Balance Rewards™
• Merrill Lynch branded (including Merrill Accolades^®, MERRILL+^®, Total Merrill^® Cash Back, Total Merrill Match^® and Merrill Lynch^®Octave™)
• U.S. Trust branded (including Bank of America Accolades and U.S. Trust^® Octave™)
• AAA Dollars^® Visa credit card
• AAA^® Gas Rebate
• Alaska Airlines^®
• Amway™
• Asiana Airlines^®
• Azamara Club Cruises^®
• Bass Pro Shops^®
• Celebrity Cruises^®
• Elite Rewards^®
• Melaleuca^SM
• Royal Caribbean International^®
• Spirit Airlines^®
• US Airways^®
• Virgin Atlantic Airways^®

Qualifying For Status

Now before going through each cards benefits within the confines of the Preferred Rewards Program, it’s necessary to list the rewards on other products beforehand because they could possibly be the better option for you. *hint*

• Bank of America deposit account. I’m going to be blunt, Bank of America’s deposit accounts + Preferred Rewards is possibly one of the worst options listed. Your interest rate should usually be 0.03% APY, however, with Platinum Preferred Status, you’ll be able to get 0.10% APY. 1% or more on an online savings and checking combo could earn you $1,000 a year in interest. Ideally then, to earn an extra $270 in cash back a year, you’re basically sacrificing $900 a year comparative to the 1% account.
• Merrill EDGE self-directed investment account.  The easiest way to get that $100,000 in deposit value would be via an IRA or rollover IRA from a 401K plan account with Merrill Edge.
  1. Free online trades.
     • up to 30 per month with Platinum
     • up to 100 per month with Platinum honors
  2. Cash bonuses derived from adding a qualifying deposit of assets
     • $100 bonus: $20,000 in assets
     • $150 bonus: $50,000 in assets
     • $250 bonus: $100,000 in assets
     • $600 bonus: $200,000+ in assets
  3. Ability to purchase Vanguard ETFs

Keep in mind that the only way Preferred Rewards would make sense in terms of the Merrill Investment with higher balances is to have your IRA or brokerage account WITH Merrill Lynch. Balances do count towards the minimum for Preferred Rewards. Also, if you use a Merrill Edge account, you’ll get free trades every month (listed benefit above) and be able to keep your money in low cost index funds instituting equitable returns on top of no excessive fees.

BankAmericard Cash Rewards

The cash rewards excels in gas and grocery spending with a prosperous 3X on Gas and 2X on Groceries and Wholesale Clubs. This makes it all the more necessary to evaluate the most optimal cash back with each status.

Gas:

• Gold: 3.75% cash back on gas station purchases
• Platinum: 4.5% cash back on gas station purchases
• Platinum Honors: 5.25% back on gas station purchases

Grocery stores & Wholesale Clubs:

• Gold: 2.5% cash back on grocery store purchases
• Platinum: 3% cash back on grocery store purchases
• Platinum Honors: 3.5% back on grocery store purchases

Of course, if you had an exhaustible $100,000 to keep with Bank of America or ME, the cash rewards card certainly cannot be revamped enough to compete with specialized gas cards such as the Fort Know Credit Union VISA Platinum or the PenFed Platinum Rewards VISA and 3.5% back on groceries with Platinum Honors is better than decent, but putting the card side-by-side with the Old Cash Blue, an impressive 5% cash back on groceries is the better candidate and you won’t have to let Bank of America hold your $100,000 either. Keep in mind that your cash back will not be capped!

BankAmericard Travel Reward

Ultimately, this card will earn you 1.5x the points on all purchases with a 1¢ a piece when redeeming them against travel expenses. However, you will only be able to get 0.6¢ out of your redemption if redeemed for cash. 1.5% isn’t very interesting to say the least, but let’s see what the Preferred Rewards Program can do to revamp this card!

• Gold: 1.875x points on all purchases
• Platinum: 2.25x points on all purchases
• Platinum Honors: 2.625x points on all purchases

The Preferred Rewards Program seemingly only works in favor for the Platinum Honors with 2.625x the points on all purchases. Of course, there are cards out there with the ability to get 3% cash back everywhere (The JCB Cards), however, the card’s availability is a hassle. Now 2.625% cash back does have one big red flag, and that’s if you redeem your points for cash, you’ll only be receiving a maximum of 1.575% Cash back versus the 2.625x applicable towards Travel Expense Redemptions.

AAA Member Rewards

With the AAA Member Rewards Card, you will be able to take advantage of 3 points per $1 in spend on qualifying AAA & travel purchases, 2 points per $1 on gas, grocery & drug store purchases and 1 point on all other purchases with points worthy at 1 cent a piece. However, within the confines the of BoA Preferred Rewards Program, the bonus will only be attached to the 1 base points instead of the category bonus.

AAA Purchases

• Gold: 3.25x points on AAA purchases
• Platinum: 3.5x points on AAA purchases
• Platinum Honors: 3.75x points on AAA purchases

Travel purchases

Below is the merchant category code along with what Bank of America codes as travel:

• Airlines: (MCC 3000-3299-representing individual major airline carriers, and 4511- Airlines/Air Carriers)
• Hotels, Motels, Inns and Resorts: (MCC 3501-3999-representing individual major hotel/motel chains and 7011-Hotels/Motels/Resorts)
• Steamship/Cruise Lines: (MCC 4411)
• Car Rental Agencies: (MCC 3351- 3441-representing individual major agencies; and 7512- Automobile Rental Agency)
• Travel Agencies: (MCC 4722)

Gas, Grocery & Drug Store (GGD) Purchases

• Gold: 2.25x points on GGD purchases
• Platinum: 2.5x points on GGD purchases
• Platinum Honors: 2.75x points on GGD purchases

In retrospect, this card could optimize your travel purchases IF you have Platinum Honor Status and you’re willing to let Bank of America hold $100,000 in deposit value.

Reiterating that there are plenty of other cards out there that gives you the same, if not a little more benefits such as 5% cash back on gas, or 3.5% cash back on groceries, however, 1.) Most, if not, all cards that offer such a bountiful cash back is capped at a certain spend ( Old Blue Cash Card with a $2,500 cap) and 2.) This card can be quite useful with travel redemption topping up to 5.25% Cash Back.

One of the more attractive things is that AAA sells VISA gift cards with casual promotions for no purchase fees attached. Not only that but purchasing Gift Cards codes as 3X the points, however, prospects of expansion is thin ice.

Keep in mind that AAA may limit you with Gift Card purchases and if you purchase too many GC, MetaBank has the authority to ban you. Now, clearly the Preferred Rewards Program does what it’s meant to do: Revamp decent cards and making them all the more useful. Now, 2.625% Cash Back on the Travel Card alone a really attractive offer. Keep in mind that in order to maximize the program + the Travel Rewards and AAA, it’s best for those able to put a big spending.