Alternate Bank Program Showdown Part 3: Bank of America vs USBank vs CapitalOne vs Barclays



Our third installment in this series covers Bank of America (BoA), which is actually ranked second in size among all US banking institutions, just trailing Chase. Despite this and having multiple cobranded airline and cruise products, BoA is relatively new to the convertible credit card miles business and has surprisingly few qualifying products. This is offset by the fact that, similar to Citi, BoA is one of the few institutions that rewards you for having a banking or investment relationship with them by offering a significant and enticing boost to potential earnings.

 
 
 
 

If you already have a qualifying BOA account or are interested in their large brick-and-mortar banking footprint, this post is for you! As before, please keep in mind that I am covering each of these bank programs as unified systems, but the reality is that most of these rewards are tied to a particular card and cannot be pooled or transferred between accounts save for a few exceptions, which I will indicate when appropriate.

BoA Cards that Earn Rewards
Earning BoA Rewards with Credit Cards
Earning BoA Rewards with Banking
Spending BoA Rewards
Rewards Expiration
BoA Rewards Program Summary

 
 
 
 

BoA Cards that Earn Rewards
The following is a list of the cards, which earn BoA rewards:
Bank of America Travel Rewards
Bank of America Premium Rewards

That’s right, there are just two cards! The Travel Rewards (TR) card is an introductory, no annual fee product, while the Premium Rewards (PR) product is somewhere between a mid-range and premium card. The latter carries a 95$ annual fee but, unlike the Citi ThankYou Premier or Chase Sapphire Preferred, comes with a 100$ travel credit good toward airline incidentals, and Global Entry/TSA Precheck. Both cards earn rewards, simply called ‘points’ that can be used for travel redemptions. For reference, this card is probably most similar to the AMEX Premier Rewards Gold card, in that that card also offers a limited travel credit, but it really does not have a direct competitor. As usual, the details for the cards are illustrated in the spreadsheet below:

Bank of America Annual Fee

Both of the cards, including the free TR product, do not carry any foreign transaction fees, which is a nice bonus for frequent international travelers. Typically, most cards without an annual fee incur this, so BoA is generous in this regard. Contrary to the preferential rate that can be obtained for the Citi Prestige with a banking relationship, I’m not aware of any annual fee reduction that is available from BoA for the PR.

As mentioned, the PR card comes with a 100$ annual travel credit and, provided you are able to fully maximize this, BoA is actually paying you for carrying this card! Note, however, that this credit is restricted only to incidental purchases such as “seat upgrades, baggage fees, in-flight services, and airline lounge fees,” and is automatically applied to your statement. Fortunately, you don’t have to select a single qualifying airline, such is the case with AMEX, making this a good deal more useful. Since you already come out ahead just by using all of the travel credit and the Global Entry/TSA Precheck benefit, it is easy to see how the right spending strategy can net you a large return with minimal risk. Thus, I think the Premium Rewards card is definitely a worthwhile consideration for the right person and can be one of the most valuable cards in your wallet, especially if you stick exclusively to Bank of America.

 
 
 
 

Earning BoA Rewards with Credit Cards
Although BoA’s cards have different names, the generic ‘points’ that they earn are basically similar. The ability to earn points is summarized below:

Bank of America Earning

As you can see, since there are only two cards, the potential earning categories are relatively narrow. The TR card is comparable to Chase’s Freedom Unlimited and Ink Business Unlimited cards in that you earn 1.5 points for every dollar of spend, except for travel purchased directly from the BoA Travel Center, which doubles that. However, unlike Chase, BoA multiples your earnings a further 10% if you have a qualifying checking or savings account, yielding a final return of 1.65 points for general spend and 3.3 points for Travel Center transactions! And as the more premium card, it’s not surprising to see the PR card tilted towards travel and dining, with all other purchases matching the TR’s 1.5x return. Interestingly, BoA basically includes an entertainment category for its’ upper tier offering, much like Citi, as many tourist attractions are eligible for the 2x rate, as defined below:

“Travel includes: airlines, hotels, motels, timeshares, trailer parks, motor home and recreational vehicle rentals, campgrounds, car rental agencies, truck and trailer rental, cruise lines, travel agencies, tour operators and real estate agents, operators of passenger trains, buses, taxis, limousines, ferries, boat rentals, parking lots and garages, tolls and bridge fees, tourist attractions and exhibits like art galleries, amusement parks, carnivals, circuses, aquariums, zoos and the like. Purchases from some merchants that provide travel-related goods and services will not be eligible, like in-flight goods and services, and duty-free airport purchases.”

Dining is similarly defined as:
“Dining includes Restaurants, including Fast Food, and Drinking Establishments, such as Bars or Taverns.”

BoA also includes language that states that the amount of earned points are ultimately decided by the merchant category code. In an additional twist, they also specifically call out that only 1.5x points are awarded for purchases:

“processed through a third-party payment account, mobile/wireless card reader, digital wallet not supported by Bank of America or similar technology where the technology does not support transmission of MCCs.”

If you see than a transaction did not award you expected points, even though they were not part of any published exclusions and should have been awarded, you can give their call center and ask that they address the shortfall. Note, however, that given the above specific statement, BoA may refuse your request. My advice, especially for big purchases that you expect will earn extra points, is to make a small transaction with the same merchant to make sure that the points post correctly or use a different seller that you know has gone through without a hitch in the past. This will save you a lot of calls and potential headaches down the line.

As a welcome additional perk, like many other issues, BoA offers the ability to earn extra points on top of defined category spend by using their portal, which often include in-person purchases as well as online shopping. Note, however, that they are more likely to offer cash back (such as 5-10% back at select merchants) than points.

 
 
 
 

Earning BoA Rewards with Banking Products
As mentioned above, BoA goes a step beyond and rewards you for having a banking or investment relationship with them. Note that this is reflected in additional bonus points being awarded for credit card earning and not just for having the account(s), as with Citi. The amount of points you receive and the fine print depends on your card, as follows:

Travel Rewards cards will earn a 10% bonus on all earnings for credit card spend if:
“Either the primary or co-applicant has an active consumer (non-business) checking, savings or individual retirement account with Bank of America, or is a client of Merrill Edge®, Merrill Lynch, Pierce, Fenner & Smith Incorporated or U.S. Trust (excluding 401(k) or other employer sponsored plans and 529 plans). To earn the Customer Points Bonus, your qualifying account must be open and maintain a balance at all times or have had a deposit in the previous 90 days. It may take up to 45 days to begin earning the Customer Points Bonus on purchases when you open a qualifying account. Account-opening bonuses are excluded from the Customer Points Bonus. “

Both Travel Rewards and Premium Rewards cards can earn a bonus between 25-75% on all earnings for credit card spend if the following requirement are met through the bank’s Preferred Rewards program:

Bank of America Preferred Rewards Summary

Bank of America might want to change some of the names for their cards and banking program as they sounds very similar and a tad generic! Note that the 10% bonus for having a regular account is NOT available for the PR. While the qualifying amounts are certainly large, the Platinum Honors level really makes the PR card very competitive even with other banks’ premium offerings, and places it among all the available top earners, as shown here:

Bank of America Preferred Rewards Platinum Honors

Even at the Platinum level, this card makes a tempting proposition for an excellent all-around card, especially if it’s the only one in your wallet!

Bank of America Preferred Rewards Platinum

While the Gold level bonus is nice, I would generally prefer many other cards that offer a solid 2% return over these numbers, especially given the balance requirements!

Bank of America Preferred Rewards Gold

 
 
 
 

Spending BoA Rewards
Now, onto the fun part! By now you’ve hopefully amassed a ton of points from maximizing strategic credit card spend and getting in on a record high sign-up bonus, and are eager to redeem all that hand work for a first class ticket. Not so fast – there are some additional quirks to note. Let’s begin with another spreadsheet, delineating what each BoA Reward Point is worth:

Bank of America Rewards Spend
 

As the more premium offering, the PR has a leg up on the TR, but only so far as non-travel redemptions are concerned. Travel redemption for both cards earn the maximum rate of 1 cents per point. Actually, if you account for the fact that the airfare booked with either is treated much like any other ticket that you purchase and earns both award miles and award dollars from the carrier, you get more than 1 cents in value. Your ultimate value will vary slightly based on how many extra miles you earn but it’s only fair to account for them when figuring out the true net redemption value that you receive. However, it is also possible to inadvertently book basic economy fares, especially with the Travel Center, which may negate any of the above additional mile-earning benefits, depending on the carrier (looking at you, United!), and may come with nasty surprises such as inability to select a seat without paying extra. My advice for this is to always double check the fare code of the ticket you purchased with points and reference these with the fare codes for your carrier; if you risk getting stuck in basic economy, you have 24 hours to change or cancel your purchase.

Note that the PR card allows you to book travel through the Travel Center directly and make any purchase, as long as you have a minimum of 2,500 points to redeem. The TR card works akin to the Arrival card family from Barclays, by applying a statement credit to a travel category purchase, made in the last 12 months, arguably making this card more flexible. This is the same category that BoA uses for earnings and includes many options such as parking, tolls, and museums, as described above. Unlike many of its’ competitors, neither card has any travel partners.

Beyond travel, BoA lets you use points for gift cards, statement credits, and different deposits at varying values based on your card. While adding some flexibility, it does not offer quite as many opportunities to redeem your points as Citi. There are no merchandise purchases, but this is not necessarily a negative given that this option rarely, if ever, yields the highest redemption value.

To finish this section, I will add that BoA is fortunately not as stingy as Citi and has not been known to send 1099-MISC forms, characterizing redeemed points as income. That being said, I would still be conservative and avoid excessive redemptions per calendar year as this may change at any time and there is nothing that prohibits them from doing so.

 
 
 
 

Rewards Expiration
Matching most other issuers, BoA points do not expire as long as your account is current. Note, however, that closing an account immediately forfeits all your points – there is NO grace period.

 
 
 
 

BoA Rewards Point Program Summary
Whew, you made it to the end and now know as much as I do about all the intricacies of Bank of America’s Rewards! I hope this was instructive and serves as a helpful reference guide for you now and in the future. Despite some of this program’s quirks, I think it has a lot to offer someone interested in travel, especially if you already have or are thinking of establishing a banking relationship. Based on everything I’ve covered, I can summarize the advantages and disadvantages of the program in the following:

MileNavigator Happy Face

  • Generous general spend earning of 1.5 point per dollar spent on all cards
  • Very generous travel category definition actually includes many entertainment purchases
  • Low annual fee, coupled with Global Entry/TSA PreCheck and travel credits, create a quick positive return for the PR card
  • No foreign transaction fees
  • Flat 1 cent per point redemption when used for travel
  • Earned points never expire
  • Purchased airfare qualifies for elite status and additional loyalty earning, increasing the final value of redeemed points
  • Banking relationship preferred rewards allow a significant increase in earnings, with the Platinum
  • Honors level making the Premium Rewards card a top contender for earning
  • No 1099-MISC form for redemptions

MileNavigator Neutral Face

  • Points expire immediately upon closing card account
  • ‘Base’ and Gold level earnings with the Premium Rewards card are subpar compared to competitors

MileNavigator Sad Face

  • Choice of only two cards with relatively few bonus categories to choose from to maximize spending rewards
  • Lack of transfer partners

 

Please keep in mind that I did not have time to include any of the additional benefits of having cards with BoA nor many ancillary benefits in this review. This will follow in the future and is just as important as their Preferred Rewards program in determining whether they are a good fit for you!

 
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