Even With No Annual Fee, Is the Bank of America Cash Rewards Card Worth It?

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INSIDER SECRET: With no annual fee, the Bank of America® Cash Rewards credit card is a great cash back card. However, if you’re a big spender or frequent traveler, you might want to consider other cash back cards before applying, as it will count against Chase’s 5/24 rule.

The Bank of America Cash Rewards credit card is a solid cash back credit card — if you aren’t a big spender. And it comes with a decent welcome offer. You’ll earn $200 cash bonus after meeting the minimum spending requirements.

Plus, the Bank of America Cash Rewards card has no annual fee. So, with a $200 sign-up bonus, no annual fee and solid earning rates, you’d probably think the Cash Rewards card is a no-brainer.

But is the Bank of America Cash Rewards card worth it? For the average spender, absolutely. But, if you’re a big spender or want something with a few more benefits, you might want to consider other cashback cards.

I’ll share why, for most card holders, the Cash Rewards credit card is a good choice, and recommend other cash back credit cards to consider if the Cash Rewards card isn’t what you’re looking for.

Is the No Annual Fee Bank of America Cash Rewards Card Worth It?

Apply here: Bank of America® Cash Rewards credit card

Read our review of the Bank of America Cash Rewards credit card

When you open the Bank of America Cash Rewards card, you’ll earn $200 cash bonus after spending $1,000 on purchases in the first 90 days of opening an account.

So, spend $1,000 the first 90 days with your card, and you’ll earn 20% back – that’s a fantastic value.

For many, $200 is a great welcome bonus. But for regular spending, you might find you hit the bonus category caps rather fast. That’s one of the reasons frequent flyers or big spenders might want to consider other cash back cards.

Of course, one of the great things about the Cash Rewards card is there’s no annual fee.

And then there’s the perks and benefits of the Cash Rewards card which again, are limited. Still, it’s worth considering.

Here’s why.

1. Solid Earning Rates for Everyday Expenses

With the Bank of America Cash Rewards card, you’ll earn 1% cash back on everyday purchases. You can earn 2% or 3% cash back on qualifying purchases:

• 3% cash back per dollar spent on purchases made in a category of your choice. This category could be for purchases made for gas, online shopping, dining, travel, drug stores, or home improvement/furnishings
• 2% cash back per dollar spent at grocery stores and wholesale clubs
  • 2% and 3% cash back categories are capped after $2,500 in combined purchases each quarter. Both categories will then earn 1% cash back for the rest of the quarter
• 1% cash back per dollar spent on all other purchases – no cap for 1% cash back purchases

The earning rates for the Cash Rewards card are great for a no annual fee card, but the quarterly cap is a limitation. So you might consider other cards if you’re looking to earn cash back for travel or if you’re a big spender and will easily reach the cap on 3% and 2% cash back each quarter.

Cards that earn cash back at higher rates include the Blue Cash Preferred® Card from American Express and the Capital One Savor Cash Rewards Credit Card.

2. Cash, Cash, and More Cash – Simple Redemptions

The Bank of America Cash Rewards card is true to its name when it comes to redemptions. You can redeem your rewards for, well, cash. Having the ability to redeem for a check or for a cash transfer to a checking or savings account is fantastic, but the redemptions might not be for everyone.

In addition to redeeming your cash back for a check or statement credit, if you bank with Bank of America or manage your money with Merrill Lynch, you’ll more likely to find the Cash Rewards card to be worth it. With Bank of America Preferred Rewards, you could earn bonus cash back depending on how much you have invested:

• $20,000 to < $50,000 – 25% bonus
• $50,000 to < $100,000 – 50% bonus
• $100,000+ – 75% bonus

This makes your earnings with the Bank of America Cash Rewards credit card much more valuable.

You can redeem cash back for direct transfers to eligible Bank of America and Merrill Lynch accounts. You can find a full list of redemption options below.

Here’s how you can redeem the cash back you earn with the Cash Rewards card:

• Check – get your cash back in the form of cash
• Statement credit – your cash back will be applied to your statement balance
• Bank of America accounts – transfer your cash back to eligible Bank of America checking or savings accounts
• Merrill Lynch – transfer your cash back to eligible money or wealth management accounts
• 529 college savings – transfer your cash back to an eligible college savings account

If you’re looking for a cash back card with more flexible rewards, there are a few that are great for travel redemptions. These cards include the Chase Freedom Unlimited and the Wells Fargo Propel American Express® card  – and both also have NO annual fee.

The Wells Fargo Propel card is no longer available for new applicants

3. Purchase Protection and (a Few) Travel Benefits

I’m a firm believer in the power of retail therapy. The Bank of America Cash Rewards credit card is especially great for avid shoppers.

• Extended Warranty Protection – when you use your card for the full amount of eligible purchases, you may be able to extend a manufacturer’s warranty to protect your most valuable purchases

The Cash Rewards card also comes with travel benefits. Here’s how the Cash Rewards card will cover you when you’re out on the road:

• Car Rental Insurance – when you use your card to reserve and pay for car rentals, the card will provide secondary coverage. If your insurance doesn’t cover certain damages, this card might be able to pay for those damages not covered
• Travel Accident Coverage – use your card for the full amount for purchases made with common carriers (like airlines, trains, buses, or cruises) and you will receive automatic travel accident coverage. In the event of covered dismemberment or death, you will be covered by the card

The Bank of America Cash Rewards card is light on benefits. That’s not uncommon for cash back cards and cards without an annual fee. There are a few cash back cards that have more benefits. These cards include the Capital One Savor Cash Rewards Credit Card and the Capital One Quicksilver Cash Rewards Credit Card.

The information for the Wells Fargo Propel, Capital One Savor Cash Rewards card has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.

What About Other Cash Back Cards?

We’ve Ranked the 9 Best Cash Back Credit Cards (7 Have No Annual Fees)

Before you jump on the Bank of America Cash Rewards card, there are a few other cashback credit cards you might consider, especially if you’re a frequent traveler.

The first cash back card ideal for travelers is the Chase Freedom Unlimited. The Chase Freedom Unlimited card doesn’t have an annual fee. You’ll also earn unlimited 1.5% cash back on everyday purchases. The card, however, doesn’t have a lot of benefits. So the only real improvement is the option to redeem cash back for travel.

The second card for travelers is the Wells Fargo Propel American Express® card . This card does not have an annual fee. Additionally, you’ll earn 3 points per dollar spent on travel purchases. However, it’s not just the earning rate that makes this card great for travelers. It also offers a lot of flexibility over other cash back cards.

The Wells Fargo Propel American Express card earns points that can be used for cash back. It also comes with a great welcome bonus of 20,000 points (that’s worth $200) after spending $1,000 in the first three months of card opening. When you earn those 20,000 points, you’ll have the option to redeem for cash back and travel.

What to Consider When Applying for the Bank of America Cash Rewards Card

Though the Bank of America Cash Rewards card might not have an annual fee, it’s still important to question whether or not the card is worth it.

This is because the card counts toward Chase’s 5/24 rule. The 5/24 rule states that, if you’ve opened five or more cards (from any bank, excluding certain business cards) in the past 24 months, you won’t be approved for Chase cards. So though you might be able to get the Cash Rewards card, you’ll want to consider any Chase card offers first.

Bottom Line

Is the Bank of America Cash Rewards credit card worth it? The answer is almost always yes. However, if you’re a frequent flyer or big spender, you might want to consider other cashback cards. For most, however, the Cash Rewards card is definitely worth it.

Aside from the $200 cash back welcome bonus you’ll earn after meeting the required spending, it also comes with these benefits:

• Earn 3% cash back on purchases in a category of your choice (capped at $2,500 in spending per quarter combined with the 2% category, then 1%)
• Earn 2% cash back at grocery stores and wholesale clubs (capped at $2,500 in spending per quarter combined with the 3% category, then 1%)
• Unlimited 1% cash back on everyday purchases
• Simple redemption options including for a check, statement credit, or transfers to eligible Bank of America or Merrill Lynch accounts
• Extended warranty protection on eligible purchases
• Rental car insurance and protection

To learn more about Bank of America cards and rewards, check out these posts:

• Do Bank of America Points Expire?
• Bank of America Points Review: Everything You Need to Know
• Cashback Cards: Best Cash Back Credit Cards With Low Spending Requirements
• No Annual Fee: Best No-Annual-Fee Credit Cards in 2019
• Cashback Cards: Best Cashback Credit Cards
• Protect Yourself and Earn Miles, Points, or Cash Back With the Best Credit Cards for Car Rentals

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Featured Image by Roman Samborskyi/Shutterstock.

Updated 3/3/20