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Bank of America Cash Rewards review: How to turn the 3% cash back category of your choice into 5.25%

  • Joseph Hostetler

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    Update:   One or more card offers in this post are no longer available.  Check our Hot Deals for the latest offers.

    There’s no denying that cards which earn points and miles offer some of the best benefits. But the reward that’s most versatile is, of course, cash. Existing particularly in an economy pillaged by COVID-19, collecting a return with cash back credit cards could prove to be the smart move over time. We’re not sure what will become of airline and hotel loyalty programs. Perhaps big devaluations; perhaps bankruptcies; perhaps they’ll be stronger than ever. We just don’t know.

    Although it’s not amazing for travel, the Bank of America® Cash Rewards credit card is a solid cash back credit card for novices and even veterans. Right now, the card offers $200 cash back after meeting easy minimum spending requirements.

    Probably one of the sweetest aspects of the Bank of America Cash Rewards credit card is that there’s no annual fee. And while not loaded with lucrative perks, the card presents some surprisingly valuable aspects, including travel coverage and purchase protection.

    Here’s our full Bank of America Cash Rewards review.

    Earn $200 cash back after spending just $1,000 in the first 90 days of opening a Bank of America Cash Rewards credit card. (Photo by i viewfinder/Shutterstock)

    Current offer

    The Bank of America Cash Rewards credit card offers a welcome bonus of $200 cash back after spending $1,000 on purchases in the first 90 days from account opening. That’s $200 you can redeem for anything — not just travel. Plus, the Bank of America Cash Rewards credit card has no annual fee, so it won’t cost a thing to keep for the long term and potentially improve your credit score by increasing the average age of your accounts.

    The Bank of America Cash Rewards credit card doesn’t have any transfer partners. Rather, cash back redemptions are extremely simple, A few cash back redemption options include a check and direct deposit into a Bank of America account. Read our post on common mistakes people make with cash back credit cards.

    If you bank with Bank of America, the Bank of America Cash Rewards credit card is a no-brainer. You can transfer any amount of your cash back balance to a Bank of America checking or savings account. Additionally, if you bank or save with Merill, you can also transfer your cash back to an eligible 529 account, Wealth Management, Merill Edge, or Cash Management Account.

    Additionally, there’s no annual cap on earning cash back for any purchases made in the 1% category. There is a quarterly cap on all 2% and 3% categories, however, you’ll still earn 1% cash back if you hit the $2,500 cap.

    Benefits and perks

    Earning rate

    This card is unique in that you can choose 3% cash category from a list of six:

    When you open your card, the 3% category defaults to gas. However, you can change your category once per calendar month, which is handy if you know you’ve got a large purchase coming up in a specific category, like travel or home improvement.

    As long as you take into account the quarterly cap of $2,500 in combined purchases for 2% and 3% categories, you should find earning cash back with the Bank of America Cash Rewards credit card fairly simple. Here’s how you’ll earn cash back with the card:

    Bank of America Preferred Rewards

    Bank of America gives banking customers a very unique way to earn tons of bonus points when spending on certain Bank of America cards. It’s called Preferred Rewards.

    Preferred Rewards is offered in three tiers: Gold, Platinum, and Platinum Honors. Each add different bonuses to your credit card spending. To qualify, you must have a certain value of assets between Bank and Merrill investment accounts:

    This makes your earnings with the Bank of America Cash Rewards credit card much more valuable. If you’ve got enough money in the bank, you can turn your 3% cash back into 5.25%. That’s quite a return!

    Preferred Rewards comes with other great benefits such as interest boosts, mortgage and auto loan discounts, even ATM fee reimbursement. Check out our full guide on Bank of America Preferred Rewards.

    BankAmerideals®

    The Bank of America Cash Rewards credit card comes with access to Bank of America’s BankAmerideals®. These are targeted offers for up to 15% cash back with select retailers, restaurants and services.

    To take advantage of this benefit, link your Bank of America Cash Rewards credit card to the BankAmeriadeals mobile app, which displays active offers and deals.

    How to redeem cash back

    With the Bank of America Cash Rewards credit card, you can redeem cash back through the Bank of America website in a number of ways:

    When you redeem cash back for a contribution to a qualifying 529 account with Merrill, a check or automatic redemption for an electronic deposit into a Bank of America checking or savings account, or for credit into a qualifying Cash Management Account with Merrill Wealth Management or Merrill Edge, there’s a $25 minimum redemption amount.

    Your cash back will never expire as long as your account is open and in good standing. If you close your account, you’ll lose the remaining cash back balance.

    Transfer the cash back you’ve earned from the Bank of America Cash Rewards Credit Card directly to your Bank of America checking account. (Photo by Pavel Kapysh/Shutterstock)

    Is the annual fee worth it?

    Considering the Bank of America Cash Rewards credit card doesn’t have an annual fee yet comes with a $200 cash back welcome bonus, the card is worth it if you prefer cash-back rewards.

    Who the Bank of America Cash Rewards for?

    The most important thing you’ll want to consider before opening this card is if you plan on applying for any of the best Chase credit cards. This card will count toward your Chase’s 5/24 count. Essentially, if you’ve opened five or more credit cards in the past 24 months, you won’t be approved for valuable Chase credit cards like the Chase Sapphire Preferred® Card or Chase Sapphire Reserve®.

    You’ll want to determine if the Bank of America Cash Rewards credit card is one of the four cards you’ll want in the next two years if you plan on applying for a card issued by Chase.

    Aside from that factor, this is a personal credit card and most applicants with a good credit score and income should be eligible for this card. With no annual fee and earning cash back, your approval odds could be higher than with some premium credit cards.

    Here’s what Bank of America states about eligiblity:

    This card may not be available to you if you currently have or have had the card in the preceding 24 month period.

    That means if you have the card, you can’t get it again. If you had the card at any point in the last 24 months, you can’t get it again.

    Additionally, if you’ve opened other Bank of America cards recently, you may not be approved. Unofficially, Bank of America won’t approve more than:

    Bottom line

    The Bank of America Cash Rewards credit card might not come with a bunch of benefits but it’s still a solid cash back credit card. Cash back credit cards are worth it for every kind of consumer, whether you travel or not. Many are choosing to switch to cash back especially in the uncertain times following the brunt of COVID-19’s effect on the economy.

    One of the reasons the Bank of America Cash Rewards credit card is such a solid card is the sign-up bonus. You’ll earn $200 cash back when you spend $1,000 on purchases in the first 90 days of opening an account.

    With no annual fee, the Bank of America Cash Rewards credit card is great for frugal spenders. Additionally, you can earn up to 3% cash back in a category you choose from a list of six, including travel, gas and home improvement on up to $2,500 in combined spending with the 2% category (grocery stores and wholesale clubs) per quarter, then 1%. You’ll earn 1% cash back everywhere else.

    You’ll also receive benefits including rental car coverage, extended warranty protection and access to BankAmeriDeals® for up to 15% cash back with participating partners.

    For the latest tips and tricks on traveling big without spending a fortune, please subscribe to the Million Mile Secrets daily email newsletter.

    Updated 6/5/20

    Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)