2018 Bank of America Cash Rewards Credit Card Review
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The Verdict: The Bank of America® Cash Rewards credit card is an attractive everyday spending vehicle for people with excellent credit (Bank of America is a WalletHub partner). Things begin on a positive note, with no annual fee to worry about and the ability to earn a $200 initial bonus for spending just $500 in the first 90 days after account opening. Plus, you’ll have access to 0% financing on new purchases and balance transfers for the first 12 billing cycles.
The Bank of America® Cash Rewards credit card even supplements its base 1% cash-back earning rate with 2% back on groceries and wholesale clubs and 3% back on gas. But there’s a catch. Those bonus earning rates apply to only the first $2,500 in combined grocery, wholesale clubs and gas purchases each quarter. So if you spend more than $833 a month on such everyday necessities, you will wind up hitting that limit and earning only 1% back — slightly less than the market average of 1.06% — on all your purchases for the rest of the quarter.
For context, the average consumer spends about $1,650 in those two categories combined, per quarter, according to Bureau of Labor Statistics data. So if your spending is average or a bit heavier, the quarterly limit shouldn’t be a problem. As such, this card is a good option for moderate spenders who spend more on road trips, commuting and food for the family than the likes of airfare and hotel stays. And that’s especially true if you have a Bank of America bank account, which has the potential to make the card 10% more rewarding. You can learn more about why that’s the case below.
- $200 Initial Bonus For Online Applicants: The average consumer has far more than $167 in credit-card eligible expenses each month. That means most qualified applicants will easily be able to meet the $500 threshold within the first 90 days of account opening and thereby claim their $200 prize. That’s effectively a discount of up to 40%, provided in the form of a statement credit.
Up To 3% Cash Back: You will earn 3% cash back at gas stations and 2% at grocery stores and wholesale clubs for the first $2,500 spent in those categories, collectively, every three months. That means this flashy feature is worth a maximum of $300 per year.
Beyond that, you will earn slightly less than the rewards-card market average of 1.06% cash back, driving the average person’s first-year rewards earnings to $477, according to our calculations. The best part: Your rewards will never expire, unless your account is closed, in which case any unused portion will be forfeited by Bank of America.
0% APR For 12 billing cycles: Rewards credit cards should ordinarily be paid in full each month in order to prevent finance charges from eroding your earnings. The one exception to this rule is when an extended 0% introductory term is available and you are capable of repaying amounts financed by the conclusion of this promotional period. So if you have an unavoidable big-ticket purchase coming up, the combination of Bank of America Cash Rewards™ and strategic use of a credit-card calculator could save you some money.
This introductory rate also applies to balance transfers, but a 3% transfer fee lurks to spoil the savings party.
- No Annual Fee: Many rewards cards charge annual fees to offset the cost of providing users with cash back, points and miles. Such cards can still pay off for high-volume, high-value spenders, but some people would rather avoid the pressure of having to make their card worthwhile. No-annual-fee rewards cards such as Bank of America Cash Rewards™ help you avoid playing from behind, so to speak, while giving you the option of not using your card if you so choose.
Potential For A Very High Regular APR: You need excellent credit to get this card, but you may come to find that your interest rate is unbefitting of the term “excellent.”
For a point of reference, the average credit card for people with excellent credit has a 14.19% APR, while the average “fair credit” credit card charges 22.41%, according to WalletHub’s latest Credit Card Landscape Report. That means you’re guaranteed to get an above-average rate for your credit rating, and it could even be higher than what a financially unproven applicant could expect to pay on the open market.
3% Foreign-Transaction Fee: The Bank of America Cash Rewards™ card is not a good travel companion for the simple reason that it will overcharge you on every purchase that you make, to the tune of 3%. That’s $150 on a $5,000 family vacation to Europe, for example. It also cuts your savings on currency conversion from 5.78% (relative to the average bank) to 2.78%.
The same phenomenon also affects purchases made through internationally based merchants when you are physically in the U.S. So if you’re either a world traveler or a world consumer, you should probably find another card for related purchases.
Other Things To Consider
- 10%+ Rewards Bonus For Bank-Account Redemption: If you have a Bank of America checking or savings account or could easily open one, this card just became 10% more rewarding. That’s because you’ll earn at least an additional 10% on the rewards amount you redeem as a deposit into a Bank of America account. In fact, this bonus could be as high as 75%, depending on your Preferred Rewards status, as dictated by the total amount that you have deposited in Bank of America and Merrill Edge accounts.
Compared To The Competition
Rewards are perhaps the most popular aspect of credit-card use for consumers and, in turn, for issuers. Myriad attractive offers are available, with the value attainable from them near historic highs. There’s a lot of money riding on your decision, in other words.
So in the interest of helping you make an informed selection, we compared Bank of America® Cash Rewards credit card to some of the other most popular cash-back offers on the market across five key categories. You can find the results below.
Bank of America® Cash Rewards credit card
Citi® Double Cash Card – 18 month BT offer
Blue Cash Preferred® Card from American Express
Capital One® Quicksilver® Cash Rewards Credit Card
|Rewards Rate||1 - 3% Cash Back||2% Cash Back||1 - 6% Cash Back||1.5% Cash Back|
|Purchase Intro APR||0% for 12 billing cycles||Not Offered||0% for 12 months||0% for 15 months|
|Transfer Intro APR||0% for 12 billing cycles for balance transfers made in the first 60 days|
Transfer Fee: 3% (min $10)
|0% for 18 months|
Transfer Fee: 3% (min $5)
|0% for 12 months|
Transfer Fee: 3% (min $5)
|0% for 15 months|
Transfer Fee: 3%
|Regular APR||15.24% - 25.24% Variable||15.49% - 25.49%* (V)||14.99% - 25.99% (V)||14.74% - 24.74% (V)|
|Editors’ Rating||4.0 / 5||5.0 / 5||4.6 / 5||4.4 / 5|
|Details, Rates & Fees||Learn More||Learn More||Learn More|
Rates & Fees
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