Bank of America Preferred Rewards Review

ByRob Berger

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The Bank of America Preferred Rewards program offers increased credit card rewards and savings rates, and lower banking fees. It requires at least $20,000 in eligible BofA and Merrill Edge accounts. In this review, we’ll walk through the program’s benefits and requirements, with a focus on its credit card rewards bonus.

Bank of America Preferred Rewards Program

Bank of America Preferred Rewards

Bank of America’s Preferred Rewards program offers four key features:

  1. Higher interest rates on savings accounts
  2. Higher rewards bonuses on credit cards
  3. Lower banking and investing fees
  4. Lower interest rates on home and car loans

Preferred Rewards Tiers

There are three tiers to Preferred Rewards: Gold, Platinum and Platinum Honors. The rewards vary for each tier, as does the amount needed to qualify. Preferred Honors requires at least $20,000 in combined balances in Bank of America deposit and Merrill Edge investment accounts:

  • Gold: $20,000
  • Platinum: $50,000
  • Platinum Honors: $100,000

Qualification is based on a three-month combined average daily balance. As a result, it will take three months before you can qualify. Once you qualify, the rewards are based on your tier:

Gold

  • Savings Interest Rate Booster: 5%
  • Credit Card Rewards Bonus: 25%
  • ATM Fee Waiver: N/A
  • Merrill Guided Investing: 0.05% discount
  • Mortgage Fee Reduction: $200
  • Home Equity Rate Discount: 0.125%
  • Auto Loan Rate Discount: 0.25%
  • Select Banking Services: No Fees

Platinum

  • Savings Interest Rate Booster: 10%
  • Credit Card Rewards Bonus: 50%
  • ATM Fee Waiver: Up to 12 per year
  • Merrill Guided Investing: 0.10% discount
  • Mortgage Fee Reduction: $400
  • Home Equity Rate Discount: 0.250%
  • Auto Loan Rate Discount: 0.35%
  • Select Banking Services: No Fees

Platinum Honors

  • Savings Interest Rate Booster: 20%
  • Credit Card Rewards Bonus: 75%
  • ATM Fee Waiver: Unlimited
  • Merrill Guided Investing: 0.15% discount
  • Mortgage Fee Reduction: $600
  • Home Equity Rate Discount: 0.375%
  • Auto Loan Rate Discount: 0.50%
  • Select Banking Services: No Fees

One way to qualify is to transfer an IRA or roll over a 401(k) int an account at Merrill Edge. It’s the approach I followed. Keep in mind, however, that retirement accounts only qualify the individual named on the account. For those who are married, each spouse would individual need to transfer a retirement account for both to qualify. Alternatively, you could transfer joint taxable accounts for both spouses to qualify.

Bank of America Credit Cards

The most important perk for me is the credit card rewards bonus. The rewards boost makes some of Bank of America’s credit cards a top pick in both the cash back and travel categories. To start, here are the key BofA credit cards eligible for Preferred Rewards:

As you can see, Preferred Rewards applies not just to cash back and travel, but also to secured credit cards and student credit cards.

We applied and were approved for the Bank of America Premium Rewards credit card.

Bank of America Premium Rewards Credit Card

When paired with Preferred Rewards, it can serve as a one-card solution to maximize cash back rewards. Without Preferred Rewards, the card still pays very good rewards:

  • 2x points: Travel and Dining purchases
  • 1.5x points: All other purchases

While good, without Preferred Rewards the card is not best in class. The Citi Double Cash pays 2% on all purchases, as do several other credit cards. Paired with Platinum Honors and its 75% rewards boost, however, turns the card into a game-changer:

  • 3.5x points: Travel and Dining purchases
  • 2.625x points: All other purchases

Points are worth one penny each, turning these rewards into 3.5% and 2.625% cash back. That’s best in class. On top of that, you can earn 50,000 bonus points worth $500 if you spend $3,000 in purchases on the card in the first 3 months.

Rewards Potential

So what does this all mean in terms of cash rewards? The amount of cash back will of course depend on how much one charges to the card. I assumed we’d spend $1,000 a month in travel and dining out, and $4,000 a month on all other purchases. Using Bank of America’s handy calculator, here are the results:

Bank of America Premium Rewards calculator

Without Preferred Rewards, the card generates a respectable $960 in rewards. Add in Preferred Rewards, however, and the amount goes up to as high as $1,680. That’s what we are after, and it shows the potential of Preferred Rewards.

You can use the Bank of American Preferred Rewards calculator to see how much you could earn based on your own spending patterns and Preferred Rewards tier level.

Bofa Preferred Rewards Video

Final Thoughts

Bank of America Preferred Rewards, paired with an eligible credit card, produces best in class reward levels. While we’ll continue to use other credit cards on a limited basis, the BofA Premium Rewards will become our everyday credit card. For those who don’t qualify for Platinum Honors, however, other credit cards are probably a better option.

Rob Berger is the founder of allCards.com. He's written about personal finance and investing since 2007 and is the author of the highly acclaimed book, Retire Before Mom and Dad. He is a former litigation attorney in the securities field and the Founding Editor of Forbes Advisor.