Updated Bank of America Credit Card: Better, but Nowhere Near Best

The recently revised Bank of America credit card is a shining example of why no kid should ever be proud of bringing home the “Most Improved” trophy. The newest iteration of the BankAmericard Cash Rewards card features a much better rewards rate than it did before. But for all that, the card is still nowhere near the top of any conceivable list of cash back credit cards. BankAmericard Cash Rewards 2.0 does give better rewards on everyday spending categories, but it’s still beat out by a number of other cards including (but by no means limited to) the Chase Freedom and AmEx Blue Cash Preferred.

First and foremost, the Cash Rewards card is targeted to consumers looking for rewards on gas and grocery purchases. The card offers 3% cash back on gas and 2% back on groceries for up to $1,500 in purchases per quarter. In all other spending areas, and on gas and grocery purchases above the $1,500 limit, you get 1% cash back.

Out with the old, in with the new

The previous BankAmericard Cash Rewards offered a flat 1% rewards rate on all purchases, but gave 3% back on gas, groceries and drugstore spending for the first 6 months. With such a brief period to cash in on the higher rewards rate, the card had little to recommend it compared with other cash back rewards cards.

With this new version, Bank of America is offering applicants a $50 cash back signup bonus when they spend $100 in the first 60 days, on top of the sustained bonus rewards on groceries and gas.  You also receive a 10% rewards bonus when you redeem your rewards into a Bank of America savings or checking account.

But it still doesn’t match the competition

If the BankAmericard Cash Rewards card looks like it would be a good fit for you, we strongly suggest that you reconsider. Two other cards that we believe far surpass the Cash Rewards are the Chase Freedom and American Express Blue Cash Preferred.

The Chase Freedom

The Chase Freedom offers 5% cash back on purchases in rotating bonus categories, among them grocery stores, theaters, department stores, and dining, as well as 1% back elsewhere. On top of this, you can earn up to 10% cash back on select online shopping. The card has a signup bonus of $100 cash back when you spend $500 in first 3 months.  The Freedom has a number of bonus categories, only a few of which we mentioned above. Its rewards structure is equivalent to 2% back on all its bonus categories throughout the entire year: 5% back for one quarter and 1% back for three. Instead of getting 3% back on gas and 2% on groceries, you could get 2% back on gas, groceries, movies, clothes, airfare…Plus, the Freedom’s rewards, like the Bank Americard’s, are capped at $1,500 in purchases a quarter. But this means that you can get at most 3% rewards on $1,500/quarter, if you use your rewards entirely for gas. With the Freedom, if you max out, you’re guaranteed 5% of $1,500 a quarter.

The Chase Freedom is a great option if you appreciate cash back on a variety of categories. If your purchases are heavily weighted towards gas, groceries and clothing, we’d suggest the American Express Blue Cash Preferred, whose rewards rates trump the Bank Americard’s and then some.

The American Express Blue Cash Preferred

The American Express Blue Cash offers a much better rewards rate on the Bank Americard’s everyday categories. You earn 6% back at supermarkets, 3% at gas stations and department stores, and 1% elsewhere. Best of all, there’s no quarterly limit! There’s a $100 cash bonus if you spend $500 in the first 60 days, and American Express offers an introductory APR of 0% for 6 to 12 months. The Blue Cash Preferred’s only downfall is its annual fee of $75, but with a rewards rate as high as 6%, we think most folks will come out well ahead with the American Express Blue Cash Preferred.

Here’s why we think it’s a much better everyday-purchases card than the Bank Americard. Let’s say you’re the average American, and you spend $150 on gas, $300 on groceries, $125 on clothing and $1,000 elsewhere each month.

(For those of you doing the math at home, we factored in the Blue Cash’s annual fee as well as the Bank Americard’s $1,500 quarterly cap. We assumed that you, being an extraordinarily savvy consumer, maxed out your gas rewards and used the rest of your $1,500 on lower-reward groceries).

Chase Freedom® Visa - $100 Bonus Cash Back	Blue Cash Preferred℠ Card from American Express
Signing Promo
$100 Cash Bonus after spending $500 - in first 3 months	$150 Cash Bonus after spending $1,000 - in the first 3 months.
Intro APR Promo
Purchase: 0% for 15 mos Bal Trans: 0% for 15 mos	Purchase: 0% for 12 mos Bal Trans: None
Annual fee
$0	$75
Details
Earn $100 Bonus Cash Back after you make $500 in purchases in your first 3 months 0% Intro APR for 15 months on purchases and balance transfers 5% Cash Back on up to $1,500 spent at grocery stores and movie theaters from 4/1/12 - 6/30/12 You'll enjoy new 5% categories every 3 months like gas stations, restaurants and even airlines. It's free and easy to activate your bonus each quarter! Unlimited 1% Cash Back on all other purchases Up to an additional 10% Cash Back when you shop online at select merchants through Chase No annual fee and rewards never expire	Earn $150 cash back after spending $1,000 in eligible purchases in the first 3 months of Cardmembership 0% intro APR on purchases for 12 months, flexibility to pay over time Get 6% cash back at supermarkets, 3% cash back at gas stations and department stores, and 1% cash back on all other purchases NO spend minimum, NO enrollment, and NO rotating rewards categories Get a $75 Referral Bonus for each friend or family member who is approved for the Card The annual fee pays for itself. With 6% cash back at supermarkets, if you spend just $25 weekly at your supermarket, you can receive over $75 cash back from these purchases alone.