Getting the Most From Your Bank of America Cash Rewards Card: There Are No Shortcuts

To maximize rewards, you'll need a Bank of America or Merrill Lynch account with a big balance.

Claire TsosieFebruary 26, 2021
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To get the most out of your Bank of America® Cash Rewards credit card, you need to go all in. That is, you need to have a checking or savings account with Bank of America® or an investment account with Merrill — preferably one with a fat balance — to really move the needle on your total rewards earnings. Putting more of your grocery store and other purchases on your card will help, too, but just a little.

The Bank of America® Cash Rewards credit card is a difficult card to maximize because it rewards loyalty above all else. There aren't any shortcuts to loyalty. You either have it or you don't.

Bank of America® Cash Rewards Credit Card
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Getting more with the Bank of America® Cash Rewards credit card

There are two paths to maximizing credit card rewards: spending and redeeming. With the Bank of America® Cash Rewards credit card, you can get 25% to 75% more rewards when redeeming if you have high enough balances in your affiliated checking, savings and investment accounts. But because of the way the card’s spending caps are structured, it’s more difficult to maximize rewards just through spending.

With the Bank of America® Cash Rewards credit card, you’ll earn:

  • 3% for the spending category of your choice (gas, online shopping, dining, travel, drug stores or home improvement/furnishings). You can update your choice category for future purchases once each calendar month, or do nothing and it stays the same.

  • 2% at grocery stores and wholesale clubs.

  • 1% on everything else.

There's a combined quarterly cap of $2,500 spending. That means you'll get 2% or 3% on the first $2,500 spent each quarter in those categories together, but once you hit that limit, you'll earn only 1% in cash back until the following quarter.

Shopping strategically will help, a little

To earn more when shopping with the Bank of America® Cash Rewards credit card:

Shop where it counts most. As with other credit cards, the Bank of America® Cash Rewards credit card earns rewards based on how each merchant is categorized. If you buy a food item as a gas station, for example, it would likely be coded as a gas purchase, not a grocery store purchase.

You can check to see how each purchase is categorized when you go to your account online and click on the drop-down menu on a certain transaction.

Max out your bonus spending caps. If you can meet the Bank of America® Cash Rewards credit card's spending caps each quarter without overspending, you'll get more value out of this card. How much you earn can depend a lot on what spending category you choose.

Because of the card's combined spending caps, your rewards shift depending on how you max out these caps — that is, how you split up that first $2,500 each quarter:

  • If you maxed out all your quarterly spending caps the 3% cash back category of your choice, you’d earn $300 in rewards in a year.

  • If you maxed out half your spending caps for your chosen category and half your spending caps at grocery stores and wholesale clubs, you’d earn $250.

  • If you maxed out all your spending caps at grocery stores and wholesale clubs, you’d earn $200.

To earn the most rewards possible, you’d have to max out your spending caps only for your chosen category and avoid grocery stores and wholesale clubs. But this is unhelpful advice. Let's say you choose gas as your 3% cash back category: On average, Americans spent about 60% more on food at home than they did on gas in 2014, according to the Bureau of Labor Statistics. Many might also find it challenging to hit those spending caps in the first place.

Instead of bending over backward all year just to eke out an extra $50, it’s easier to focus on maximizing your rewards through redemption. Your gains will be much higher, all for minimal effort, if you have a high enough balance in the right checking, savings or investment account.

Redeeming wisely: Preferred Rewards will boost your earnings

Your Bank of America® Cash Rewards credit card offers three redemption options:

  • Statement credit, which is a credit applied toward your current balance.

  • Direct deposit into a Bank of America® checking or savings account or an eligible account at Merrill.

  • Personal check, which may take about 14 days to reach you by mail.

For each option, you need a minimum of $25 to redeem.

To get the most from your card, redeem for direct deposit. Your rewards bonuses will be larger if you have a high balance in your combined Bank of America®, eligible Merrill accounts and qualify for the Bank of America® Preferred Rewards program:

  • With a combined balance of $20,000 to $49,999, you’ll get 25% more rewards.

  • With $50,000 to $99,999, you’ll get 50% more rewards.

  • With $100,000 or more, you’ll get 75% more rewards.

Say you maxed out half your spending caps at grocery stores and wholesale clubs and half for gas, for example. If you didn't have a Bank of America® account, you'd get $250 in a year. But if you had qualifying accounts with more than $100,000 combined, you'd get $437.50 in the same year.

Preferred Rewards aren’t automatic. If you qualify for the program, you have to enroll to start getting the benefits, which you can do here. You can qualify when you have both a Bank of America® personal checking account and a three-month combined average balance of $20,000 or more in a Bank of America® checking or savings account or an eligible Merrill account, according to Bank of America®’s website.

Keeping $100,000 in your account would dramatically increase your total earn rate on the card, from 3% on gas and 2% at grocery stores and wholehouse clubs to 5.25% and 3.5%, respectively.

If you don't happen to have $100,000 available to put into an account and you aren’t getting many loyalty benefits out of the Bank of America® Cash Rewards credit card, it might just be easier to earn bigger rewards on other cards, like the Blue Cash Preferred® Card from American Express, rather than trying to qualify for the Preferred Rewards program.

Earn more with loyalty

With the Bank of America® Cash Rewards credit card, there isn’t a quick and easy way to increase your earnings. It’s designed as a utilitarian cash-back card, not as a card for maximizing rewards. The only way you can really get ahead in a big way is by staying loyal to Bank of America® and maintaining a high balance in your bank account or investment account.

If you can, and if you want, go all in. If that’s not an option, look for a credit card that makes earning rewards easier.

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