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Why I’m Giving My Oldest Credit Card a Second Chance

March 8, 2019
Cash Back Credit Cards, Credit Cards, Rewards Credit Cards
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It wasn’t what I expected: After years of being stashed away in a drawer, my oldest, most boring credit card — the Bank of America® Cash Rewards credit card — recently earned back its space in my wallet.

The reason? In early 2019, the $0-annual-fee card got a new rewards structure that changed the math for me. Among other changes, the card began featuring 3% cash back on a category of your choice, chosen from a list of six options (spending caps apply).

Even though I hadn’t used the card for everyday purchases in years, these revamped benefits were significant enough for me to give it another try. Here’s why I decided that — for me, at least — my old starter card deserved a comeback.

» MORE: NerdWallet’s full review of the Bank of America® Cash Rewards credit card

The option to choose my own 3% category made it more valuable

When I first applied for the Bank of America® Cash Rewards credit card in 2014, it was what you might call a decent gas card. It offered 3% cash back on gas and 2% cash back at grocery stores, with a combined $1,500 quarterly cap on combined bonus category purchases. As a 23-year-old with a long commute at the time, 3% cash back on gas was a great deal. But when I started using public transportation instead, those rewards became completely irrelevant.

Fast-forward to 2019. Instead of promising 3% cash back on gas, the Bank of America® Cash Rewards credit card now allows you to choose your own 3% category from a list of six choices (travel, home improvement and furnishings, dining, online shopping, gas, and drugstores), and change that selection up to once a month. Plus, you get 2% cash back at grocery stores and wholesale clubs with a combined quarterly cap of $2,500 on your chosen category/grocery store/wholesale club spending. This flexibility makes the card much more useful for me.

Like many 20-somethings, my spending habits change frequently. While I can’t say with confidence what my spending will look like in a year, I know what my spending will be like next month, and I like having the ability to fiddle with my bonus categories in advance of a big purchase. I recently switched the card’s category to dining, for example, because I was anticipating a catering bill and wanted to earn bonus cash back on it. (Mission accomplished.) Soon, I’m planning to change the category to travel so I can rack up cash back on some expenses for a trip I’m about to book.

Preferred Rewards boosted my effective rewards rates

When I applied for the Bank of America® Cash Rewards credit card card after college, I had an account with Bank of America® — but I didn’t have enough savings to qualify for the Bank of America® Preferred Rewards program, which offers perks such as bonuses on credit card rewards to account holders who keep a certain amount of money with Bank of America® and Merrill. But now I qualify and can earn richer rewards on the card.

Here’s how the bonuses can boost your rewards rate on this card.

  Combined balance required to qualify Effective rewards rate on the category of your choiceEffective grocery store/ wholesale club rewards rateEffective rewards rate on everything else
Gold (25% boost)$20,000 to $49,9993.75%2.5%1.25%
Platinum (50% boost)$50,000 to $99,9994.5%3%1.5%
Platinum honors (75% boost)$100,000+5.25%3.5%1.75%

With these bonuses, the Bank of America® Cash Rewards credit card isn’t just my go-to card for 3% category spending. It’s also the card I use at grocery stores and Costco now. With my 25% Preferred Rewards bonus, I get 2.5% cash back on these purchases, instead of the regular 2% cash back (spending caps apply). And because I’m using the card to cover at least three spending categories, the rewards add up faster. (A caveat: I’m able to use my card at Costco because I have the Visa version, and Costco accepts only Visa cards. If you have an older version of the card, it might be a Visa, too. The Bank of America® Cash Rewards credit card is currently issued as a Mastercard, though.)

Its annual fee is still $0

At least one thing about me has remained the same since I first applied for the Bank of America® Cash Rewards credit card as a recent graduate: I’m still pretty frugal. Because my spending is relatively low, this card suits me:

  • The annual fee is still $0. As before, I don’t have to try to figure out how much I need to spend on it to come out ahead on rewards.
  • Its spending caps don’t bother me. As of this writing, the card offers 3% cash back on a category of your choice and 2% cash back at grocery stores and wholesale clubs, with a combined quarterly cap of $2,500 on category/grocery store/wholesale club spending. Given my current spending habits, I don’t expect to hit that cap anytime soon.
  • There’s no longer a minimum cash-back redemption requirement when making a one-time redemption into an eligible Bank of America® account. Since the recent changes took effect, you can now cash in your rewards, even if you have only, say, $5 in cash back.

Do your old cards deserve another look?

My experience with the Bank of America® Cash Rewards credit card sounds like a random stroke of luck. But really, it’s not unusual for cards to make changes that benefit existing cardholders.

Sure, issuers sometimes trim benefits on legacy products. But often, as with the Bank of America® Cash Rewards credit card, issuers also revamp rewards to compete with newer offers, and existing cardholders benefit. In other cases, an issuer might do a product change on your account (or you might request one), and your funky starter card from college might transform into a more rewarding offer.

So here’s what I say: Now’s a good time to revisit the benefits on your old accounts. You might be pleasantly surprised at what you find.

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