Bank of America® has revamped its cash-back business credit card, which now features 3% back in one of six categories of spending that an entrepreneur chooses.
The new Bank of America® Business Advantage Cash Rewards Mastercard® credit card, like its predecessor, will have an annual fee of $0. The card has a new rewards structure that is more customizable than the old one but may not offer higher overall rewards to small-business owners, depending on how they use the card and how much they spend.
Besides 3% bonus categories, the new card will earn 2% back on dining on the first $50,000 in combined spending in the choice category plus dining per calendar year (1% thereafter), and 1% cash back on all other purchases.
Cardholders can choose among six spending categories for 3% back:
- Gas stations (the default selection).
- Office supply stores.
- TV/telecom and wireless.
- Computer services.
- Business consulting services.
Cardholders can change 3% categories (online or via app) once each calendar month to impact future purchases. The category stays the same until you change it. An online tool will include a snapshot of previous spending in each 3% category to help cardholders choose the most lucrative 3% category, the bank said.
How rewards compare with the previous version
The main difference is that the new card has a much lower cap on bonus rewards. The previous card’s rewards were:
- 3% cash back on purchases at gas stations and office supply stores, up to $250,000 in combined purchases annually (then 1%).
- 2% cash back on purchases at restaurants.
- 1% cash back on all other purchases.
That high cap of $250,000 was a main attraction of the card versus the competition. And restaurant bonus rewards were uncapped. The newer card features a more restrictive $50,000 cap on combined spending in the bonus category plus restaurants.
So the new bonus-reward structure is more customizable but potentially less lucrative for high spenders because of the lower cap.
Existing cardholders can switch to the new cash rewards program by calling the phone number on the back of their card.
Even higher relationship rewards
If you’re already a small-business customer of Bank of America or Merrill, you can qualify for higher rewards rates based on how much money you have deposited or invested. Cash back on the 3% choice category could go up to 5.25%; the 2% reward on dining could go up to 3.5%, and the unlimited 1% reward for all other purchases could go to 1.75%.
The sign-up bonus for the new card is: Get a $300 statement credit when you make at least $3,000 in net purchases within 90 days of your account opening – with no annual fee, no cap on the amount of cash rewards you can earn and they don't expire.
The old sign-up bonus was expressed this way: “Get a $200 statement credit when you make at least $500 in net purchases within 60 days of your account opening – with no annual fee, no cap on the amount of cash rewards you can earn and they don’t expire.”
Cash rewards can be redeemed in any amount and at any time as a statement credit, or into eligible Bank of America® or Merrill accounts.