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Bank of America Cash Rewards vs. Blue Cash Everyday: When Blue Is Better

Updated April 26, 2018
Cash Back Credit Cards, Credit Cards
BankAmericard Cash Rewards vs. Blue Cash Everyday
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The Blue Cash Everyday® Card from American Express and the Bank of America® Cash Rewards credit card offer the same big draws: bonus rewards on groceries and gas, similar 0% APR periods and introductory bonuses, and no annual fee. Which you should choose depends less on these features and more on where you bank.

Based only on rewards, the Blue Cash Everyday® Card from American Express is the better choice. But if you have a combined balance of at least $20,000 in Bank of America®, Merrill Lynch® or Merrill Edge® accounts, you’ll get better long-term rewards with the Bank of America® Cash Rewards credit card.

Rewards: Slight win for the Blue Cash Everyday® Card from American Express

The Blue Cash Everyday® Card from American Express pays a higher rewards rate at U.S. supermarkets and select U.S. department stores. The Bank of America® Cash Rewards credit card pays a higher rewards rate for gas purchases and at wholesale clubs. Both cards get you 1% on all other purchases.

Let’s compare them side by side:

 Bank of America® Cash Rewards credit cardBlue Cash Everyday® Card from American Express
Introductory bonus$150 online cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening. $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply.
APR0% on Purchases for 12 billing cycles and 0% on Balance Transfers for 12 billing cycles for balance transfers made in the first 60 days, and then the ongoing APR of 14.74% - 24.74% Variable APR 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 14.49% - 25.49% Variable APR
Gas rewards3%2%
Grocery rewards2%3%
Department store rewards1%2%
Spending caps$2,500 quarterly spending cap on combined grocery, gas and wholesale club purchases. After that, you'll earn 1% on those categories.$6,000 annual spending cap on grocery purchases. After that, you'll earn 1%.

The scales are tipped slightly in favor of the Blue Cash Everyday® Card from American Express for two reasons:

  1. You’ll probably earn more rewards with the Blue Cash Everyday® Card from American Express. The Blue Cash Everyday® Card from American Express offers 3% cash back at U.S. supermarkets and 2% at U.S. gas stations; the Bank of America® Cash Rewards credit card offers the opposite: 3% on gas and 2% at grocery stores, but it also offers 2% back at wholesale clubs. It’s a small but important difference. The average American spends about 60% more on food at home than on gasoline, according to 2014 Bureau of Labor Statistics data, the most recent available figures as of this writing. Plus, the Blue Cash Everyday® Card from American Express offers 2% cash back at select U.S. department stores.
  2. The Blue Cash Everyday® Card from American Express has less-restrictive spending caps on gas. After you’ve spent $6,000 at U.S. supermarkets in one year on the Blue Cash Everyday® Card from American Express, you’ll earn only 1% rewards there. The card doesn’t place caps on other categories. For many people, that isn’t a problem; the average U.S. household spent much less on food at home in 2014. The Bank of America® Cash Rewards credit card is more limiting because it caps rewards on all of its bonus categories. The cap is $2,500 of quarterly spending at grocery stores and wholesale clubs and gas purchases combined.

This isn’t a landslide victory for the Blue Cash Everyday® Card from American Express. Assuming average household spending, you’d earn about $40 more per year in rewards with the Blue Cash Everyday® Card from American Express than with the Bank of America® Cash Rewards credit card.

But that’s if you don’t have a Bank of America® account. If you do bank there, you’ll get an automatic 10% bonus by redeeming your cash back rewards as a deposit into your account. In that case, the Blue Cash Everyday® Card from American Express comes out ahead by only $6 a year. And if you have more than $20,000 in combined balances with affiliated Bank of America® accounts, the Bank of America® Cash Rewards credit card may be the better bet.

» MORE: NerdWallet’s best cash-back credit cards

Why the Bank of America® Cash Rewards credit card is better for some

The Bank of America® Cash Rewards credit card incentivizes loyalty, unlike the Blue Cash Everyday® Card from American Express. This makes it a better choice for a select group of people: those with more than $20,000 in combined balances at Bank of America®, Merrill Lynch® and Merrill Edge® who enroll in the Preferred Rewards program.

You’ll get a rewards bonus of:

  • 25% if your combined balances are between $20,000 and $49,999. That makes the effective rewards rate 3.75% for gas and 2.5% at grocery stores and warehouse clubs.
  • 50% if your combined balances are between $50,000 and $99,999. That makes the the effective rewards rate 4.5% for gas and 3% at grocery stores and warehouse clubs.
  • 75% if your combined balances are more than $100,000. That makes the effective rewards rate 5.25% for gas and 3.5% at grocery stores and warehouse clubs.

NerdWallet used Bureau of Labor Statistics data on average household spending in 2014 for food at home, gasoline, apparel and all other expenses that could reasonably be charged to a credit card to estimate how much you could earn on the Bank of America® Cash Rewards credit card with these various loyalty bonuses, compared with the Blue Cash Everyday® Card from American Express.

The difference in earning power is striking. You’d earn more than $200 more on the Bank of America® Cash Rewards credit card, compared with the Blue Cash Everyday® Card from American Express, when making the same purchases. But that’s easier to say than do. Unless you’re saving for retirement with Merrill Lynch® and Merrill Edge® or keeping a down payment socked away in a Bank of America® savings account, you might not have enough money on hand to qualify for those big rewards.

Verdict

The Blue Cash Everyday® Card from American Express is better than the Bank of America® Cash Rewards credit card for most people — that is, those who don’t qualify for Bank of America®’s Preferred Rewards program. Its cash-back system doesn’t depend on your loyalty to one bank, and you won’t have to maintain a certain savings or investment balance to boost your earnings.

But if you happen to qualify for the Preferred Rewards program and maintaining your balance isn’t an issue, go with the Bank of America® Cash Rewards credit card. You’ll earn much more in the long run.

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.