Bank of America Business Advantage Cash Rewards Review: A Cash-Back Category You Can Choose

For business owners looking for a cash-back card that allows for a little customization, there’s a lot to love about the $0-annual-fee Bank of America® Business Advantage Cash Rewards Mastercard® credit card.

The card offers 3% cash back on the category of your choice from a list of options, which you can change as often as once a month, and 2% cash back on dining. The 3% and 2% rates are good on up to $50,000 in combined choice category/dining purchases each calendar year. You get 1% cash back above the cap on all other spending.

While the spending cap on the bonus categories makes the card a poor option for big spenders, it's a valuable choice for entrepreneurs who can use that 3% category to earn bonus cash back on major expenses without bumping up against the cap. It's even more lucrative for those who qualify for higher rewards rates on the card by keeping a certain amount of money in Bank of America® and Merrill business accounts.

Key features of Bank of America® Business Advantage Cash Rewards Mastercard® credit card

Card type: Small business.

Annual fee: $0.

Sign-up bonus: 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.

Rewards:

• 3% cash back in the category of your choice from a list.

• 2% cash back on dining (for the first $50,000 in combined choice category/dining purchases each calendar year; 1% after that limit is reached).

• 1% cash back on all other purchases.

For the 3% cash-back category, you can choose one of the following categories and change your selection up to once a month:

1. Gas stations.

2. Office supply stores.

3. Travel.

4. TV, telecom and wireless.

5. Computer services.

6. Business consulting services.

If you don't select a category, the default selection will be gas stations. Your category selection will remain the same from month to month unless you decide to change it.

Interest rate: 0% on Purchases for 9 billing cycles, and then the ongoing APR of 13.74% - 23.74% Variable APR.

Foreign transaction fee: 3%.

Other benefits: Those who qualify for Bank of America® Preferred Rewards for Business can earn bonuses on rewards, effectively boosting the card's overall earn rates.

» MORE: Best Bank of America credit cards

Why you might want the Bank of America® Business Advantage Cash Rewards Mastercard® credit card

A 3% Category You Can Choose

For small-business owners that spend a lot in one or more of the categories that can earn 3%, this card's flexibility is valuable. Many of these categories cover expenses that are significant for certain businesses. For example:

• Computer services covers software, network and cloud services, and data processing services.

• Travel covers a broad range of expenses, including airfare, hotel purchases and bus fares.

• Business consulting services includes spending on services for public relations, legal, accounting and tax preparation.

The card also offers 2% cash back on dining, a nice bonus for business owners who often take clients out to restaurants or order takeout for the office. The catch? You'll only earn bonus cash back on the first $50,000 spent each calendar year on combined purchases made in the category of your choice and on dining; after that, you'll only earn 1% cash back. Other cards offer big rewards with no spending caps — but generally, with these cards, you can't choose your own bonus categories.

More Cash Back with Preferred Rewards for Business

If you also use Bank of America® for your small-business banking needs, you may be able to earn more cash back on this card through the issuer's Preferred Rewards for Business program.

To qualify, you need to have at least $20,000 in combined eligible business balances at Bank of America® and Merrill. Depending on how much money you keep with the bank, you can earn bonuses of 25%, 50% or 75% on the rewards earned on this card and other eligible Bank of America® cards, among other perks. For example, if you have a combined eligible business balances of $100,000 or more, you would earn 5.25% cash back in a category of your choice on this card, instead of 3%.

Introductory 0% APR Period

Unlike many small-business cards, this one comes with a 0% APR offer: You'll get 0% on Purchases for 9 billing cycles, and then the ongoing APR of 13.74% - 23.74% Variable APR. For small-business owners spending a lot to ramp up, this could be a cost-effective way to smooth cash flow and pay down major purchases over time.

Why you might want a different card

The bonus rewards cap

If you are a big spender — and many small-business owners are — then the $50,000 spending cap in combined spending on the category you choose and dining might feel limiting. You'd likely be better off with a card that offers rich uncapped rewards, even if it means paying an annual fee.

Take the Capital One® Spark® Cash for Business, for example. This card earns an impressive 2% cash back on every purchase, with no spending caps. There's also a sign-up bonus: Earn a one-time $500 cash bonus once you spend $4,500 on purchases within 3 months from account opening. It doesn't charge foreign transaction fees. The annual fee is $0 intro for the first year, then $95. For small-business owners who spend enough to justify the annual fee, this card could be a better overall fit.

Categories might not match business spending

If you don’t spend much on dining or any of the 3% category options, the Bank of America® Business Advantage Cash Rewards Mastercard® credit card offers limited value. A card with high flat-rate cash-back rewards could be a better fit.

Consider the American Express Blue Business Cash™ Card, which offers 2% cash back on eligible purchases up to $50,000 per calendar year and then 1%, for an annual fee of $0. The card comes with a good 0% APR offer, too: 0% APR for 12 months on purchases and balance transfers, and then the ongoing APR of 13.24% - 19.24% Variable APR.

Modest sign-up bonus

While the Bank of America® Business Advantage Cash Rewards Mastercard® credit card comes with a sign-up bonus, it’s not as big as the ones offered by other small-business cards. The Ink Business Unlimited℠ Credit Card, for example, offers a bigger sign-up bonus: Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening. The annual fee is $0. With this card, you earn 1.5% cash back on all purchases.

it charges a foreign transaction fee

The Bank of America® Business Advantage Cash Rewards Mastercard® credit card comes with a 3% foreign transaction fee, which means you’ll want to use a different card if you’re traveling overseas.

Should you get the Bank of America® Business Advantage Cash Rewards Mastercard® credit card?