The BankAmericard Better Balance Rewards® Credit Card is a no-annual-fee cash back rewards credit card with a somewhat unusual rewards program that isn’t directly tied to spending. Rather than offer a flat cash back rate on purchases, BankAmericard Better Balance Rewards pays out a quarterly lump sum to cardholders who consistently make on-time, above-the-minimum payments on their accounts.
Used properly, this rewards program can be generous, but it isn’t ideal for all cardholders. BankAmericard Better Balance Rewards is also an attractive balance transfer candidate and boasts some additional benefits for Bank of America and Merrill Lynch deposit account holders.
On-Time Payment Bonus
For each quarter in which you pay more than your minimum payment on time each billing cycle, you get a $25 cash rewards bonus. This is good for up to $100 in rewards per year. To qualify, you must either carry a balance on your card or use your card at least once every statement cycle. However, since the interest charged on any carried balance partially or fully offsets the cash benefit, it’s best to simply use your card every statement cycle and lay it off in full.
Your quarterly cash bonus is automatically applied to your account as a statement credit within 30 days of the close of the quarter’s final statement period, unless you elect to deposit it directly into a Bank of America or Merrill Lynch deposit account.
Bank of America Deposit Account Bonus
If you have an open Bank of America deposit account or non-retirement, non-college savings Merrill Lynch investment account, you qualify for an additional $5 cash bonus per quarter – good for up to $20 per year. The bonus is applied to your account as a statement credit or, at your election, deposited into a Bank of America or Merrill Lynch account of your choosing.
There is a 12-billing-cycle 0% APR promotion on balance transfers. There is no introductory purchase APR promotion.
There is no annual fee. The balance transfer and cash advance fees are the greater of $10 or 3% of the total transferred amount, while the foreign transaction fee is 3%. The late payment fee is $37, and the returned payment fee is $27.
Overdraft Protection for Bank of America Deposit Account Holders
If you have a Bank of America checking or savings account, you can opt to link it to your credit card account for overdraft protection purposes. When you attempt a transaction that would normally fail or result in a negative checking account balance, Bank of America automatically draws a cash advance from your credit card and applies it to the negative balance.
There is a $12 fee for each occurrence, and the advanced amount begins accruing interest immediately. However, you can minimize the cost by promptly paying off the advance.
This card requires very good to excellent credit. Any noteworthy blemishes are likely to disqualify your application.
- No Annual Fee. This card has no annual fee, which is great news for frugal cardholders who don’t want to pay for the privilege of building their credit.
- Rewards Structure Offers High Potential Rate of Return. For disciplined cardholders, BankAmericard Better Balance Rewards offers a high potential rate of return. To qualify for the $25 quarterly bonus, you simply need to spend enough each billing cycle to pay a bit more than the minimum payment. To ensure that Bank of America doesn’t waive your balance, you should spend at least $5 over the $25 minimum payment threshold each billing cycle. That translates to $30 in spending per month and $90 per quarter, implying a 27.8% rate of return (and 33.3% if you qualify for the quarterly $5 BofA/Merrill Lynch accountholder bonus).
- Nice Introductory Balance Transfer Promotion. This card comes with a 12-billing-cycle 0% APR balance transfer promotion. That’s great news for cardholders who wish to transfer high-interest balances from existing credit card accounts. Even better, the $25 quarterly bonus is likely sufficient to completely offset (and at least dramatically reduce) balance transfer costs for cardholders who pay off small to moderate-sized transfers (less than $3,333 for regular cardholders and $4,000 for BofA/Merrill Lynch accountholders) within 12 billing cycles.
- Low-Maintenance Rewards. This card’s rewards program is pretty low-maintenance. Every quarter, the balance is automatically applied to your account as a statement credit or deposited into a Bank of America or Merrill Lynch account. No activation or redemption required – a big time-saver relative to cash back cards such as Chase Freedom.
- Additional Benefits for Deposit Account Customers. This card has some useful additional benefits for Bank of America and Merrill Lynch account holders, including the extra quarterly $5 bonus and overdraft protection. That’s an advantage over cards issued by companies that don’t have associated deposit accounts.
- Doesn’t Reward Heavy Spenders Well. The somewhat unusual structure of BankAmericard Better Balance Rewards means that cardholders who spend lightly enjoy the greatest benefits. Each quarter, you either get $25 no matter how big your balance is as long as you pay the minimum on time (or, for BofA/Merrill customers, $30) or nothing. Those who get the highest rate of return on its quarterly bonus, spend just enough to clear the minimum payment threshold (by at least $5, to avoid a potential balance waiver). If you don’t have an existing balance, we’re talking about spending perhaps $30 per month, $90 per quarter, and $360 per year. Most consumers spend far more than that on their primary credit cards. If you’re seeking a single cash back credit card that rewards you for spending as much as you wish, look for one with a flat, unlimited rewards rate – such as Barclaycard CashForward™ World Mastercard® (note: this offer is no longer available) or Citi Double Cash Card (2%). For instance, if you spend at least $6,000 per year, which is not a stretch if you have a healthy household budget and use it as your primary day-to-day credit card, you can come out ahead with Double Cash.
- No Sign-up Bonus. This card doesn’t have a sign-up bonus. Most competing cash back credit cards do offer bonuses to new cardholders. For annual-fee-free competitors, it’s typically in the realm of $100 to $200, often in exchange for just $500 to $1,000 in spending.
- Charges Penalty Interest. BankAmericard Better Balance Rewards charges penalty interest at a rate well in excess of its regular purchase APR. If you occasionally miss payments through no fault of your own, this can really add to your total card ownership costs. Consider a cash rewards card that doesn’t charge penalty interest, such as Discover it.
- Has a Foreign Transaction Fee. This card has a foreign transaction fee, which is a disadvantage for cardholders who regularly travel outside the U.S. If you’re a world traveler, consider an alternative that doesn’t charge a foreign transaction fee, such as Capital One Quicksilver Cash Rewards Credit Card.
The BankAmericard Better Balance Rewards® Credit Card isn’t a typical cash back rewards credit card, but that doesn’t mean it’s not useful for certain types of consumers. For instance, if you’re struggling with an existing high-interest credit card balance, this card offers a helpful one-two punch: a 12-billing-cycle 0% APR balance transfer promotion and an annual cash rewards bonus of up to $120, a combination that can reduce or completely eliminate the cost of small to moderate-sized balance transfers.
To be sure, Better Balance Rewards probably isn’t the best card for everyday spending – but then again, not every credit card is.