Bank of America® Cash Rewards Credit Card Review – 3% Gas, 2% Groceries

The Bank of America® Cash Rewards Credit Card is a cash back credit card with a generous rewards program and a nice lineup of features, particularly for customers with other Bank of America® accounts. Bank of America® Cash Rewards’ earning scheme focuses on gas purchases and grocery purchases, two broad spending categories that are sure to appeal to cardholders who use this as their everyday spending vehicle.

This card competes with a number of other general-purpose cash back rewards credit cards, including the Capital One Quicksilver Cash Rewards Credit Card, the Citi Double Cash Card, and Chase Freedom.

Key Features

Sign-up Bonus

When you spend at least $500 within 90 days of opening your account, you get a $200 cash rewards bonus.

Earning Cash Back Rewards

Every $1 spent on gas earns 3% cash back, and every $1 spent at the grocery store earns 2% cash back. Keep in mind that warehouse clubs and discount superstores, such as Sam’s Club and Walmart, don’t count as grocery stores for this card’s purposes. Bank of America® Cash Rewards’ gas and grocery categories have a quarterly spending limit of $2,500 in both categories combined. Above that amount, gas and grocery purchases earn an unlimited 1% cash back. All other purchases also earn an unlimited 1% cash back.

Redeeming Cash Back Rewards

You can redeem your earned cash back, starting at $25, for statement credits, paper checks, deposits into Bank of America® checking or savings accounts, or deposits into Merrill Lynch Cash Management accounts. Any cash back redeemed as a Bank of America® or Merrill Lynch deposit automatically gets a 10% bonus at redemption – so, if you redeem $20, your total cash back deposit is $22.

Preferred Rewards Benefit

Bank of America® Preferred Rewards customers are entitled to cash back bonuses: Gold tier customers ($20,000 to $50,000 on deposit with Bank of America®) earn a 25% cash back bonus, Platinum tier customers ($50,000 to $100,000 on deposit) earn a 50% cash back bonus, and Platinum Honors customers ($100,000-plus on deposit) earn a 75% bonus.

Overdraft Protection for Bank of America® Deposit Account Holders

Current Bank of America® customers can link their checking accounts to their Bank of America® Cash Rewards cards for use as an overdraft protection mechanism. When an overdraft occurs, Bank of America® charges a cash advance to the credit card to cover the shortfall in the checking account. Advances are always charged in multiples of $100 – for instance, a $150 overdraft would result in a $200 advance. Advances cost $12 apiece and accrue interest at the maximum cash advance rate (25.24% APR).

Introductory APR

See terms for current APR information.

Regular APR

See terms for current APR information.

Important Fees

There is no annual fee with this card. Balance transfers and cash advances both cost the greater of $10 or 3% of the transferred amount, and international transactions cost 3% of the transferred amount. Late fees cost $37, while returned payment fees cost $27.

Credit Required

This card requires good to excellent credit. If you have a few minor blemishes on your credit report, you still stand a decent chance of approval.

Advantages

1. No Annual Fee. Bank of America® Cash Rewards doesn’t charge an annual fee. That’s a nice perk relative to some other cash back cards with similar benefits, such as American Express Blue Cash Preferred and EveryDay Preferred.
2. Good Sign-up Bonus. Bank of America® Cash Rewards has a solid, easily attainable sign-up bonus: $200 cash rewards when you spend $500 in eligible purchases within 90 days of opening your account.
3. Bank of America® Deposit Account Holders Get a Nice Bonus. If you have a deposit account with Bank of America®, you’re guaranteed a 10% bonus on your cash back earnings. If you earn $100 in a calendar year, that’s an extra $10 to play with at the end. If you’re fortunate enough to have more than $20,000 on deposit with BofA, you make out even better – boosting your cash back by 25%, or more if you hit the other tiered thresholds of $50,000 (for 50% back) and $100,000 (for 75% back). Other credit card issuers tied to deposit institutions don’t offer this benefit.
4. No Quarterly Categories. Bank of America® Cash Rewards’ spending categories never change. No matter where you are or what the calendar says, you can expect to earn the same cash back rates in the same places, all the time. That’s not so for Chase Freedom, which has spending categories that change each quarter.

Disadvantages

1. Gas and Grocery Benefits Are Capped. Bank of America® Cash Rewards Credit Card’s gas and grocery benefit is capped at a cumulative quarterly spending limit of $2,500. If you spend more than $2,500 per quarter in both categories combined, consider looking for better grocery and gas credit cards, such as PenFed Platinum Cash Rewards Credit Card (unlimited 5% back at the pump) and American Express Blue Cash Preferred (3% back at gas stations and 6% back at supermarkets).
2. Charges Penalty Interest. Bank of America® Cash Rewards charges penalty interest. If you occasionally miss a payment, this can really impact your card ownership costs. Consider a cash back option that doesn’t charge penalty interest, such as Chase Freedom.
3. Has an International Transaction Fee. This card comes with a 3% international transaction fee, which is a detractor for cardholders who travel outside the country – including those taking road trips to Canada or Mexico. Capital One Quicksilver waives international transaction fees.
4. Doesn’t Come With a Free Credit Score. Bank of America® Cash Rewards doesn’t offer a free credit score in your online account dashboard or with your monthly statement. That’s a big drawback relative to Capital One Quicksilver, which offers free FICO scores.

Final Word

The Bank of America® Cash Rewards Credit Card has a nice benefit: natural synergy with a huge consumer banking network. Millions of Americans have checking and savings accounts with Bank of America® or use Merrill Lynch for their investment needs. If you’re among them, this credit card is a great way to improve your earning power beyond the standard 1%-2%-3% cash back earning scheme. And, if you’re not yet a Bank of America® deposit account holder, this card could encourage you to take another look.