A Look at Bank of America's New Premium Rewards Card
By Ryan Craggs. Photos: Alamy.
Any new credit card coming to market that offers travel rewards is a welcome addition for consumers, and Bank of America's latest one is no exception. Announced this week, and set to hit purses and wallets in September, the new Premium Rewards card is already touting travel perks previously unavailable to BoA clients. How it stacks up to Chase's Sapphire Preferred and Sapphire Reserve, however, is another story.
Annual fee
BoA's Premium Rewards card will come with a $95 annual fee—the same cost for the Sapphire Preferred. Generally, the Sapphire Preferred's annual fee is waived the first year. Chase's Sapphire Reserve comes with a heftier $450 fee.
Sign-up bonus
The Premium Rewards card will give you 50,000 Preferred Rewards points after spending $3,000 in the first three months. Both the Sapphire Preferred and the Sapphire Reserve will give you 50,000 Chase Ultimate Rewards points after spending $4,000 in the first three months.
Travel credits
The BoA Premium Rewards card comes with $100 annual airline incidental statement credit for qualifying travel purchases and $100 credit toward TSA-Precheck or Global Entry application fee (good every four years). The Sapphire Preferred has no such credits, while the Sapphire Reserve comes with a $300 annual incidental travel credit, along with the $100 credit for TSA-Precheck or Global Entry. So effectively, the Premium Rewards card's statement credit offsets its annual fee (plus $5), while the Sapphire Reserve costs a net $150.
Points earning
This is where things get tricky; if you're not familiar with how to best spend your credit card points, try listening to the Travelogue podcast where Traveler editors and points experts explain just that.
As a baseline, the Premium Rewards card earns two points for every $1 spent on dining and travel, and 1.5 points on everything else. The Sapphire Preferred earns two points for every $1 spent on dining and travel, and one point on everything else. The Sapphire Reserve earns three points for every $1 spent on dining and travel, and one point on everything else.
But Bank of America spokeswoman Betty Riess told Traveler, the Premium Rewards card is "based on building relationships and earning more of [customers'] business." For you, that means increased earnings, based on your existing relationship with BoA. Customers enrolled in the [Preferred Rewards program](https://info.bankofamerica.com/preferred-rewards/#benefits) will qualify for better earnings based on the programs' three tiers.
Gold For BofA customers with $20,000 to $50,000 in their accounts—including checking, savings or investment accounts—they'll earn 2.5 points per $1 on dining and travel and 1.875 points on everything else.
Platinum For customers with $50,000 to $100,000 in their accounts, they'll earn three points per $1 on dining and travel, and 2.25 points on everything else.
Platinum Honors Lastly, customers with $100,000 or more in their accounts will earn 3.5 points per $1 on dining and travel, and 2.6 points on everything else.
In short, the more money you've got tied up with Bank of America, the more you can potentially earn on the Premium Rewards card. "The added value clients receive when they are enrolled in Preferred Rewards is an important differentiator and ties in with our focus on rewarding customers for their relationship with us," Riess told Traveler. The program also lets BoA combat what it calls "gamers," according to the Wall Street Journal, or people who attempt to cash in on credit card signup bonuses and rewards.
Redemptions
BoA's Premium Rewards card redeems points at an approximate value of one cent per one point. If redeeming through Chase's Ultimate Rewards portal for travel, the Sapphire Preferred redeems at 1.25 cents per point, while the Sapphire Reserve redeems at 1.5 cents per point. As NerdWallet points out, "The value of points redeemed for travel is not listed on the Bank of America® Rewards Program guidelines. For cash, 2,500 to 9,999 points redeem at $0.005 per point; 10,000 to 24,999 points redeem at $0.008, and 25,000 or more points redeem at $0.010."
Given that the Premium Rewards, Sapphire Preferred, and Sapphire Reserve earn 50,000 of their respective currencies as a sign-up bonus, that'd translate to $500 cash for Premium Rewards, $625 for the Sapphire Preferred, and $750 for the Sapphire Reserve.
The Chase cards, however, become far more valuable when transferring to partner airlines, like Singapore and Korean Air, and booking international travel in business or first class. Such redemptions can approach five or 10 cents per point. In other words, those 50,000 points could potentially buy you a one-way ticket to Asia or Europe in first or business, if you know what you're doing.
Ancillary benefits
Each of these cards runs on the Visa Signature platform, which itself offers other travel benefits. But the Sapphire Preferred and Sapphire reserve also offer primary rental car insurance, and the preferred comes with lounge access—something you might heavily value if you're frequently at airports and don't already have status that gets you entrance.
Conclusion
The final outcome of whether you should opt for the new BoA card depends on how much money you have in accounts with BoA, and how you plan to redeem your points. The Premium Rewards card can outearn a card like the Chase Sapphire Reserve, but is limited in its redemptions. How much you have saved, and how much you spend, will really determine if this card makes sense for you. If you have a lot saved, and earn a lot of points, it can accrue a ton of points. But the rewards appear more limited.
Keep in mind, a basic, cash back card like the Citi Double Cash gets you two percent back, or what's effectively two cents per point. If you're not getting better value than that for your earning and redemption, you're probably wasting your time and points.
This story originally appeared on Conde Nast Traveler.
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