Bank of America Travel Rewards Card Pays 2.625% on Everything

[Originally published in 2014. Updated on August 23, 2023. Links are NOT affiliate links. We don’t get paid if you apply for any credit card.]

I have a brokerage account at Merrill Edge and a free checking account at Bank of America. I qualified for Bank of America’s Preferred Rewards program after three months. Then I added a Bank of America Travel Rewards card to the Preferred Rewards program.

75% Bonus from Preferred Rewards

On a stand-alone basis, this credit card isn’t that special. It gives 1.5% rewards on every purchase with no caps or special categories. It has no annual fee and no foreign transaction fee. There’s a small sign-up bonus. The Preferred Rewards program makes it much nicer.

When you enroll in Bank of America’s Preferred Rewards program, you get a boost in credit card rewards. $100k in assets held at Merrill Edge puts you in the Platinum Honor tier, which gives you a 75% bonus on credit card rewards. 1.5% rewards with no caps on everything at the base level then becomes 2.625% rewards on everything in the Platinum Honor tier.

For example, a $71.30 purchase earned 187 reward points worth $1.87. That’s 2.625%. You get the 75% bonus after you qualify for the Platinum Honor tier in Preferred Rewards. If your Bank of America checking account is new, it has to go through three month-ends before you qualify.

This Bank of America card with a 75% bonus gives more rewards than other 2%-rewards cards such as the Fidelity Visa or the Citi Double Cash card.

Hold ETFs at Merrill Edge

The best way to qualify for the Platinum Honor tier in the Preferred Rewards program is by transferring $100,000 worth of investments to Merrill Edge and linking the Merrill Edge accounts to the Bank of America checking account. The $100,000 doesn’t have to sit in cash. It can be stocks, bonds, mutual funds, or ETFs held in IRAs or regular brokerage accounts.

You don’t have to sell your investments and trigger capital gains when you transfer to Merrill Edge. Existing investments can be transferred “in kind.” Merrill Edge sometimes gives a bonus for your transfer. Google “Merrill Edge transfer bonus” for the current offer.

You don’t have to trade in the Merrill Edge accounts either if you prefer to use a different broker. Just holding $100,000 worth of an S&P 500 ETF in an IRA and setting up free automatic dividend reinvestment will do. Merrill Edge doesn’t charge maintenance or inactivity fees.

If you do use Merrill Edge to trade, Merrill Edge charges zero commission on online stock and ETF trades.

Redeem Against Past Travel and Dining Purchases

The reward points from the Travel Rewards card are worth the most when you redeem them as a statement credit against travel and dining purchases made in the previous 12 months (100 points = $1). As long as you charge some travel and dining expenses on this card once in a while, you have plenty of opportunities to redeem the points.

These charges all counted as travel in my account:

• Airlines (both tickets and baggage fees)
• Hotels
• Airbnb
• Car rentals
• Uber and Lyft
• Transit (train, bus, ferry)
• Parking and tolls
• Ski passes

Dining includes bars, restaurants, and fast food.

The minimum number of points for redemption is 2,500 points (earned by spending $952 at 2.625%). You have one year from the date of a travel or dining charge to redeem points against it. You can redeem points against the same charge multiple times until the charge is fully covered by points redemption.

Don’t Travel or Eat Out?

If you don’t travel or eat out and therefore will have difficulty finding travel and dining charges to redeem rewards against, Bank of America also offers an Unlimited Cash Rewards card. Everything works the same as the Travel Rewards card except that the rewards are given in cash and it has a 3% foreign transaction fee. The foreign transaction fee doesn’t matter much when you don’t travel.

Travel or Eat Out a lot?

If you travel or eat out a lot, Bank of America also offers a Premium Rewards card that has an annual fee but gives higher rewards on travel and dining charges.

You’ll get more from the Premium Rewards card to offset the annual fee if you pay airline baggage fees or charge a good amount for travel and dining.

Pick One

The Travel Rewards card and its two sister cards work similarly. Which one works the best comes down to how much you travel and eat out.

• No travel or eat out => Unlimited Cash Rewards card
• Some travel and eat out => Travel Rewards card
• More travel and eat out => Premium Rewards card

Autopay Full Balance

It’s not obvious how you set up for automatically paying the full balance every month on Bank of America credit cards. Please follow the steps in Set Up Autopay On Bank of America Credit Card.

Free Credit Score

Bank of America offers monthly free FICO credit scores from TransUnion if you have a credit card from them.

***

I use the Bank of America Travel Rewards card for pretty much everything. It works to its full potential when you also have Merrill Edge and Bank of America accounts and you make it to the Platinum Honor tier in the Preferred Rewards program.

I like this card because it’s dead simple. There are no special categories to track and no confusing point transfers. I naturally have some travel and dining charges to redeem rewards against when I charge pretty much everything to this card. If you don’t travel or eat out much or if you travel and eat out a lot, a sister card from the same bank works better.

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