If you haven’t noticed, the so-called luxury credit card scene is getting pretty busy.
We even saw American Express retool their longstanding luxury offering by upping the annual fee to $550 on its flagship Platinum card.
Now there’s news that Bank of America wants a piece of the luxury credit card market too and will be releasing a similar card later this year.
The Bank of America Premium Rewards Credit Card
According to a “reliable source” who got in contact with DoC, the new card will be called the “Bank of America Premium Rewards credit card.”
They currently have a “Cash Rewards” credit card, so the name kind of makes sense in that it’s to the point without any catchy buzz words.
Anyway, the card will come with a 50,000-point sign-up bonus for spending $3,000, which is pretty high for Bank of America, which tends to only give away $150-$200 tops.
Ostensibly, those 50k points would be worth $500 if redeemed for cash or gift cards, and perhaps even more if redeemed for travel.
It’s unclear if they would allow points transfers to airlines and hotels, though it seems more doubtful than it is plausible.
Aside from the big opening bonus, cardholders would also be treated to 1.5 points per dollar on all purchases, aligning it with the likes of Chase Freedom Unlimited and Capital One’s Quicksilver.
The difference is that the Bank of America Premium Rewards card would have a 2X category as well, for travel and dining. It’s a broad category, and arguably one consumers use a lot. So that separates it from the crowd somewhat.
Bank of America’s Banking Customers Get Even Bigger Credit Card Rewards
Assuming cardmembers couple it with the bank’s “Preferred Rewards” program, the points can go even further. Here’s where it gets interesting.
- For those with $20,000 to $50,000 in Bank of America deposits, they’ll earn 2.5 points per dollar on travel and dining and 1.875 points on all other eligible purchases
- For those with $50,000 and $100,000 in BofA deposits, they’ll earn 3 points on travel and dining and 2.25 points on all other eligible purchases
- For those with more than $100,000 in BofA deposits, they’ll earn 3.5 points on travel and dining and 2.6 points on all other eligible purchases
The big problem here is that the bank probably pays a minuscule yield on deposits, so you’re giving up a lot of interest in exchange for slightly higher credit card rewards.
Whether that’s worth it is the big question. One could argue to keep your money at a bank where it earns the most money and use a credit card that earns solid rewards, even if they aren’t quite as high as this offering.
This is especially true if you can get more out of the points by transferring them out to loyalty partners where the points are worth a lot more than a penny apiece.
What Else Might the new BofA Card Offer?
Expectations call for some sort of travel credit, similar to Amex Platinum and Chase Sapphire Reserve, along with a credit for TSA Pre or Global Entry.
In a sense, that means the new card would be a sort of Sapphire Reserve and Freedom Unlimited hybrid, though lacking the very important Ultimate Rewards program.
However, those watching this card expect the annual fee to be a lot lower than the competition, perhaps no more than $100 per year, compared to $450 for CSR and $550 for the revamped Amex Platinum.
We now know the annual fee on the Bank of America Premium Rewards credit card will be just $95, the same as Chase Sapphire Preferred.
So Bank of America will surely win a lot of new customers scared off by those sky-high annual fees, but it might also challenge the profitability of the card.
Giving away $500 or more in value and charging less than $100 doesn’t sound like a good deal for the bank. But they wouldn’t be the first ones to do it.
Heck, the Chase Ink Preferred comes with $800+ in value for a $95 annual fee.
While the forthcoming luxury card from Bank of America may not be earth-shattering, it could be an easy target to earn a nice sign-up bonus.
And because it’s not a Chase card, those over 5/24 will be able to apply, which is handy for those running out of good options.
I’d probably bite if it were 50k points and I could just cash them out for $500 or so seeing that credit card rewards aren’t taxable.
Bank of America has a $300 checking account bonus too, but with it being taxed it’s kind of not worth all the effort.
Stay tuned for more on this one…