Bank of America is one of the largest banking entities in the United States, so it makes sense that it is working to become a serious player in the competitive cash back credit card market in 2023.
The card_name lets you choose your own path for earning cash back rewards.
If you sign up for this card, you get to pick one spending category that will earn you 3% cash back for the next month – with newly expanded categories based on Bank of America customer feedback. That is supplemented by some 2% cash back categories that Bank of America chooses for you, and the rest of your purchases earn 1% cash back.
And there is even a chance for some existing Bank of America banking customers to boost their cash back rewards by up to 75%.
But can this card actually earn you more cash back rewards than a card that offers a standard unlimited 2% cash back? That’s one of the questions I’ll try to answer for you in this card review.
I’ve taken a close look at this Bank of America offering to see if it holds up against popular cash back cards like the Citi Double Cash® Card, which is a card you’ll find in money expert Clark Howard’s wallet.
Table of Contents
- What Is the Bank of America® Customized Cash Rewards Card?
- Card Specs and Perks
- Bank of America® Customized Cash Rewards vs. Citi Double Cash® Card
- Final Thoughts
Team Clark has spent time evaluating the credit card market in several categories including the best cash back credit cards. We’ve compared the Bank of America® Customized Cash Rewards to the best cards in this segment of the market. And we’ve determined that it’s a viable choice — thanks to its bonus cash back categories and lack of an annual fee.
As you’re deciding whether this card is a fit for you, please use this review in conjunction with Clark Howard’s 7 Rules for Using Credit Cards.
What Is the Bank of America® Customized Cash Rewards Credit Card?
The card_name is a cash back credit card that does not charge an annual fee.
The hook for this card is that Bank of America allows you to choose one spending category in which you’ll receive 3% cash back, and you can change that category as often as once a month. This comes in addition to 2% cash back earnings in other categories. The rest of your purchases will earn a 1% cash back reward.
This card also has a welcome offer on initial spending.
Bank of America® Customized Cash Rewards: Specs and Perks
Let’s take a look at the fine print to examine some of the card’s perks and drawbacks:
Cash Back Categories
The cash back rewards for this card range from 1% on everyday purchases up to 3% in one category of your choice – with newly expanded categories based on Bank of America customer feedback.
Bank of America offers you the chance to pick between six popular spending categories for your 3% reward. You can change this category each month via the Bank of America app, so if you’re proactive with your budgeting, you could get the most out of the card by changing to the category in which you anticipate spending the most in the next month.
You’ll also get a standard 2% cash back reward on some select categories. But Bank of America gets to choose those.
Here’s how the rewards program is structured as of this writing:
3% cash back rewards category choices:
- Gas (includes Electric Vehicle Charging (EVC) Stations)
- Online shopping (includes Cable, Streaming, Internet and Phone Services)
- Drug stores
- Home improvement and furnishings
2% cash back rewards categories:
- Grocery stores
- Wholesale clubs
Bank of America caps rewards on the 2% and 3% categories to $2,500 in total spending during a three-month period. After that, you’ll earn 1% cash back until the next quarter. And again, all other purchases earn 1% cash back.
“Preferred Rewards” Members Can Enjoy Increased Cash Back Benefits
If you are a member of the Bank of America Preferred Rewards® program, you could see an increase in your bonus opportunities with this card.
This is a program that offers certain customers extra rewards or better rates on a variety of different financial products. And this card is included (enrollment is required).
Here are the minimum requirements for joining the program:
- An active, eligible Bank of America checking account
- A three-month combined average daily balance of $20,000 or more in qualifying Bank of America deposit accounts and/or Merrill investment accounts.
If your account qualifies as Gold ($20,000 minimum balance) in the rewards program, you’ll receive a 25% increase in cash back. Platinum ($50,000 minimum balance) status gets you a 50% increase. And Platinum Honors, which requires a $100,000 minimum balance, offers a 75% increase in cash back rewards.
Bank of America offers this example of how it works: “A $100 purchase that earns 3% ($3.00) will actually earn $3.75, $4.50 or $5.25 based on your tier when the purchase posts to your account.”
I’ll compare how these rates can stack up against other credit card rewards programs later in the article.
More Cardholder Benefits
- Welcome Offer: Bank of America has assigned a fairly easy-to-achieve welcome offer to this card. You can earn $200 in cash back rewards if you spend $1,000 or more within the first 90 days of card membership.
Here’s a quick look at some of the fees you may encounter with the Bank of America® Customized Cash Rewards Card:
- Annual Fee: None
- Balance Transfer Fee: 3% of the amount of each transaction
- Cash Advance Fee: $10 or 3% of the total advance, whichever is greater
- Foreign Transaction Fee: 3% of the U.S. dollar amount of each transaction
- Late Payment Fee: Up to $40
Bank of America® Customized Cash Rewards vs. Citi Double Cash® Card
If you’re considering a cash back credit card, you’re likely looking for a card that’s going to optimize your rewards based on your spending habits.
To help determine if the Bank of America® Customized Cash Rewards Credit Card is actually your best option, I compared this card to the Citi Double Cash Card.
The card_name, which gives unlimited 2% cash back on all purchases (1% when you buy, 1% when you pay for those purchases), is one of money expert Clark Howard’s favorite credit cards. It has no annual fee and no bonus categories, so the math is pretty straightforward on your spending.
The Bank of America® Customized Cash Rewards, on the other hand, is not so easy to nail down for the purposes of a spending comparison. First, you need to estimate your spending on the 3% category. Next, you have to determine if you’re eligible for the Preferred Rewards bonuses based on the amount of money you may have in qualifying accounts at the time of your spending.
For the purposes of this comparison, I’ll set the following parameters:
- Since Bank of America caps cash back rewards bonuses each quarter, the analysis will be based on quarterly spending.
- We’ll assume that spending is done to max out that quarterly bonus in your chosen 3% category plus Bank of America’s assigned 2% categories.
- For simplicity’s sake, we’ll assume that you spend $1,500 ($500 per month) in your chosen 3% category, and then a combined $1,000 in the 2% categories. This will max out your $2,500 in spending eligible for bonuses on the Bank of America card.
Scenario #1: $3000 in Quarterly Spending
If you spend $1,500 in your chosen 3% category, $1,000 in Bank of America’s 2% categories and $500 on everything else, here are the results:
Citi Double Cash: $60 cash back (2%)
Bank of America® Customized Cash Rewards: $70 cash back (effective 2.3%)
Scenario #2: $6000 in Quarterly Spending
If you spend $1,500 in your chosen 3% category, $1,000 in Bank of America’s 2% categories and $3,500 on everything else, here are the results:
Citi Double Cash: $120 cash back (2%)
Bank of America® Customized Cash Rewards: $100 cash back (effective 1.67%)
You can do your own calculations for a spending scenario using Bank of America’s cash back estimating tool.
Are you considering adding the card_name to your wallet? Let’s review some of the major pros and cons of the card before you make your final decision:
|Earn 3% cash back in a category of your choice||Only 1% cash back in many spending categories|
|$200 welcome offer opportunity||Cash back reward bonuses capped at $2,500 in spending per quarter|
|No expiration on rewards and cash rewards don’t expire as long as your account remains open||Must have minimum of $20,000 balance in qualifying accounts to access increased rewards offer|
Bottom Line: If you are an existing Bank of America customer who has access to the bank’s Preferred Rewards program, you may want to inquire about the potential for boosts to the cash back offerings on this credit card.
Otherwise, the offered 3% cash back reward category choice is probably not going to provide enough benefit to make this card better than an unlimited 2% cash back offering. While the ability to change your 3% spending category each month is helpful, it still will take a great deal of budgeting and maybe even some guesswork to ensure you get the most out of it.
Money expert Clark Howard hates banking with big banks, so he would advise against opening a Bank of America account just to get the cash back boost provided by the Preferred Rewards program.
And he also really enjoys the certainty of the rewards structure on his card_name. So if you’re looking to follow his lead, this card is probably a “pass” for most consumers.