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 credit card to the Preferred Rewards program.
On its own feet, this card isn’t that special. It gives 1.5% rewards on every purchase with no specific categories or caps. 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.
75% Bonus from Preferred Rewards
When you enroll in the Preferred Rewards program, you get a boost in the credit card rewards. $100k in assets at Merrill Edge puts you at the Platinum Honor tier, which gives you a 75% bonus on the credit card rewards. 1.5% rewards on everything then becomes 2.625% rewards on everything.
For example, $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.
![](https://lh3.googleusercontent.com/-5OpedabO1kQ/VF_0hDKT6SI/AAAAAAAABd8/E6xWbMDftPE/s800/bofa-bonus-rewards.png)
This Bank of America card with 75% bonus gives more rewards than other 2%-rewards card such as Fidelity Visa and Citi Double Cash card.
Hold ETFs at Merrill Edge
The best way to qualify for the Platinum Honor tier in Preferred Rewards is by transferring $100,000 worth of assets to Merrill Edge. The $100,000 doesn’t have to sit in cash. It can be an IRA or brokerage account holding stocks, mutual funds, or ETFs.
You don’t have to trade in the Merrill Edge account if you prefer to use a different broker. Just holding $100,000 worth of an S&P 500 ETF and setting up automatic reinvestment of dividends will do. Merrill Edge doesn’t charge any maintenance fee.
Redeem Against Travel Charges
Like some other travel cards, the reward points are worth the most when you redeem against past travel charges (100 points = $1). As long as you put travel expenses on this card once in a while, you should be able to redeem the points easily.
You get the best redemption rate when you redeem the points against travel charges. These charges all counted as travel in my account:
- Airlines (both tickets and baggage fees)
- Hotels
- Airbnb
- Car rentals
- Uber
- Public transit
- Ski passes and lunch at ski resorts
The minimum number of points for redemption is 2,500 points (earned by spending $952 at 2.625%). You have one year from the time of the travel 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.
Premium Rewards Card
Bank of America also offers a Premium Rewards card that’s similar to the Travel Rewards card.
Travel Rewards | Premium Rewards | |
---|---|---|
Annual Fee | None | $95 |
Airline incidental statement credit | None | up to $100/year |
TSA PreCheck or Global Entry fee credit | None | up to $100 every 4 years |
Rewards on travel charges | 1.5% base 2.625% with 75% bonus |
2% base 3.5% with 75% bonus |
Rewards on everything else | 1.5% base 2.625% with 75% bonus |
1.5% base 2.625% with 75% bonus |
Redeem rewards | Against travel charges in the last 12 months | Receive as cash |
If you pay airline baggage fees or charge a good amount for travel, the statement credit and the higher rewards on travel charges can make it worth it to pay the annual fee on the Premium Rewards card.
Auto Pay 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.
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I use the Travel Rewards card from Bank of America as my primary card. 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.
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