Bank Of America’s No Annual Fee Card Pays 6% In Year One — Here’s The Best Way To Use It

The Bank of America® Customized Cash Rewards credit card pays 6% back in a category you choose during your first year, with no annual fee. That can include online shopping, phone and internet bills, or home repairs. Bank of America® Customized Cash Rewards‘ initial bonus offer is a $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening. I like finding worthwhile cards outside the familiar bank discussions. More competition is good, and a card can deserve some of your spending without replacing everything else in your wallet. What The Card Currently Offers The standard consumer card has: No annual fee. A $200 initial bonus after $1,000 in purchases within 90 days of account opening. 6% in your selected category during the first year: the normal 3% plus a temporary extra 3%. 2% at grocery stores and wholesale clubs. 1% on other purchases. The higher rates all share a $2,500 quarterly spending allowance; once you’ve used it, those purchases earn 1% too. Banking relationship bonuses can increase earning. For the choice earning category, you can select among gas and electric vehicle charging; online shopping, including cable, internet, phone plans and streaming; dining; travel; drug stores and pharmacies; or home improvement and furnishings. You can change your category once each calendar month for future purchases. Leave it alone and your selection carries forward. It starts out as gas and charging, so someone getting the card for online shopping needs to change that setting. Earning scales with BofA Rewards based on qualifying funds with the bank: Relationship Tier And Qualifying Balance Choice Category, First Year Choice Category, Afterward Groceries And Wholesale Clubs Other Spending / After Cap Not enrolled 6% 3% 2% 1% Member: no minimum balance 6.3% 3.3% 2.2% 1.1% Preferred Plus: $30,000+ 6.75% 3.75% 2.5% 1.25% Preferred Honors: $100,000+ 7.5% 4.5% 3% 1.5% Premier: $1 million+ 8.25% 5.25% 3.5% 1.75% The first three rewards columns remain subject to the shared quarterly spending limit. The banking program requires enrollment and an eligible personal checking account. Higher tiers generally use your combined qualifying average balances over three months. The relationship bonuses are 10%, 25%, 50% and 75%. They apply to the normal earnings, while the extra 3% first-year bonus isn’t multiplied. (At the highest tier the calculation is 3% × 1.75 + 3% = 8.25%, not 10.5%). Qualifying Merrill investments, including eligible retirement accounts, count toward the balance requirement. You don’t have to leave $100,000 sitting in a checking account. Online Shopping And Home Improvement Are My Preferred Categories For someone who already has good travel cards, I’d look first at purchases those cards don’t bonus. Online shopping would be my default selection. Bank of America’s category definitions include purchases through websites and apps, plus cable, internet, phone plans and streaming. Merchant examples include Amazon, Walmart, Etsy and Ticketmaster. That covers purchases across different merchants with one selection, and you can combine eligible shopping portal rewards with the cash back from paying by card. Online shopping has exclusions: taxes, insurance, medical bills, tuition, utilities and various non-retail services don’t become bonus purchases by paying on the website. Home improvement and furnishings. The bank includes qualifying contractors such as plumbers and electricians, alongside furniture and hardware stores. I’d keep online shopping selected most of the time and switch before paying for a repair or furniture purchase. Travel is useful, especially in the first year. The bank includes airlines and hotels, but also cruises, vacation rentals, attractions, transit and parking. You can book directly rather than going through a bank’s travel portal. That makes it worth considering for a domestic vacation rental or cruise payment. I earn well with other cards on airfare and hotels, but bonusing short-term rentals and cruises can fill a gap. How I’d Fit It Into A Travel Rewards Wallet I’d rate this 4 out of 5 as a spending category specialist for someone who can use the first-year offer or who qualifies for elevated banking rewards. It’s best for someone with online purchases or home improvement bills that otherwise earn an ordinary return. The standard card charges a 3% foreign transaction fee. This is for domestic purchases. And even the highest relationship tier pays just 1.75% on ordinary spending and after the cap, less than a straightforward 2% card. You can redeem cash back for statement credits without a minimum, or deposit it into eligible Bank of America or Merrill accounts. Checks, qualifying Merrill 529 contributions and automatic redemptions have $25 minimums. Rewards don’t expire while the account remains open. I’d take the cash. It can pay award ticket taxes, a hotel outside a chain, or anything else. Bank of America® Customized Cash Rewards credit card Topics on this page