In An Era Of Mileage Devaluations, Should You Invest In Bank of America Preferred Rewards For 2.625% Or More Cash Back Everywhere?

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There was a time when redeeming miles meant it was easy to get a value of 2 or even 10 cents of value per mile.

While it’s still possible to get outsized values, miles are certainly less valuable than they used to be when US airlines all had published award charts.

You can still get excellent values thanks to earning more than 1 point per dollar, for example the Ink Business Unlimited® Credit Card earns 1.5 points per dollar, The Blue Business® Plus Credit Card from American Express earns 2 points per dollar on $50K of annual spending, or the Capital One Venture Rewards Credit Card, Capital One Venture X, or Capital One Venture X Business Card which earn 2 points per dollar everywhere.

But, if you want cash back, it can be worth looking into the Bank of America Preferred Rewards program.

If you have combined balances in Bank of America deposit accounts or Merrill investment accounts for a 3-month average of $20K you earn Gold, $50K earns Platinum, and $100K earns Platinum honors.

You can move over stocks, 529 accounts, retirement accounts, mutual funds, bonds, IRAs, 401Ks, ETFs, money market funds, etc. from other banks to meet those tiers. If you open a new account and bring those funds to Bank of America, you can request to be upgraded immediately, or it should be applied to your account automatically within several days.

Among a plethora of banking benefits and perks, Gold earns 25% bonus credit card rewards, Platinum earns 50% bonus credit card rewards, Platinum Honors earns 75% bonus credit card rewards.

Once you meet the 3 month average balance for a tier, you will keep that tier for a full year, and after the year there is a 3 month grace period to meet the 3-month average balance once again.

Sample cards and increased rewards:

• If you use the Bank of America® Unlimited Cash Rewards credit card, you’ll earn 1.5% cash back everywhere. But if you have Gold tier status you’ll earn 1.87% cash back everywhere, if you have Platinum tier status you’ll earn 2.25% cash back everywhere, and if you have Platinum Honors tier status you’ll earn 2.625% cash back everywhere. This card has no annual fee.
• If you use the Bank of America® Customized Cash Rewards credit card, you’ll earn 3% cash back in the category of your choice: gas and EV charging stations, online shopping/cable/internet/phone plans/streaming, dining, travel, drug stores/pharmacies, or home improvement/furnishings. If you have Gold tier status you’ll earn 3.75% cash back, if you have Platinum tier status you’ll earn 4.5% cash back, and if you have Platinum Honors tier status you’ll earn 5.25% cash back. You’ll also earn 2% cash back at grocery stores and wholesale clubs. If you have Gold tier status you’ll earn 2.5% cash back, if you have Platinum tier status you’ll earn 3% cash back, and if you have Platinum Honors tier status you’ll earn 3.5% cash back. Earn 3% and 2% cash back on the first $2,500 in combined purchases each quarter in the choice category, and at grocery stores and wholesale clubs, then earn unlimited 1% thereafter. This card has no annual fee.
• If you use the Bank of America® Travel Rewards credit card, you’ll earn 1.5 points per dollar to use for travel and dining. But if you have Gold tier status you’ll earn 1.87 points per dollar everywhere, if you have Platinum tier status you’ll earn 2.25% points per dollar everywhere, and if you have Platinum Honors tier status you’ll earn 2.625 points per dollar everywhere. This card has no annual fee.
• If you use the Bank of America® Premium Rewards® credit card, you’ll earn 2 points per dollar spent on traveling and dining to use for travel and dining. But if you have Gold tier status you’ll earn 2.5 points per dollar, if you have Platinum tier status you’ll earn 3 points per dollar, and if you have Platinum Honors tier status you’ll earn 3.5 points per dollar on travel and dining. Points can be converted to cash at 1 cent per point deposited into your Bank of America account. This card has a $99 annual fee, but also earns a $100 annual airline fee credit and Global Entry/PreCheck fee reimbursement.

Do you use this strategy to maximize your cash back instead of mileage earnings?