Update February 2021: The Bank of America Travel Rewards Credit Card has expanded the eligible categories of spending against which you can get their 1.5% to 2.62% back from only Travel purchases to include both Travel and Dining (including takeout). This change will apply indefinitely, and should make it much easier to redeem your points for optimal value. Here is the fine print:
Flexibility to redeem points for a statement credit to pay for travel and dining purchases, such as flights, hotel stays, vacation rentals, baggage fees, and also at restaurants – including takeout.
Full card review:
The Bank of America Travel Rewards Credit Card is the main “travel rewards” credit card branded by Bank of America. In this review, I’ll cover the card features but also focus on a lesser-known opportunity – if you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. For such “relationship” customers, the bonus can change this card from good to great, making it my current base rewards card (after any bonus 5% cash back categories, sign-up bonus cards, etc). Read on for details.
Here are the highlights of this card:
- Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don’t expire.
- 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days – that can be a $250 statement credit toward travel/dining purchases.
- Redeem points for a statement credit to pay for travel and dining purchases, such as flights, hotel stays, vacation rentals, baggage fees, and also at restaurants – including takeout.
- 0% Introductory APR offer. See link for details.
- 10% customer bonus when you have an active Bank of America checking or savings account.
- If you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. See details below.
- No foreign transaction fee.
- No annual fee.
Preferred Rewards bonus. The Preferred Rewards program is designed to rewards clients with multiple account and higher assets located at Bank of America banking, Merrill Edge online brokerage, and Merrill Lynch investment accounts. Here is a partial table taken from their comparison chart (click to enlarge):
Let’s consider the options. Bank of America’s interest rates on cash accounts tend to be lower than highest-available outside banks (read: nearly zero), so moving cash over to qualify may result in earning less interest on your cash deposits. Merrill Lynch advisory accounts also usually come with management fees. The sweet spot is therefore the Merrill Edge self-directed brokerage, where you can move over your existing brokerage assets like stocks, mutual funds, and ETFs held elsewhere (Vanguard, Fidelity, Schwab, etc).
In the past, moving over to Merrill Edge at the Platinum and Platinum Plus levels also led to 30 to 100 free online stock trades every month. Fast forward to now, and nearly all major online brokers offer commission-free trades anyway.
Personally, I moved over $100k of brokerage assets from Vanguard to Merrill Edge to qualify for Platinum Honors. You should ask Merrill Edge if they will cover any ACAT transfer fees involved. I realize not everyone will have this level of assets to move around, but if you do then it is worth considering. Keep in mind that it will take a while for your “3-month average combined balance” to reach the $100k level and officially qualify for Platinum Honors. You might become Gold first, then Platinum, and so on. After that, the 25%-75% rewards bonus on credit card rewards kick in. Once you reach a certain tier, BofA guarantees that you will stay there for a year no matter what, even if your balance fluctuates.
Note that the terms state “The Preferred Rewards bonus will replace the customer bonus”, which means that you will lose the 10% customer bonus when you qualify for the 25% to 50% bonus.
Cash Back Rewards Tiers for Preferred Rewards
This card has a relatively simple rewards structure; you earn 1.5 points per dollar spent on all purchases. 1 point = 1 cent statement credit against any travel or dining purchase made on the card (flights, hotels, vacation packages, cruises, rental cars, or baggage fees, restaurants, take-out). As long you as you travel or eat at restaurants at least occasionally, I feel it is okay to value them at 1 cent per point, which means you could call this a “1.5% back on all purchases, if applied towards travel and dining purchases” rewards card. Here’s how the bonuses then work out:
- Platinum Honors: 2.625% back, if applied towards travel and dining, or 2.625 points per dollar spent on any purchase (75% bonus).
- Platinum: 2.25% back, if applied towards travel and dining, or 2.25 points per dollar spent on any purchase (50% bonus).
- Gold: 1.875% back, if applied towards travel and dining, or 1.875 points per dollar spent on any purchase (25% bonus).
For more details, here are my redemption tips and experiences on qualifying for and receiving 2.625% back towards travel.
Their plan is working because Bank of America has managed to convince me to go from only having a checking account with them to now also having a Merrill Edge brokerage account and a Bank of America credit card. I definitely realize not everyone will have this level of assets to move around, and so this is somewhat a restricted offer. But if you do then it is worth considering. Both Platinum and Platinum Honors levels allow you to reach tiers that effectively give you over 2% back on all purchases, with the important caveat that your rewards must offset previous travel purchases on the card.
Bottom line. If you are able and willing to keep enough brokerage assets ($50k/$100k) at Merrill Edge, it will qualify you for their Preferred Rewards program. By using investment assets and not cash balances, it won’t cost you any potential interest from elsewhere. This allows the Bank of America Travel Rewards Credit Card to earn up to 2.6% back on ALL purchases in the form of statement credit offsetting any travel purchases within the last 12 months.
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How do you like Merrill Edge? Did they refund transfer fees?
The transfer went smoothly, it helped that I was basically assigned a single contact person for the on-boarding / asset transfer. I believe that Merrill Edge will reimburse your transfer fees with any transfer of $25k or greater, but I can’t seem to find the link right now. (+Bonus mentioned above.) I didn’t have to pay any fees anyway because it was only a partial transfer of assets and not the entire account. Many brokerages charge $0 for partial transfer, although of course you’d want to check to make sure.
(Actually, I just checked and Vanguard doesn’t charge a fee even for a full outgoing transfer. That’s nice of Vanguard. Most places do.)
Merrill Edge is fine so far. Interface is similar to other discount brokerages a la TradeKing, TD Ameritrade. If you have Bank of America checking accounts, it is nice that you can also see your ML Edge account info and your BofA credit card balance all with the single checking account login.
So how much do they charge to keep an ETF account? I like Vanguard because it’s free and straightforward, and I just invest into VT and VTIP and just rebalnce it once a year (during a randomly predetermined day).
Unless you’re a day trader I don’t see why anyone would need to trade 30 times, moreover 100 times a month, so this is kind of useless benefit. But of course I drank John Boggles’ Kool Aid so maybe other people nervously trade their ETFs back and forward each day or week.
No annual account fee. No minimum balance requirement. No annual custodial fee for IRAs. Partial outgoing transfer is free. There is a $49.95 fee for full outgoing transfers for taxable accounts, also a $49.95 for outgoing/closing out an IRA. Here’s a link to their account fee page:
https://www.merrilledge.com/pricing#tab2
I don’t plan to make very many trades either.
Trying to get out of Wells Fargo accounts with a $95 transfer and $95 closure fee makes this something to consider before opening new accounts. Fortunately, Merrill says they are going to reimburse me for the Wells Fargo fees. I currently have two accounts each for traditional and Roth IRA accounts (plus a taxable) so I’m now going to consolidate these to have fewer accounts to pay fees for if I end up moving the accounts one day. I had them separated for purposes of tracking the contributions basis so that I know how much I could withdraw before retirement age (for Roth) if necessary but I suppose I can just add them together?
Are brokers not responsible for reporting/maintaining contributions & conversions (for Roth) as well as after-tax contributions (for traditional IRAs)? Is that info provided along with individual security cost basis when transferred to a new custodian? If not, it could be costly to unnecessarily pay tax (again) on after-tax contributions (to a tIRA) upon withdrawal if you don’t have records to back it up. Would your tax return from the contribution year suffice? If so, we should probably keep ALL tax returns and not just 7 years.
This topic alone might be worthy of a post?
I have this combination and it works great.
Two further points to make:
1. There is a “up to $1000” bonus promotion for Merrill Edge (until 12/15/15)
https://www.merrilledge.com/offers/1000offer
2. If you don’t travel much, you can move the rewards from the Travel Rewards card to the FIA/Fidelity AmEx card and then redeem it for cash into a Fido account.
Good to know! Thanks for the offer link, I will update the post.
Jonathan, I’ve had a terrible last few months with Merrill Edge, thought I’d share my experience:
I signed up with the “ME600” promotion currently going on the website, so I should have received $250 after 90 days with a $100K balance.
I transferred in 100K of stock, which matured to 166K. I sold it and withdrew 66K to leave a solid $100K in the account. In 91ish days I only got $100. I emailed my customer specialist (more on that in a minute) and after talking to the internal group, the reason was that the algorithm calculated $100K in and $66K out, leaving $34K even though I had a $100K balance.
Well this was the final insult to injury of a long litany of issues with Merrill Edge. In the first place transferring my stocks was a multi-week process of talking to so many agents and issues (I can’t recount all the issues but a fundamental issue was that my ME account was a joint-account and the account I was transferring from was an individual account). It was so bad that I got my own personal customer support person to deal with me and cut through all the red tape and misinformation from the front line agents.
Over the course of the 3 months there was virtually nothing I could do on my own using the online banking system. I needed to contact my specialist to do even the most minor things. For example, adding an external account (wouldn’t work!). Even transferring the 66K wouldn’t work because it was over some arbitrary transfer limit of 20K (which the phone agent had at one point told me was 100K limit).
Finally, going back to the bonus I was assured multiple times on the phone before the 90 days were up that I would get the $250 bonus. Nobody told me otherwise. The customer experience was the worst (bar none) of the dozens of banks/credit cards/mortgages/loans/etc. I have signed up for in the last 15 years. The only thing I can do about it is post about it here and other blogs!
I’m sorry to hear of your troubles. I hope that Merrill/BofA sees this and address the source of the problems. I actually had the opposite experience and found my rep with Merrill Edge to be more responsive than other brokerages. It may have been the specific person, but I made multiple transfers in and they worked out fine. I did have some trouble transferring out, mostly just because they required a medallion signature guarantee (which Vanguard never required when transferring away from them, to their credit).
Great combo, been using for a year now. Also their cash back card is worth a look for gas/groceries combined with plat honors.
Maybe I did not understand the offer clearly but is the advantage a maximum of 2.65% if redeemed for travel and lower if non-travel?
Citi Double and Fidelity Amex gives standard 2% so if I don’t travel a lot would this still be a good deal?
You’d just need to have enough travel purchases on the card to offset your rewards balance. If you spend $10,000 in a year, 2.65% would be $265 in rewards if applied toward travel. 2% of $10,000 would be $200. 2.65% is technically then over a 30% improvement in rewards.
In a couple of days, I’ll have my review up for an a different BofA rewards card which offers straight cash back and also participates in the Preferred Rewards program.
My main question / concern when transfering brokerage assets is whether cost basis and dividend reinvestment histories transfer correctly from the previous firm? I’ve run into this issue before which makes me reluctant to chase offers unless it’s a retirement account,
Cost basis history was one of my concerns as well. I can confirm that all my tax lots transferred over to Merrill Edge correctly, even when I bought as little as one single share.
My feeling is that after the recent tax law changes requires that brokers track cost basis for you, the back-ends of all brokerage firms are much better at this *if* they already have your cost basis on file. If you bought in 1967 and the tax lots don’t show up online at your original brokerage, I’d be wary. Here’s a quote from NYT regarding the new-ish cost basis laws:
http://www.nytimes.com/2013/03/16/your-money/new-tax-laws-cover-cost-basis-of-investments.html?_r=0
I have a standard BoA rewards card that offers 1% on purchases, 2% on groceries, and 3% on gas (up to $1500 of those purchases per quarter). I get the Platinum Honors 75% bonus each month on my total rewards earned for a statement period. I then redeem those cash rewards into a BoA savings account. I’ve done the math and am 95% certain I get another 10% bonus on the already-augmented rewards amount each month because I redeem into that BoA account. In other words, I am fairly certain they automatically stack the 75% Platinum bonus with the 10% redeem-into-a-BoA-account bonus and I benefit from both. That may not be the case with this card, but if I signed up for this card I would expect it to be the same.
YMMV.
Do you still like it Jonathan
Yes, this card gives me an effective 2.625% back on everything and is thus my primary card, although I may put spending towards a sign-up bonus and/or a bonus category instead like 5% rotating or 3% towards restaurants.
I am planning to move most of my accounts from Wells Fargo to Merrill, but will leave $100 balance in each IRA account and $1 in taxable accounts there otherwise I’ll be charged $95. I’ll also leave enough of a total balance ($50k; it would be only $25k if I left an IRA account) in a joint account with WF to still qualify for Portfolio (aka PMA) status only because I don’t want to move all 6 of my accounts and pay $95 each for closing them. I’m not sure how I’ll ever get that money out of WF long term except to hope that they get acquired one day and this allows customers to transfer and close for free but I don’t know if that even happens. Or should I see if Merrill will cover the fees and be done with WF? How do I get someone to confirm that they’ll do this? I tried via online chat but couldn’t get anything definitive.
As for ME & BOA, I’m planning to open the brokerage accounts first, wait until I have established Platinum Hours in 3 months and then apply for the Travel Rewards credit card so that even my early spend gets the higher point bonus. Does it work that way?
Jonathan – are either of your links referrals (ME or BOA)? If so, I’ll make sure to use them when I open the accounts.
Thanks for the thought, but I don’t have referral links for either Bank of America credit cards or Merrill Edge at this time. I think you have it right regarding the bonus structure.
If you transfer enough money over, I think Merrill Edge may cover your transfer fees or even set you up with a custom bonus. I was able to transfer an additional amount over a second time, and get another bonus. I would call over the phone and find someone, I feel like they have reps who get paid for gathering assets. The number I have for Edge is 1.877.653.4732.
Why go through so much hassle?
Citi double cash credit card gives 2% unlimited without restrictions on redemptions
Just depends on your spending and how much work it would be to switch to BofA. If you spend $25,000 a year, 0.62% extra is $155 per year. Since it doesn’t take any ongoing work after setup, after 5 years that is $775.
Previously, Merrill Edge also gave you free trades when the other guys were $7 to $15 a trade. Edge has pretty good customer service as well, much better than the super discount brokers like Robinhood.
Great review. I personally prefer the Premium Rewards card that nets me 3.5% on travel/dining and 2.625% on everything else (with Platinum Honors). The reward automatically gets transferred to my checking account each month without having to allocate it to travel expenses (although that step may be simple).
It does have a $95 annual fee but has a $500 bonus offer and refunds up to $100/yr in airline incidentals like seat upgrades and baggage fees, so it could pay for itself. It also pays for your Global Entry ($100 once every four years.)
After switching my investments to Merrill, this became my go-to card for all my everyday spending.
https://www.bankofamerica.com/credit-cards/products/premium-rewards-credit-card/?campaign=4042268~VA~en_US
That is a good card too. I personally prefer not to worry about using up the incidental airline fee credit each year.
Thank you for the update. I am considering applying for the cash rewards card in order to use it for online purchases. Can you shed some light on what counts as online purchases? Does paying electricity bill or health insurance premiums online count as online purchases and get 5.25% cashback? Or do these get 1.75% cashback?