Cash Back Strategies – BOA Cash Rewards

BOA Cash Rewards serves as a cornerstone of my cash back strategy. Several perks make this card lucrative to have.

Sign Up Bonus

First, the card comes with a $200 sign up bonus on the first $1,000 of spend, which is a 20% return. Second, the card comes in five different versions. Some versions are Mastercard, while others are Visa.

This can be important. For example, Costco only accepts Visa in store, and the BOA Cash Rewards card has a nice Wholesale Club earning rate. More on that later.

You can get all five versions of the card. BOA has a limit of two cards in two months, three in twelve months and four in 24 months. So it takes 25 months to get all five versions:

  • 1st Month – Two cards
  • 2nd Month – Third card
  • 13th Month – Fourth card
  • 25th Month – Fifth card

Rewards

You might want all five versions because each card comes with a choice of an excellent reward rate in the following categories:

  • Online Shopping
  • Dining
  • Gas
  • Travel
  • Drug Stores
  • Home Improvement/Furnishings

The online shopping category overlaps with some of the other categories, and has become my most used card. For example, ordering food online or paying for travel on Expedia online trigger the rewards.

Each card has a $2500 limit per category per quarter in terms of bonus rewards, although categories can be changed monthly. And what are those rewards? It depends on how much money you have with Bank of America and Merrill Lynch:

  • Less than $20K = 3%
  • $20K to $50K = 3.75%
  • $50K to $100K = 4.5%
  • $100K+ = 5.25%

If you have an old IRA or 401K laying around, you can roll it to a Merrill IRA, link your Merrill account to a BOA checking account, and start earning these elevated rates on your chosen categories! And BOA waives checking account fees when you qualify for these higher earning rates.

In addition, the card offers a base 2% at grocery stores and wholesale clubs that rises to 2.5%, 3% and 3.5% if you meet the threshholds above. I don’t know of any card that offers more than 3.5% back in store at Costco…

Conclusion

BOA Cash Rewards offer individuals to earn rates on spending that blow away all CD savings rate offers. Think about it. If you magically knew you were going to spend $500 at restaurants one year from now and bought a CD with $500 today to save for it, you would earn less interest than by simply paying that bill with your BOA Cash Rewards when it comes due!

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