Believe it or not, I’m surprisingly loyal to Bank of America, with each of my primary checking, brokerage, and credit card accounts. This loyalty is in strong part due to the value they have given me back for the past ten years through perks and bonuses for having large amounts of money parked in their products. The 75% bonus on credit card rewards yields 2.625% on all spend, and 5.25% on select categories.
All good things must come to an end. The end here is near, with major changes announced for their loyalty program that meaningfully devalue earn, and are going to see me move likely all my primary relationships elsewhere.
The existing rewards program “Preferred Rewards”
While there are a range of tangential bonuses, I’ll focus only on the credit card relevant ones. For holding assets (checking, savings, investment, retirement) in Bank of America accounts, customers see enhanced earn rate on cards. This is tiered by the balances held.
- Gold | $20k – $50k balances | 25% bonus on earn rate
- Platinum | $50-100k balances | 50% bonus on earn rate
- Platinum Honors + | $100k+ balances | 75% bonus on earn rate
These are big increases from what is available to the typical credit card customer. These turn products that are fine, into what I argue is best-in-class value.
- Gold | 1.5x everywhere card becomes 1.875x everywhere | 3% category card becomes 3.75% category
- Platinum | 1.5x ->2.25x | 3% -> 4.5%
- Platinum Honors | 1.5x ->2.625x| 3% -> 5.25%
The updated rewards program “Rewards” (press release here)
At least they got the name right, no more “Preferred” component. A downgrade across the board, substantially elevating the requirements to secure the respective bonuses, but still marketing the same headline figures.
They added new benefits ($8-15/month of subscription services), and to fund it substantially elevated the tiers required to meet these threshold. The new “member” tier gives 10% bonus to everyone, but they’re bumping the requirements for 50% bonus from $50k to $100k, and for 75% bonus from $100k to $1M. A lot of folks with lower balances will benefit (although I would argue other cards are generally better than any BofA card with only 10% earn). Almost everyone with higher balances will lose, as the thresholds rise so substantially.
- Member | $0-$30k balances | 10% bonus on earn rate
- Preferred Plus | $30k-$100k balances | 25% bonus on earn rate
- Preferred Honors | $100k-$1M balances | 50% bonus on earn rate
- Premier | $1M+ balances | 75% bonus on earn rate
My take
Good strategy for appealing to the masses, bad strategy for retaining the most loyal customers. 1000% increase in balances ($100k to $1M) means I will be unable to retain 75% earn enhancement. I’ll be moving my primary card, and likely brokerage, elsewhere, once changes go live in May timeframe. I’ll thank BofA by signing up for a new card or two and having them reward me accordingly for the hassle.
Post-ending gif
