Is the Bank of America Premium Rewards Card truly worth the $95 annual fee?

The Bank of America®️ Premium Rewards®️ credit card has the potential to be one of the most rewarding cash-back cards available, but it comes with specific qualification criteria and an annual fee. Let’s examine the benefits of this card to help you determine if the $95 membership fee is justified.

Earning potential of the Bank of America Premium Rewards Card

The amount of assets you hold with Bank of America and Merrill will influence how much cash back the BofA Premium Rewards card can generate. This card is linked to the Bank of America Preferred Rewards Program, so it’s essential to understand the tiers and structure of that rewards system. Depending on your Preferred Rewards tier (which requires separate enrollment), the Premium Rewards Card will earn the following points:

Each point equals 1 cent in cash back, redeemable in your Bank of America deposit account or Merrill Lynch or 529 college savings account. You can use points for travel expenses or gift cards, but I suggest sticking to cash back. With the basic rewards framework in mind, let’s delve into all the card benefits and assess which might justify the annual fee and which could make the $95 cost harder to rationalize.

What benefits justify the $95 annual fee?

Welcome bonus

This card grants you 60,000 bonus points after you spend $4,000 within the first 90 days of opening your account. This translates to $600 that can be deposited into your checking, savings, or investment account. It’s a straightforward decision to pay $95 to gain $600, provided you have a feasible plan to meet the spending threshold. Note that this bonus is only available in the first year of card membership, and you will still need to pay the $95 annual fee thereafter.

Airline fee reimbursement

You can also receive an annual airline credit of up to $100 to help cover expenses like seat upgrades, baggage fees, in-flight services, and lounge access. However, airfare itself does not qualify for reimbursement, although purchasing a seat upgrade may qualify, depending on the airline.

You receive this credit each year, and if you fully utilize it, you’re effectively earning $5 annually just for being a cardholder. Even without any additional benefits listed here, you’re already ahead if you can make the most of the credit.

Rewards for Platinum and Platinum Honors Preferred Rewards Members

If you maintain an average daily balance of at least $50,000 across your Bank of America and Merrill accounts for three months, you qualify for the Platinum tier in Preferred Rewards, which is crucial for elevating your baseline rewards earnings beyond the 2% cash-back threshold.

Several cards, such as the Citi Double Cash® Card (1% back on purchases plus 1% when you pay; see rates and fees) and the Fidelity Rewards Visa card, can offer 2% cash back on all purchases. Therefore, achieving at least Platinum status elevates the Premium Rewards Card above most competitors.

The details for the Fidelity Rewards Visa Card have been independently gathered by Dinogo. The information on this page has not been reviewed or provided by the card issuer.

Once you achieve Platinum Honors status, earned by maintaining an average daily balance of over $100,000 for three months, your base cash back increases to % on travel and dining, and 2.625% on all other purchases. This is quite significant compared to many competitor cards, which often lack the additional benefits outlined here. While earning transferable points can frequently yield higher value, cash-back rewards are essential to cover travel expenses that those points cannot alleviate.

TSA PreCheck/Global Entry reimbursement

Cardholders will receive up to $100 in Global Entry credit every four years, which can be applied toward the enrollment fee for Global Entry or TSA PreCheck. If you haven't enrolled in Global Entry yet, this card effectively gives you $5 to sign up or renew your membership once every four years.

Which benefits may not justify the $95 annual fee?

Redundant benefits

If you already have other premium rewards cards, some benefits of the BofA Premium Rewards card might overlap or be less appealing.

Many cards also provide Global Entry credits, which you typically only need to use once every four to five years. If you possess an American Express, Citi, or Chase card that earns those point currencies, you likely already enjoy many travel benefits, often with greater protection.

Rewards for Regular and Gold Tier Preferred Rewards members

If you have no tier or only Gold tier status in the Preferred Rewards Program, your base cash back falls below 2%. As mentioned earlier, other cards can yield more cash back, even without an annual fee, such as the Citi Double Cash Card.

Secondary rental car insurance

This collision damage waiver (CDW) coverage activates only after your personal insurance reaches its maximum limit. Consequently, the secondary coverage may not hold much value and pales in comparison to the primary coverage offered by the Chase Sapphire Preferred® Card and Chase Sapphire Reserve®.

In summary

If you meet the criteria for the Platinum or Platinum Honors tiers in the Preferred Rewards program, you should definitely consider applying for the Bank of America Premium Rewards credit card. Earning up to 2.625% cash back on most purchases and up to % on travel and dining is impressive. This level of cash back can significantly enhance your transferable points earnings and offset travel expenses.

Even without elite Preferred Rewards status, the 60,000-point bonus (valued at $600) along with the $100 annual airline incidental fee means that the card effectively pays you just to keep it.