Anatomy of a credit card: Bank of America BankAmericard Cash Rewards review

My first blog post covers the benefits or credit cards that are often ignored. I have also covered several features of credit cards in a variety of posts. I’ve always wanted to consolidate all these features in one post, and what better way is there than performing a hands-on analysis on a real credit card? Today’s post features Bank of America’s flagship  BankAmericard Cash Rewards.

The card, as posted on Bank of America’s website, has the following features:

I. It is a cash back-type rewards card

(For more information about different types of credit card rewards, please read my previous post )

1. Cashback formula: 2% on groceries and 3% on gas for the first $1,500 in combined gas and grocery purchases each quarter, and 1% on everything else. The bonus categories likely account for the majority of your everyday spending, so they are very useful.
2. Cashback redemption options: statement credit or bank account deposit. If you deposit into a Bank of America’s checking or savings account, you earn a 10% bonus on the amount redeemed. So effectively, the bonus tiers are 3.3%, 2.2%, and 1.1%.
3. Minimum amount for redemption: $25

II. Card benefits:

Finding all information on this is tricky. Amusingly, Bank of America does not fully display the benefits on the official product page. They also do not explain the benefits that are displayed. Fortunately, the Benefit Information Center has all the information you need. To borrow the language from the Center:

1. Purchase Replacement – Purchase Replacement – Within the first ninety days of the date of purchase, Purchase Replacement will replace or repair eligible items of personal property purchased entirely with your eligible card up to a maximum of $500 per claim and $50,000 per year, in the event the item is lost, stolen, or damaged.

This is a very useful benefit – don’t forget about it. If your laptop is water damaged in the first 90 days it may be covered by your card’s insurance even if the manufacture denies warranty!

 2. Purchase Guard – Purchase Guard will double the manufacturer’s original United States (U.S.) warranty period on personal items purchased in full with your eligible card that carry a warranty duration of less than 1 year and extend the manufacturer’s original U.S. warranty period for 1 additional year for Covered Purchases with a warranty duration of 1 to 3 years.

This means warranty extension for your laptop, TV, etc. Also very useful!

 3. Auto Rental Collision Damage Waiver – When certain terms and conditions are met, the Auto Rental Collision Damage Waiver benefit provides at no additional charge reimbursement for damage due to collision or theft up to the actual cash value of most rental vehicles. In your country of residence, this benefit is supplemental to, and excess of, any valid and collectible insurance from any other source.

If you rent cars, you should read up on the coverage in advance. Notice that the coverage is supplemental to any other insurance coverage.

 4. Emergency Travel Assistance – Provides emergency and travel assistance services to eligible card members 24 hours a day, seven days a week. Assistance services range from medical, travel, legal assistance, to embassy and consulate information, currency exchange rates and weather reports.

If you’re stuck on the road with a flat tire and no one to help, call the number on the back of card. They will provide assistance, 24/7!

5. Common Carrier Travel Accident Insurance – Common Carrier Travel Accident Insurance provides accidental death and dismemberment coverage protection while traveling on a common carrier, provided the entire fare is charged to your eligible card. Common Carrier Travel Accident Insurance provides coverage up to $100,000.

I don’t want to imagine this being helpful to me. But you get the point.  

Most credit card users are not aware of benefits such as these, and most credit cards offer all these services at a minimum. The terms from each particular may be different; when you receive a card, it will come with a welcome package with the full terms and conditions for the benefits. If you have use for a particular benefit, read the terms and choose the card that offers the best terms. Among cards of the same payment network and class (such as a non-Signature Visa), the terms tend to be more or less the same.

III. Interest rate and fees

APR: 12.99%-22.99% – doesn’t matter since you won’t carry a balance, correct?

Annual fee: $0 – awesome! Just the type of card you want to carry for the rest of your life.

Balance transfer fee: 3% – again, doesn’t matter if you don’t carry a balance. Otherwise, this means that you can use the card to pay the balance on another credit card, for a fee of 3% of the amount paid. Even if you do carry a balance, this fee hardly ever makes sense. But 3% is standard.

IV. Additional Benefits

Overdraft Protection: link your Bof A checking account to your credit card; if your checking account balance drops below zero, the negative amount will get transferred to your credit card to save you the overdraft cost. This benefit is more useful than you may think; I know a lot of people that have been hit with overdraft fees at least once. This benefit is offered by most banks.

ShopSafe: this function lets you create a virtual credit card account when shopping online, helping protect your real credit card number. You can set an expiration date for this account. If you shop on a suspicious website and feel nervous about giving away your credit card information, this is the way to go. You can read more about this on BofA’s website. This feature is quite unique to Bank of America.

Mobile Banking and Text Banking: access your account and perform most functions through your smartphone/cell phone. Every bank has these nowadays.

For an overview of BofA credit cards’ hidden benefits, check this post out: https://hiepsfinance.com/2013/02/22/anatomy-of-a-credit-card-bank-of-america-cash-rewards/

EMV Chip Technology: provides usability in countries that use smart chip technology to process credit cards, such as Canada, Mexico, and the UK. Some more forward-thinking banks provide this technology.

Tap&Pay: this is cool if you’re a technology geek. At certain stores, you can tap your tap&pay card on a device reader instead of swiping or insert your card. Saves you the trouble of opening your wallet and pulling your credit card out. Only a few banks offer this.

For an overview of BofA credit cards’ hidden benefits, check this post out: https://hiepsfinance.com/2013/02/22/anatomy-of-a-credit-card-bank-of-america-cash-rewards/

V. Introductory offer

The offer comes in two pieces:

1. $100 cash back bonus after $500 in purchases in the first 90 days of account opening
2. 0% APR for 12 billing cycles

Each piece is standard among credit cards, but it is rare that one card would offer both.

VI. Conclusion: 

In many aspects, Bank of America is one of the more generous credit card issuers, with a two-piece introductory offer and some additional features and benefits. The BankAmericard Cash Rewards is a standard straightforward cashback card with a pretty generous reward structure, even more generous if you also bank with BofA. It comes without an annual fee. All in all, this is a good card to keep and use for the long term. The secured version of this card was my first credit card, and I intend to keep the card, now graduated, for the rest of my life.