Bank of America Cash Rewards credit card review: Choose your own 3% cash-back category and customize this card for your spending habits, with no annual fee

Review: Is the Bank of America Cash Rewards credit card right for you?

If you're looking for a cash-back credit card with no annual fee, the Bank of America® Cash Rewards credit card is an intriguing offer to consider. Along with a welcome bonus of $200 in cash rewards after you spend $1,000 on purchases in the first 90 days of account opening, it has a feature you don't see on most other rewards credit cards.

With the Bank of America® Cash Rewards credit card, you actually get to choose the category in which you'll earn the most rewards. Along with earning 2% cash back at grocery stores and wholesale clubs, you'll earn 3% cash back on up to $2,500 in spending each quarter (combined with 2% categories, then 1%) in one category you pick from the following list:

• Gas
• Online shopping
• Dining
• Travel
• Drug stores
• Home improvement / furnishings

This can be a big boon, especially because many people have shifted their shopping online or are taking road trips instead of flying. It's also handy if you have a big purchase coming up like furniture or a home repair, because you can change your 3% category each calendar month to plan for future spending.

The Bank of America® Cash Rewards credit card comes with an introductory 0% APR on purchases and balance transfers for the first 12 billing cycles (then 13.99% - 23.99% variable), which makes it a good option if you want to pay for a big purchase over time or if you need to consolidate and pay off high-interest credit card debt.

That said, while the Bank of America® Cash Rewards credit card has a good sign-up bonus, there are other no-annual-fee cards with similar welcome offers, higher category bonuses, more flexible rewards, and a lower minimum spending requirement. For example, the Chase Freedom Flex℠ offers a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening, plus opportunities to earn as much as 5% cash back.

Bottom line: The Bank of America® Cash Rewards credit card is geared to consumers who want to earn simple cash back in popular categories with no annual fee. The welcome bonus is decent, and getting to customize the category in which you earn the most rewards is a unique feature that could appeal to people who spend a lot on gas, online shopping, dining, travel, drug stores, or home improvement and furnishings. 

Bank of America Cash Rewards credit card vs other Bank of America credit cards

*3% and 2% cash back on the Bank of America® Cash Rewards credit card on up to $2,500 in combined spending each quarter, then 1%.

Bank of America Cash Rewards credit card vs other cash-back credit cards

*3% and 2% cash back on the Bank of America® Cash Rewards credit card on up to $2,500 in combined spending each quarter, then 1%.

**excluding Target and Walmart purchases

How to use rewards from the Bank of America Cash Rewards credit card

If your goal is earning cash back on all your spending, you'll notice a few major advantages to the Bank of America® Cash Rewards credit card. The biggest plus is that you get to pick your 3% back category out of several popular options, but it can also be very lucrative to earn 2% back at grocery stores and wholesale clubs. Just remember that you only earn 3% back and 2% back on your first $2,500 in spending each quarter, after which you'll earn 1% back.

This means the absolute most you could earn in bonus rewards is $75 per quarter, and that's if you maxed out the 3% category without using your card at grocery stores or wholesale clubs first.

However, if you're a Bank of America Preferred Rewards member, the rewards you earn from the card can be worth 25% to 75% more, depending on how much you have on deposit with Bank of America and Merrill (like savings or investments). If this applies to you, the Bank of America® Cash Rewards credit card is much more enticing.

You can redeem your cash rewards for any amount, at any time, for statement credits, deposits made directly into a Bank of America checking or savings account, or for credit to an eligible account with Merrill. If you're contributing to a qualifying Merrill 529 account or want a check, the minimum redemption is $25. It's also possible to set up automatic redemptions (starting at $25) to an eligible Bank of America or Merrill account (except 529s).

You may want to consider another card if you don't find the Bank of America® Cash Rewards credit card's 3% categories overly enticing, or if you want to earn more than 1% back on regular purchases. For example, the Citi® Double Cash Card is a popular option, because cardholders earn 2% cash back on all purchases (1% when they make a purchase and another 1% when they pay it off). This card doesn't have any bonus categories to keep track of or spending caps, but the biggest downside is that it currently doesn't offer a welcome bonus.

The Chase Freedom Flex℠ has also been insanely popular since its release, and it's easy to see why. This card doesn't charge an annual fee, yet you'll earn 5% back on up to $1,500 in quarterly bonus category spending (then 1%) as well as 5% back on travel purchased through Chase Ultimate Rewards. You'll also earn 3% back on dining and drugstore purchases with no limits at all and 1% back on everything else.

Plus, you won't have to meet as high a minimum spending requirement to unlock the welcome bonus — the Chase Freedom Flex℠ comes with a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.

All of these cash-back credit cards are worth considering, but you should make sure the card you select offers the best rewards rate for your typical spending habits.

Bank of America Cash Rewards credit card benefits and features

The Bank of America® Cash Rewards credit card doesn't come with a lot of benefits or features, but that is fairly standard among credit cards with no annual fee.

Introductory 0% APR on purchases and balance transfers

The most appealing perk is the introductory 0% APR offer on purchases and balance transfers for the first 12 billing cycles (then 13.99% - 23.99% variable). Note that balance transfers under this offer must be made within the first 60 days of account opening, and there's a balance transfer fee of 3% (minimum $10).

Other perks

Once you sign up, you'll get contactless payment options, the ability to use your card in a mobile wallet, and access to online banking. 

You'll also be able to set up account alerts that let you know when a purchase is made or a payment is due. And you'll get a free look at your FICO credit score through your online account management page or the Bank of America mobile app.

Bank of America Cash Rewards credit card fees and costs

The Bank of America® Cash Rewards credit card has a $0 annual fee, and most of the fees it does charge are easy to avoid. 

Along with the previously mentioned balance transfer fee, you'll also pay fees for foreign transactions, so the card isn't a good pick for purchases made outside of the US. If you need a card to use overseas, consider a credit card with no foreign transaction fees.

Like most banks, you'll also pay a fee for cash advances and late or returned payments.

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