Friday, August 26, 2016

Best Bank of America Credit Cards

Bank of America® offers 21 unique credit cards, and each one is tailored to a different type of consumer — the frequent flyer, the frequent grocery shopper, even the person who just wants to pay a little more than the minimum payment every month. I looked at all of the cards Bank of America® has to offer, pulled out five of its best options, and created a guide to help you decide which card might be right for you.

The Simple Dollar’s Top Picks for 2016

Biggest Cashback Rewards

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BankAmericard Cash Rewards™ Credit Card Highlights

Want cash back? Try the BankAmericard Cash Rewards™ Credit Card. This card gets you 1% cash back on every purchase — plus 2% cash back at grocery stores and wholesale clubs (think: Costco), and 3% cash back on gas for the first $2,500 in combined grocery/wholesale club/gas purchases every quarter.

That last part gets a little complicated, so here’s an example of how it could work: Let’s say you spend $1,500 on groceries and wholesale club purchases, plus $1,000 on gas, hitting your $2,500 maximum for the quarter. You’ll get 2%, or $30, back on the grocery purchases; you’ll also get 3%, or $30, on your gas purchases. Plus, you’ll get 1% cash back on all other purchases, including any grocery/wholesale club/gas purchases over $2,500.

Is this card right for you?

Those are a lot of perks, and they get even better when you factor in the card’s 0% intro APR for 12 months. Balance transfers made within the first 60 days of account opening also get a 0% intro APR for 12 months (although they do come with a 3% fee, or $10 minimum charge.)

What are the drawbacks? As with any cash rewards card, there’s a temptation to spend as much as possible to get the maximum reward. Going after the $100 cash rewards bonus by spending $500 in the first 90 days makes sense, but pushing yourself to hit that $2,500 maximum every quarter just to earn $50 or $60 doesn’t. Don’t spend more than you can pay back, and don’t be tempted to spend extra just because you’ve got that 12-month 0% intro APR. You’ll still have to pay off that entire balance at some point.

If you’re a student, consider the BankAmericard Cash Rewards™ Credit Card for Students. You get the same benefits and may become eligible for the Bank of America® Preferred Rewards program.

Best Perks If You Can’t Afford $2,500 Every Quarter

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BankAmericard Better Balance Rewards® Credit Card Highlights

The BankAmericard Better Balance Rewards® Credit Card is a lot like the BankAmericard Cash Rewards™ Credit Card in terms of balance transfer options: Both cards include a 3% balance transfer fee with a minimum of $10 charged per transfer, and both cards include an 0% intro APR for 12 months on balance transfers made within the first 60 days of opening your account.

However, the BankAmericard Better Balance Rewards® Credit Card offers one benefit that the BankAmericard Cash Rewards™ Credit Card does not: the opportunity to earn $25 per quarter to put toward your balance. You can earn this $25 by paying more than the minimum payment on time each month, and you can earn up to $100 per year.

Is this card right for you?

Yes, this $25 benefit is smaller than the cash you might earn if you max out your purchases on the BankAmericard Cash Rewards™ Credit Card program. However, a lot of us aren’t going to spend $2,500 every three months on groceries, wholesale clubs, and gas to get that maximum BankAmericard Cash Rewards™ Credit Card benefit.

Take a look at your spending history and see if you’re likely to earn more money via the Cash Rewards program or the Balance Rewards program. Keep in mind that the BankAmericard Cash Rewards™ Credit Card gets you a $100 online bonus if you spend $500 within the first 90 days, which is the same amount you can earn by using the BankAmericard Better Balance Rewards® Credit Card for an entire year.

If you just want to transfer a balance and pay it off at a 0% intro APR — let’s say you already have a rewards card you like, or you’re trying to avoid making purchases on credit — then this card is a smart choice. Make more than the minimum payment on time every month and you’ll earn rewards that help you pay down your balance more quickly.

Best Travel Perks

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BankAmericard Travel Rewards® Credit Card Highlights

Bank of America® has a lot of travel-related credit cards, most of them attached to a specific company: The Alaska Airlines Visa Signature® Credit Card, for example, or the Amtrak Guest Rewards® World MasterCard®. But those cards really make the most sense for people who prefer train travel, or who fly exclusively on Alaska Airlines. If you’re looking for a good travel rewards card that doesn’t limit you to one specific method of travel, BankAmericard Travel Rewards® Credit Card is ready to help.

With the BankAmericard Travel Rewards® Credit Card, you earn unlimited 1.5 points for every $1 you spend on purchases. You also earn 20,000 online points after making a minimum $1,000 in purchases in the first 90 days of opening your account. If you are a Bank of America® customer with an active Bank of America® checking or savings account, you could get 10% customer points bonus on every purchase, and Bank of America® Preferred Rewards customers can increase that bonus to 25% or more.

These points never expire, and you can redeem your points for a statement credit that you can use on travel expenses purchased via the BankAmericard Travel Rewards® Credit Card, including flights, baggage fees, hotels, cruises, rental cars, and vacation packages. (“Statement credit” means that the money can only be used to pay off travel expenses currently on your credit statement, so you have to book your travel before you use your points. You can also redeem your points for cash or gift cards, but your points will be redeemed at a lower value. Redemption starts at 2,500 points.)

Also, unlike all the other Bank of America® cards I’ve highlighted, the BankAmericard Travel Rewards® Credit Card has no foreign transaction fees — which is a great benefit for international travelers.

Is this card right for you? 

I think it comes down to whether you want to be rewarded in cash, airline miles, or points. It is a little hard to determine what these travel reward points are worth; Bank of America® includes a points calculator so you can see how your purchase dollars might come out as points (and then get translated back into dollars), but the calculator also states that your rewards will depend on your individual purchases.

Play around with the points calculator and see if this credit card would be a better value for you than the BankAmericard Cash Rewards™ Credit Card. If you have a favorite airline, or if you’re a frequent cruise or Amtrak traveler, check out those individual cards as well.

If you’re a student who wants to earn points for travel, check out the BankAmericard Travel Rewards® Credit Card for Students, which gives you the same benefits and the opportunity to become eligible for the Bank of America® Preferred Rewards program.

Lowest APR

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BankAmericard® Credit Card Highlights

If you’re looking for low APR, look no further than the BankAmericard® Credit Card. This card offers a variable APR of 11.24% to 21.24%, depending on your creditworthiness — which is the lowest APR offered by Bank of America®.

You also receive an 0% intro APR for 18 months for all balance transfers made in the first 60 days. Each balance transfer comes with a 3% fee or a minimum of $10 per transfer.

Is this card right for you?

The BankAmericard® Credit Card is pretty great if you’re looking for the lowest possible APR, but think carefully about what you’re leaving on the table if you choose to get this card. I’ve highlighted three other Bank of America® cards that offer cash rewards, balance credits, or travel credits — and their APRs are only a few points higher than the BankAmericard® Credit Card.

If you’re planning to pay off your balance in full every month, a low APR becomes less important. If you know you’re going to have to carry a balance on your credit card, the BankAmericard® Credit Card is worth considering, but so is the BankAmericard Cash Rewards™ Credit Card, which gets you a 0% intro APR for 12 months followed by a variable APR of 13.24% to 23.24%, plus you’re earning cashback rewards.

This card is good for people who aren’t interested in earning rewards — maybe you’ve got another airline miles card you’re already using — and do expect to occasionally carry a balance on one of their credit cards. If you have to carry a small balance a few times every year (like paying off holiday spending), a low APR card can be the right choice.

If you’re a student, consider the BankAmericard® Credit Card for Students. This card comes with the same benefits as the BankAmericard® Credit Card, including the 11.24% to 21.24% variable APR and the 0% intro APR for 18 months on balance transfers made in the first 60 days.

Best to Establish or Rebuild Your Credit

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BankAmericard® Secured Credit Card Highlights

The BankAmericard® Secured Credit Card requires a security deposit of at least $300 — that’s the “secured” part — and offers a maximum credit limit of up to $4,900 depending on your income, your ability to pay, and the amount of your security deposit. After 12 months, you may qualify to have your security deposit returned.

The BankAmericard® Secured Credit Card is the only card on this list with an annual fee, which means you’ll pay $39 for the privilege of using the card. You’ll get a 20.49% APR, with a penalty APR of up to 29.99% if you make a late payment. You’ll also get hit with a penalty fee of up to $37 per late payment, so do your best to make your payments on time.

Is this card right for you?

This all sounds like a lot of money, just to get a credit card. But don’t let the idea of a security deposit or an annual fee hold you back from establishing or rebuilding your credit. Building a credit history and proving you can manage credit effectively will help you in the long run, both in terms of getting an unsecured credit card (like the other cards on this list) and in terms of getting a car loan, a mortgage, or other types of credit.

The Bottom Line

Deciding what credit card is right for you starts with understanding how you’re going to use the card. Are you paying off a balance? Are you rebuilding your credit? Are you looking for rewards on grocery and gas purchases? Once you know what kind of credit consumer you are, use this guide to determine which Bank of America® credit card fits your situation. Or check out Bank of America®’s complete list of credit cards to see if any of them are right for you!

The post Best Bank of America Credit Cards appeared first on The Simple Dollar.

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