What the Bank of America Premium Rewards Elite card offers
The Bank of America Premium Rewards Elite is a cash-back card that earns 1.5% cash back on all purchases with no category restrictions. There is an annual fee of $95. The card is designed for people who spend consistently across different categories and want a single rate rather than tracking bonus categories, though the 1.5% return is lower than what category-focused cards offer in their bonus categories.
The card comes with a sign-up bonus: new cardholders receive a cash-back reward after meeting a minimum spending threshold within the first few months. The exact bonus amount and spending requirement change periodically, so check the current offer before you open an account.
Beyond cash back, the card includes travel protections (trip cancellation insurance, lost luggage reimbursement, emergency medical and dental coverage abroad), purchase protection, and extended warranty coverage on may be able to access items. These benefits are standard on premium cards at this price point and are useful only if you travel or make large purchases regularly.
Key Takeaways
- You earn 1.5% cash back on every purchase with no bonus categories to track, which simplifies spending but pays less than category cards in their bonus categories.
- The $95 annual fee means you need to spend roughly $6,300 per year just to break even on cash back, assuming you earn 1.5% on all of it.
- A sign-up bonus is available to new cardholders, though the amount and spending requirement vary by offer period.
- Travel and purchase protections are included, but these matter only if you travel internationally or buy high-value items regularly.
- Bank of America's Preferred Rewards program can increase your cash-back rate if you maintain a may have access to deposit or investment balance with the bank.
How the cash-back rate works with Bank of America's Preferred Rewards
Bank of America offers a tiered rewards program called Preferred Rewards that boosts your cash-back rate if you hold money with the bank. The boost depends on your total balance across checking, savings, and investment accounts. At the lowest tier (Gold), you need $20,000 to $49,999 in combined balances to get a 25% increase on your cash-back rate. At Platinum (50,000 to $99,999), you get 50% more. At Diamond and higher, the boost reaches 75%.
With the Premium Rewards Elite card, a 25% boost raises your 1.5% rate to 1.875%. A 50% boost brings it to 2.25%. A 75% boost reaches 2.625%. These rates are competitive, but only if you already maintain the required balance with Bank of America. If you are moving money into the bank just to unlock the boost, the math usually does not work — the interest you lose by moving money from a high-yield savings account elsewhere will exceed the extra cash back you earn.
The Preferred Rewards boost applies to all Bank of America credit cards you hold, not just this one. If you carry multiple cards, the boost compounds across all of them.
When the $95 annual fee makes sense
The annual fee breaks even at different spending levels depending on your Preferred Rewards tier. With no Preferred Rewards boost, you need to spend about $6,300 per year to earn $95 in cash back at the 1.5% rate. With a 25% boost (Gold tier), the breakeven point drops to about $5,000 per year. With a 50% boost (Platinum), it falls to roughly $4,200. With a 75% boost (Diamond), you break even around $3,600.
The fee makes sense if you spend regularly across all categories and either have a Preferred Rewards balance with Bank of America or are willing to maintain one. It makes less sense if you spend under $6,000 per year, if you concentrate your spending in bonus categories where other cards pay 2% to 5%, or if you do not bank with Bank of America.
Bank of America sometimes waives the annual fee for the first year for new cardholders. Check the current offer to see whether this applies.
How this card compares to flat-rate alternatives
Other flat-rate cash-back cards charge no annual fee and pay 1.5% to 2% on all purchases. The Citi Double Cash card earns 1% when you buy and 1% when you pay the bill, totaling 2% with no annual fee. The Capital One Quicksilver card earns 1.5% with no annual fee. The Discover it card earns 1% with no annual fee (though it also offers rotating 5% categories).
The Premium Rewards Elite's advantage is the Preferred Rewards boost, which can push your rate above 2% if you maintain a balance with Bank of America. Its disadvantage is the $95 fee, which no-fee competitors do not charge. If you do not have a Preferred Rewards balance or do not plan to maintain one, a no-fee card earning 1.5% to 2% is a better choice.
If you spend heavily in specific categories (groceries, gas, dining, travel), category-focused cards often pay 2% to 5% in those categories. The Premium Rewards Elite is simpler but pays less in those cases.
Travel and purchase protections included with the card
The card includes trip cancellation and trip interruption insurance, which reimburses you if you cancel or cut short a trip for a covered reason (illness, injury, death of a family member). The coverage limit is typically $5,000 to $10,000 per person, though the exact amount depends on the current terms. You must purchase the trip with the card to be covered.
Lost luggage reimbursement covers baggage and personal items if an airline loses or damages your luggage. Emergency medical and dental coverage applies if you need care while traveling outside the United States. Purchase protection covers items you buy with the card against accidental damage or theft for a set period (usually 120 days). Extended warranty coverage extends the manufacturer's warranty on may be able to access items.
These protections are valuable only if you travel internationally or buy high-value items regularly. If you rarely travel or make large purchases, they add little practical value and do not justify the annual fee on their own.
How to decide whether this card fits your spending
Start by calculating your annual spending. If you spend under $6,000 per year, the annual fee costs more than you will earn in cash back, so a no-fee card is better. If you spend $6,000 to $10,000 per year and do not have a Preferred Rewards balance with Bank of America, a no-fee 1.5% or 2% card is still a better choice.
If you spend over $10,000 per year and either maintain a Preferred Rewards balance or are willing to do so, the Premium Rewards Elite becomes competitive. The Preferred Rewards boost pushes your effective rate above 2%, which beats most no-fee alternatives. If you also travel internationally and value the trip cancellation and medical coverage, the card becomes more attractive.
If you concentrate your spending in specific categories (groceries, gas, dining, travel), compare the Premium Rewards Elite to category cards first. A card that pays 3% on groceries and 2% on gas will usually beat 1.5% to 2.625% flat-rate cash back if those categories represent most of your spending.
Frequently Asked Questions
Does the sign-up bonus count toward the annual fee breakeven?
Yes. If the current sign-up bonus is $200 and you earn it in your first year, that $200 covers more than the $95 annual fee. However, sign-up bonuses are one-time offers. In year two and beyond, you rely on cash back from spending to justify the fee, so calculate your ongoing spending before you open the account.
Can I get the Preferred Rewards boost without keeping a large balance with Bank of America?
No. The boost requires a minimum combined balance in Bank of America checking, savings, and investment accounts. If you do not maintain that balance, you do not receive the boost. Moving money into Bank of America temporarily to unlock the boost usually costs more in lost interest than you gain in extra cash back.
What happens to my cash back if I close the card?
Cash back you have already earned remains in your account and can be redeemed. You will not earn new cash back after the card is closed. If you close the card before the annual fee posts, you may avoid paying it, though Bank of America's exact policy on this varies.
Is the cash back taxable?
Cash back from credit card rewards is generally not considered taxable income by the IRS because it is treated as a discount on your purchase, not income. However, sign-up bonuses may be treated differently depending on the amount and your circumstances. Consult a tax professional if you have questions about your specific situation.
Can I use this card if I do not bank with Bank of America?
Yes, you can open and use the card without being a Bank of America customer. However, you will not receive the Preferred Rewards boost unless you open a Bank of America account and maintain the required balance. Without the boost, the card's 1.5% rate and $95 fee make it less competitive than no-fee alternatives.