Bank of America Preferred Rewards Explained: Is It Worth It?

Bank of America's Preferred Rewards program is one of the most underrated banking perks for people with significant cash. If you keep $20,000+ in BofA banking accounts and Merrill investment accounts, the program automatically boosts your credit card cash back rate by 25-75%. That's a real, tangible benefit on top of any rewards the card already earns — and most BofA card holders who qualify don't realize it's even there.

Here's how it actually works.

The tiers, simply

Combined balance means the average daily balance across:

• BofA checking accounts
• BofA savings accounts
• BofA CDs
• Merrill Edge brokerage and IRA accounts
• Merrill Lynch advisory accounts

What doesn't count: 401(k)s held with other firms, mortgages, home equity loans, business accounts.

To qualify, you need a personal checking account at BofA. Then your combined balance is calculated as a 3-month average — so you can't game it by parking money for a week.

What the boost actually does

The boost applies to base rewards earned on BofA credit cards. So:

Customized Cash Rewards card (3% chosen category, 2% groceries/wholesale, 1% other):

• Gold (+25%): 3.75% / 2.5% / 1.25%
• Platinum (+50%): 4.5% / 3% / 1.5%
• Platinum Honors (+75%): 5.25% / 3.5% / 1.75%

That last line is significant. A no-annual-fee card paying 5.25% in your chosen category, plus 3.5% on groceries, plus 1.75% on everything else? That's the highest sustained no-annual-fee cash back rate available anywhere. Better than a 2% flat-rate card on every dollar, and with 5.25% on top.

Travel Rewards card (1.5x points everyday, 3x points on travel through BofA Travel Center):

• Gold: 1.875x / 3.75x
• Platinum: 2.25x / 4.5x
• Platinum Honors: 2.625x / 5.25x

A no-annual-fee, no-foreign-transaction-fee card earning 2.625x on everything is competitive with cards charging $95 annual fees.

Premium Rewards card ($95 annual fee, 2x travel/dining, 1.5x other):

• Platinum Honors: 3.5x travel/dining, 2.625x everything else

For someone at the Platinum Honors tier, a Premium Rewards becomes one of the most lucrative travel cards on the market.

The catch: where the money has to be

The "$100,000 in BofA accounts" sounds high. But it doesn't all need to be cash:

• Most of it can be in stocks at Merrill Edge. A Roth IRA or traditional IRA at Merrill Edge counts. So does a regular taxable brokerage account.
• Merrill Edge is a free brokerage. No commissions on stock trades, decent platform. If you currently have a brokerage at Schwab/Fidelity/Vanguard, you can transfer it to Merrill Edge — usually $0 fees, takes 1-2 weeks.
• You don't have to actively trade or move money. Once it's at Merrill, it just sits there earning whatever it would anywhere else. The Preferred Rewards bump is on top.

For someone with an existing $100K+ brokerage at another firm, transferring to Merrill Edge to qualify for Platinum Honors is essentially free money. The rewards boost on regular spending recovers any switching cost within months.

Other Preferred Rewards perks

The cash back boost is the headline benefit, but there are other tier-based perks:

At Gold:

• 5% boost on interest rates for some savings accounts
• Free non-BofA ATM withdrawals (limited count)
• Discounts on home loan origination fees

At Platinum:

• 10% boost on interest rates
• More free non-BofA ATM withdrawals
• Better discounts on home loan fees

At Platinum Honors:

• 20% boost on interest rates
• Unlimited free non-BofA ATM withdrawals
• Even more home loan discounts
• Free wires (limited count per month)

Most of these are minor in absolute terms. The credit card boost is by far the biggest dollar-value benefit at most tiers.

When Preferred Rewards isn't worth pursuing

Don't move money to BofA just to qualify if you don't already have it elsewhere. The math doesn't justify changing financial institutions if your existing setup works.

Also: if your spending profile doesn't favor the Customized Cash or Travel Rewards categories, even the boosted rates may not beat what you'd earn on competing cards. A $100K Platinum Honors holder who spends mostly on dining and travel might still earn more on a Sapphire Preferred or Amex Gold than on a boosted BofA card.

The math works strongly when:

• You already have $50K+ in retirement / brokerage accounts that could be at Merrill
• You're comfortable consolidating with one financial institution
• Your spending fits the Customized Cash bonus category structure

It doesn't work when:

• You'd have to move money from a better-fit institution (a Schwab Investor Checking with high interest rates, for example)
• You'd be sacrificing investment options or services you actually use elsewhere
• Your spending is concentrated in dining/travel where Chase or Amex cards beat BofA's structure

How to get to Platinum Honors

Practical path for someone starting from zero with BofA:

1. Open a personal checking account at BofA. Their basic checking has fee waivers if you maintain modest direct deposits or balances.

1. Open a Merrill Edge brokerage account. Same online interface as BofA's app once linked.

1. Transfer existing brokerage assets to Merrill Edge. Most brokerages will do an ACATS transfer for free; Merrill sometimes pays the outgoing firm's transfer fee as a bonus.

1. Wait for the 3-month rolling average to land you at the right tier. Once you've crossed $100K in combined balance for 3 consecutive months, you'll be classified as Platinum Honors.

1. Apply for the BofA Customized Cash Rewards card. The boost applies automatically once you're classified at the right tier.

For someone with $100K+ already in retirement and brokerage accounts, the whole process takes 4-6 months and pays off forever after — for as long as you maintain that balance and continue using the card.

The Preferred Rewards boost is the single biggest reason a Bank of America credit card might be the right pick for you. Without the boost, BofA's cards are decent but not exceptional. With Platinum Honors applied, the Customized Cash Rewards is arguably the strongest no-annual-fee card available to anyone.