It's never good news when a rewards program gets devalued. Bank of America's recent changes to its Preferred Rewards program, first reported by Doctor of Credit, are a prime example. The headline? Reaching the highest tier is now significantly harder, requiring a whopping $1,000,000 in combined balances to qualify.

What's Changed?

Previously, accessing the highest tier of Preferred Rewards required a substantial, but attainable, $100,000 in qualifying Bank of America accounts. This provided valuable benefits, like boosted credit card rewards and interest rate discounts. Now, that threshold has increased tenfold. This change prices out many long-time customers who previously enjoyed top-tier perks.

What Does This Mean For You?

If you were close to, but not quite at, the previous $100,000 threshold, this news is particularly disappointing. You'll likely need to re-evaluate whether Bank of America's rewards program still aligns with your financial goals. Even if you were already enjoying the highest tier, it's crucial to assess whether maintaining a million dollars in Bank of America accounts is the best use of your assets compared to other investment opportunities.

Strategies to Maximize Your Rewards, Regardless

Even with this devaluation, you can still get great value from credit card rewards. Here are a few strategies to consider:

  • Diversify Your Credit Card Portfolio: Don't put all your eggs in one basket. Explore cards from other issuers that offer competitive rewards rates and benefits in categories where you spend the most.
  • Optimize Spending Categories: Many cards offer bonus rewards for specific spending categories like dining, travel, or groceries. Track your spending and use the card that offers the highest return for each purchase.
  • Consider Cash-Back Alternatives: Some cash-back cards offer a flat rate on all purchases, providing simplicity and consistent value, regardless of your spending habits.
  • Explore Travel Rewards Programs: If you're a frequent traveler, consider cards that offer airline miles or hotel points. These rewards can often be redeemed for significantly more value than cash back.
  • Use RewardSmart! Our app helps you track your spending, identify the best cards for each purchase, and maximize your overall rewards earnings.

A Word of Caution

Avoid chasing rewards at the expense of sound financial decisions. Don't overspend just to earn more rewards, and always pay your credit card bills on time to avoid interest charges. The value of rewards is quickly eroded by debt.

The Bottom Line

Bank of America's changes to the Preferred Rewards program are a significant blow to many customers. While disappointing, it's an opportunity to re-evaluate your credit card strategy and ensure you're maximizing your rewards across all your cards. Use RewardSmart to analyze your spending and find the best cards for your unique needs. Don't settle for less!