Bank of America has enhanced the Preferred Rewards program and launched a new premium travel rewards credit card, prompted by growing competition.
On Nov. 22, 2021, the bank launched the new Bank of America Premium Rewards Elite Credit Card aimed to compete with premium travel credit cards, such as the Chase Sapphire Reserve card and The Platinum Card® from American Express. Right now, the product is only available via wealth managers and financial advisers.
Additionally, on Dec. 9, 2021, Bank of America announced that it is expanding the Preferred Rewards program, which is its loyalty program for high-net-worth customers. The program will now get two additional membership tiers for clients with more than $1 million and more than $10 million in assets with the company (including Merrill investment accounts), as well as new rewards and benefits.
On top of that, in the upcoming weeks, the bank will be launching a new loyalty program, Partner Rewards, for its debit and credit cardholders, which will allow the choice between credit card rewards and enhanced merchant benefits with eligible partners.
The new credit card product and the loyalty program enhancements mainly target high-net-worth and ultra-high-net-worth customers of Bank of America, even though the Premium Rewards Elite card will be available for digital applications to the general public in the near future, according to the issuer.
What the new Premium Rewards Elite card offers
The competition in the luxury travel rewards card niche has been continually growing in 2021, fueled by enhancements to the popular Chase Sapphire Reserve and the American Express Platinum, as well as the recent launch of the exciting Capital One Venture X Rewards Credit Card.
Bank of America recognized the gap in its travel credit card product suite and responded with the launch of the Premium Rewards Elite credit card.
The card costs $550 per year and offers the following rewards and benefits:
- 2 points per dollar on travel and dining
- 1.5 points per dollar on general purchases
- 24/7 full-service concierge
- $300 annual airline incidentals credit
- 20% savings when redeeming rewards for airfare through Bank of America’s travel site
- $100 in credits to cover TSA PreCheck or Global Entry membership
- $150 in annual lifestyle credits in categories such as streaming, rideshare, food delivery and fitness
- Priority Pass Select lounge access
- Access to Infinite Luxury Hotel Collection
- No foreign transaction fees
“The outstanding travel and lifestyle perks of Premium Rewards Elite make it an exciting addition to our suite of award-winning credit cards,” said Jason Gaughan, credit card executive at Bank of America. “We’re proud to offer this new card designed to further reward and enhance the client experience.”
As stated by Bank of America on a press call, the card is currently being offered to clients by wealth managers and financial advisers but will become available digitally in February 2022.
What the enhanced Preferred Rewards program offers
The Preferred Rewards program, available to Bank of America clients with a minimum of $20,000 across Bank of America and Merrill accounts, previously had three tiers. The highest tier, Platinum Honors, was available for customers holding at least $100,000 in assets with the company.
The updated five-tier structure is aimed to benefit the bank’s higher-net-worth clients. Bank of America has added two new tiers, Diamond and Diamond Honors, for customers with over $1 million and $10 million in assets with the bank, respectively.
Diamond and Diamond Honors members will receive improved benefits, including the following:
- 75% credit card rewards bonus on eligible Bank of America credit cards
- 20% interest rate boost on Bank of America Advantage Savings
- Mortgage interest rate reduction
- HELOC interest rate reduction
- Reduced annual fee with a Merrill Guided Investing account
- Exclusive luxury and lifestyle benefits, such as customized events from luxury brands
- Access to other personalized services
“These enhancements to our Preferred Rewards program reflect our ongoing commitment to rewarding clients for their relationship with us,” shared Randy Takian, head of wealth management banking and lending at Bank of America.
“Preferred Rewards program members already enjoy bonus points on card spending, discounts on home lending and fee waivers. The new Diamond and Diamond Honors tiers take the program to another level for our high net worth and ultra-high net worth clients,” said Takian.
What the new Partner Rewards program will offer
The Partner Rewards program, set to launch in the coming weeks, will provide more options for how cardholders redeem partner offers and credit card rewards.
Cardholders who enroll in Partner Rewards will be able to pick a Bank of America card to tie to their account in the program. Then, they’ll have an option to earn enhanced merchant benefits instead of their regular credit card rewards at eligible partners.
The first partner to join the program will be Shell, and cardholders will be able to choose between earning their standard card rewards or receiving a discount at Shell gas stations.
What the news from Bank of America means for you
With the changes to the Preferred Rewards program, Bank of America is rewarding the loyalty of its most high-earning clients. To a regular bank account or cardholder, however, these enhancements don’t offer any value.
The same goes for the Bank of America Premium Rewards Elite card. While the bank is planning to make it available to the public, it’s Preferred Rewards members who’ll benefit from it most. With the 75% rewards bonus, Platinum Honors, Diamond and Diamond Honors members will be able to earn 3.5 points per dollar on travel and dining purchases and 2.62 points per dollar on all other purchases.
For the rest of consumers who are interested in a premium travel rewards credit card, the Premium Elite Rewards doesn’t quite match the value offered by the competition.
For example, at $550 per year, the Chase Sapphire Reserve is a much more compelling offer with $300 in flexible annual travel credits, a 50% point-value boost when redeemed through Chase’s portal and more.
Further, the new Capital One Venture X only charges $395 per year and offers $300 in annual credits for travel booked with Capital One, a 10,000-mile annual bonus ($100 in value when redeemed for travel) and other desirable perks.
Additionally, both Capital One and Chase have transfer partners that allow cardholders to stretch the value of their rewards – something Bank of America doesn’t offer.
As for the Partner Rewards program, it’s yet to be determined how much value it can bring to cardholders, depending on which brands it will partner with and how compelling the partner offers will be.
Bank of America has doubled down on offering extra value to its wealthiest clients by restructuring the Preferred Rewards Program and offering new benefits to customers who hold more than $1 million in assets with the company.
Even the bank’s new premium travel card, the Bank of America Premium Rewards Elite card, will bring the most value to those in the highest tiers of the Preferred Rewards program.
For the rest interested in luxury rewards travel cards, competing credit card products may provide more robust rewards and desirable perks.