Does the BoA Travel Rewards work as a general spend card?

[CreditDunce]

I am trying to decide on what general spend card I want to apply for. I was thinking about the BoA Travel Rewards assuming I am willing to open a Merril Edge account.  But I think I must be missing something... 

From what I have read, I open the Merril Edge account.  Transfer at least enough funds to get the Platinum Honors level.  Then I get a $500 bonus ($1000 for 200k).   

I apply for the BoA Travel Rewards. I get the 10,000 + 7,500 points sign on bonus for a $500 spend.  Total value = $175.  I may need to wait before applying for the CC.  The BoA website says the bonus is based on your 3 month average balance.

From there website it says:

Bonus will vary based on your type of rewards program. BankAmericard Cash Rewards™ and BankAmericard Privileges® with Cash Rewards bonuses apply to rewards redeemed into a Bank of America® checking or savings account or a Merrill Lynch Cash Management Account®. BankAmericard Travel Rewards® bonus applies to customers with a qualifying account. For these cards, if enrolled in Preferred Rewards, your base reward earnings will increase by 25%, 50% or 75%, depending on eligible tier. For example, if you earn $100 in base rewards, your Preferred Rewards bonus will add $25, $50 or $75 to your reward earnings, totaling $125/$150/$175 depending on your tier. The bonus will replace the customer bonus you may already receive with the card. For all other eligible points and cash rewards cards, the Preferred Rewards bonus is applied to the monthly base rewards depending on eligible tier. Please click here for a complete list of ineligible cards and additional program details

My base CB would be 1.5% * 1.75 = 2.65%.  (Or I am misreading the above and my CB would only be 2.25%?).

Cons are:

Only Chip and Sig

must use points against travel expenses

$50 fee to close ME account (also loose the Preferred Rewards bonus)

need BoA checking account (already have)

Another investement account to manage

May need to wait 3 months before the Preferred Rewards bonus & free trades kick in.  Or maybe not with a new account

Pros

Points not capped

No FTF/Forex

No AF

100 Free trades per month in the ME account.  ETF trades should count.

Nice sign on bonuses

So what am I missing?  It seems to make a great card for general spend. But I am not hearing much about it.  If it is such a great deal, I would think I would be hearing more about it.

Note: I will need to make sure I can buy any ETF with the free trades.  But I should be able to find some relatively low cost ETF's to replace the mutual funds I sell.

[CreditDunce]

After reading more of the fine print, I see the AE sign up bonus is paid after 6 months and they will issue a 1099 for the bonus sign up.  Since I am in the 25% tax bracket, I would only net $375 for moving 100k or $750 for moving 200k. 

On the positive side the free equity/ETF trades are available after 5 days of account opening.

I still need to do some research to see what ETF's can be purchased via ME.

[mongstradamus]

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@CreditDunce wrote:

After reading more of the fine print, I see the AE sign up bonus is paid after 6 months and they will issue a 1099 for the bonus sign up.  Since I am in the 25% tax bracket, I would only net $375 for moving 100k or $750 for moving 200k. 

On the positive side the free equity/ETF trades are available after 5 days of account opening.

I still need to do some research to see what ETF's can be purchased via ME.

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if i remeber correctly they have some nice index fund etfs from vanguard that you can pick. I would do that if i had an ME account. 

[CreditDunce]

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@mongstradamus wrote:

if i remeber correctly they have some nice index fund etfs from vanguard that you can pick. I would do that if i had an ME account. 

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Thanks, that would work out nicely.  The funds would be coming from Vanguard.

I think my biggest concern is since ME is owned by BoA there almost has to be hidden fees somewhere.  Still it would be nice to have a CC with unlimited 2.6%+ CB.

[mongstradamus]

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@CreditDunce wrote:

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@mongstradamus wrote:

if i remeber correctly they have some nice index fund etfs from vanguard that you can pick. I would do that if i had an ME account. 

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Thanks, that would work out nicely.  The funds would be coming from Vanguard.

I think my biggest concern is since ME is owned by BoA there almost has to be hidden fees somewhere.  Still it would be nice to have a CC with unlimited 2.6%+ CB.

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If I understand you have to put an crap ton of money into an boa account just to get that bonus is that correct? I am not an big fan of having to keep an ton of money in an account thats getting almost no returns back. Also if we are talking about travel cards, i would rather just use barclays arrival+, which is 2.2% cb on travel expense. or use another 2% cb card like double cash or fidelity amex. I would rather put the money you have to put in boa account into an brokerage account at vanguard or shchwab or something like that. 

[CreditDunce]

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@mongstradamus wrote:

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@CreditDunce wrote:

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@mongstradamus wrote:

if i remeber correctly they have some nice index fund etfs from vanguard that you can pick. I would do that if i had an ME account. 

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Thanks, that would work out nicely.  The funds would be coming from Vanguard.

I think my biggest concern is since ME is owned by BoA there almost has to be hidden fees somewhere.  Still it would be nice to have a CC with unlimited 2.6%+ CB.

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If I understand you have to put an crap ton of money into an boa account just to get that bonus is that correct? I am not an big fan of having to keep an ton of money in an account thats getting almost no returns back. Also if we are talking about travel cards, i would rather just use barclays arrival+, which is 2.2% cb on travel expense. or use another 2% cb card like double cash or fidelity amex. I would rather put the money you have to put in boa account into an brokerage account at vanguard or shchwab or something like that. 

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You need to have a BoA checking account, but you don't need to keep much money there. Right now I am using direct deposit to get a free BoA account.  However, I believe you get all maintenance fees waived in up to 4 BoA once you qualify for the Preferred Rewards.  

If you don't keep much money in your BoA accounts, you have to keep a crap load in the ME investment account.  The combined 3 month average balances between your BoA accounts and ME accounts has to be over 100k to get the 75% extra bonus.   You can also include any personal investment accounts at Merril Lynch, but that would be high fees.

If I do it, I would transfer about 110-120k from my Roth IRA's to the ME investment account.  I will probably have to swap stuff around to keep the same asset allocation, but in the end my retirement accounts will have about the same asset allocation as I currently have.   Assuming it is free to buy the ETF's and the hidden cost are minimum, my cost should be about what I am paying now for Vanguard.

There is some danger of the stock marketing crashing, lowering my ME balance below what is required for 75% extra bonus.  However, once you get the status, you have 1 year to get your balance up if it falls below the minimum.

PS. The Arrival+ is on my list of cards to app for next month.  I can't overlook the sign on bonus.  I was also going to get the Fido Amex.  But if I go this route, the Travel Rewards would replace the Fido Amex.

Edit: link for more info on how it is supposed to work

https://www.bankofamerica.com/preferred-rewards/