topic BOA Better Balance -- taxable rewards? in Credit Cards

BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 19:39:30 GMT

I just did a product change from a Bank of America card I was almost never using to their Better Balance card.

In case anyone is unfamiliar with it, BOA basically pays you $30 each quarter as long as you are always paying more than your minimum payment. Sweet for me since I always pay in full. I have just put my recurring Netflix bill of $28 on it and will set up Billpay to always pay $28.01 each month.

The quarterly cash bonus is either $25 (if you have no BOA savings or checking) or $30 if you do have one. If you do have one, you get your choice of a statement credit or having BOA deposit the $30 in your savings account.

Does anyone have any dirrect experience with what BOA does the following spring in terms of reporting your bonuses to the IRS? (I am talking here very specifically about the Better Blalance card.) All my previous experience with rewards bonuses has been with cash back cards (Amex, Citibank, etc.) where they have given me a statement credit (no IRS reporting). If I were to tell BOA to give me a cash bonus in one of their bank accounts (rather than a statement credit), would that increase the chance that they would report that to the IRS as taxable income?

Thanks in advance to anyone who knows anything about the nuts and bolts of the BB card.

Re: BOA Better Balance -- taxable rewards?

kdm31091 — Wed, 23 Sep 2015 19:47:05 GMT

Cant help with your specific inquiry but its surprising they allowed a PC to Better Balance Rewards which has typically been a no-no for about a year now

Re: BOA Better Balance -- taxable rewards?

axlm — Wed, 23 Sep 2015 20:07:30 GMT

Sorry to ask instead of answering your question (my wife has it, but for less than a year, so I don't know yet), but how on earth did you managed that PC? I've been denied like 8 times. Any specifics you can share? Thanks

Edit: I just checked my account and saw 2 offers: Travel Rewards@16.99% with $200 bonus and Better Balance@13.99%- no bonus. Maybe this will make it easier to PC?

Re: BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 20:50:03 GMT

One of the sites I occasionally visit is DoctorOfCredit. It was there that I saw his review of the BB card (I had never heard of it) and he had a few followup articles. One of them discussed BOA's increasingly common NO to permitting a PC. His advice was -- keep calling back until you get someone who will do it for you. It may take many many calls (he said). Then there was a comment thread where most people said they had tried a few times and been turned down, but every once in a while someone would chime in with success.

So what I did is just took some notes, created a little script for myself, noted which numbers to press to get a human, and then decided I would call in three times a week. Kind of like taking out the trash or making yourself coffee. Each time I expected that I would get turned down. I decided to never call more than every other day and also to treat the refusal cheerfully and end the call, and to move on with whatever I had going on for the day. I also prepared for the possibility that after two months I would still have no BB card -- and resolved that would be ok too. Finally I decided to do the whole thing on speaker phone so I could do other stuff while I was preparing for the No.

Then I just got into a rhythm and I think on the third week somebody agreed to do it. Probably somebody who didn't get the memo but whatever. My approval was in early Sept, for what it is worth.

I am glad the PC worked out because I had a different BOA card that was once great for me (their cash back 1-2-3% card) but had since become useless due to other cards I had acquired.

Re: BOA Better Balance -- taxable rewards?

axlm — Wed, 23 Sep 2015 21:13:08 GMT

Great story, kudos for your determination! I saw that thread too, and was determined to keep calling just like yourself. But after the 8 denial I decided I didn't want the card THAT much

Congrats, and enjoy your free rewards (taxables or not!)

Re: BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 21:28:55 GMT

Thanks Axim. Another nice feature for me about the PC to the BB card is that it allows me to rest a little easier about the possibility that my BOA card might one day be cancelled (my BOA account is 12 years old and I hope to keep it around for a few more decades).. As it was I was having to work to remember to use it for something small once every three months. And even then I wasn't completely confident that BOA would never cancel a card that was buying a total of $10 during the entire year.

Now I get paid to use it, and it shows a non-trivial balance every month, and I still get to leave it in a shoebox and forget about it.

Re: BOA Better Balance -- taxable rewards?

axlm — Wed, 23 Sep 2015 21:50:52 GMT

@Anonymous wrote:
Thanks Axim. Another nice feature for me about the PC to the BB card is that it allows me to rest a little easier about the possibility that my BOA card might one day be cancelled (my BOA account is 12 years old and I hope to keep it around for a few more decades).. As it was I was having to work to remember to use it for something small once every three months. And even then I wasn't completely confident that BOA would never cancel a card that was buying a total of $10 during the entire year.

Now I get paid to use it, and it shows a non-trivial balance every month, and I still get to leave it in a shoebox and forget about it.

I hear you, my BofA Platinum is my oldest account (graduated from a Secured) and I don't have any use for it either (or the Cash Rewards, for that matter).

I just went on chat, and after been denied for the BBR for the ninth time, I accepted to PC it to the Travel Rewards (no signup bonus for me, I was cheeky enough to ask). At least I will now get 1.5 for non-category purchases and acces to their Travel site.

Just wish they open the gates sometime in the future

Re: BOA Better Balance -- taxable rewards?

gdale6 — Wed, 23 Sep 2015 22:21:34 GMT

AFAIK credit card bonuses/rewards are not taxable.

Re: BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 22:44:04 GMT

Credit card rewards are treated as a "rebate" rather than as income, and the IRS does not levy taxes on them.

...You will know the answer to that if BofA 1099s you next January or February.

Re: BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 22:43:49 GMT

Yup, I know that they typically are not taxed, especially when they take the form of "points" or statement credits. In this case, however, I have the option of having BOA send the money to my BOA savings account, so it is taking the form of cash deposited into a bank account. Bonuses for bank accounts are often taxable, and certainly BOA will be reporting the interest generate by the savings account -- so I was just wondering whether there was any real possibility that choosing that option might cause BOA to report the money in a way that they might not if I chose to receive it as a statement credit.

Re: BOA Better Balance -- taxable rewards?

nightglider — Wed, 23 Sep 2015 23:16:39 GMT

Redemption method is irrelevant to whether rewards are taxable. This is determined by how they're earned. As applied to the BBR, the $100 would not be taxable since you have to spend to receive it. For the extra $20, I've always been under the assumption that it would be taxable, but I'm not positive (I don't have the card...yet).

Re: BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 23:24:52 GMT

I am beginning to collect more and more favorite members here! What a fabulous story! I guess there is no time restriction with PC with BOA as we PC'd a less than 2 month old Bank Americard to the Cash Rewards. Now every time I call in for an APR reduction on my Amtrak, I will see about the CR PC. This would be awesome!

Re: BOA Better Balance -- taxable rewards?

Anonymous — Wed, 23 Sep 2015 23:30:53 GMT

@Anonymous wrote:
I am beginning to collect more and more favorite members here! What a fabulous story! I guess there is no time restriction with PC with BOA as we PC'd a less than 2 month old Bank Americard to the Cash Rewards. Now every time I call in for an APR reduction on my Amtrak, I will see about the CR PC. This would be awesome!

Yup. PC'd a week old travel rewards to BBR myself.