BofA Preferred Rewards

[credit_is_crack]

Hi All, I need some eyes to confirm my delusion here. 

Not sure if those goes in Personal Finance or Credit Cards, but mods please feel free to move as needed. 

I have about $20k in one particular savings account making about $20-$23 a month, so estimating about $276 max in a year. If I move that $20k over to BofA it'll trigger the Preferred Rewards and I'll get a 25% bump on credit cards. 

I have 2 BofA cash rewards cards (personal, I know it would not impact my business cash rewards card). Each gets 3% in the chosen category up to $2,500 per quarter. I am spending the full $5k ($2.5k per card) per quarter to max the rewards. If that 3% jumps up to 3.75% I'd net about $187 a quarter (both combined) coming out to about $750 at years end.

Am I looking at this right? Would I be netting a larger return by parking it at BofA and collecting my "interest" via the credit cards than actually have it sit in online savings account?

• Option A - park $20k in online savings and bank about $276 at the end of the year
• Option B - park $20k at BofA (with a horrible savings APY), but bank $750 via credit card cash back at the end of the year

I'm telling myself.."I see how you can see that..if you look at it sideways and squint"  but is my math correct? Am I missing something glorious here?

[coldfusion]

Yes, but there are 2 points.

First, the money has to be parked for 3 full calendar months before you are promoted to being a Preferred Rewards client.  You will still see the long term benefit but you'd take a hit for those first 3 months.

The second is that the money can be parked in a BoA account, a Merrill or Merrill Edge account, or a combination of the 2 as long as the aggregate total is more than $20K. Depends on how you want to invest that $20K.

[credit_is_crack]

Sweet. Thanks @coldfusion for the notes. Didn't know about the 3 months waiting period, but like you mentioned long term I'd come out well ahead. I'd still be getting my regular 3% ($150) in that window so I wouldn't be loosing much at all, may $60-$70 assumming the rates held. 

I don't know why I didn't even see it before - it's been right there in front of me lol. Obviously it's not an investing plan, but I'll just take that cash back and invest it further.

My plan could be, move the $20k to trigger the upgrade, then once it's activated move more to get to tier 2 bumping it to 4.5%. It would also move my PR to 2.25% on anything so that's nice too, although my Limitless is still chugging along with its 2.5%

[imaximous]

Maybe I'm not understanding this right, but I think you're not doing the math correctly.

Right now, you're getting $600 a year between both cards with no relationship. If you get the additional 25%, you'll be getting $750 but it's only a difference of $150 over what you're already getting without moving any money.

The other account is offering $276 a year, so you're still making more just by leaving things the way they are.

[credit_is_crack]

That's what I came up with first, however I literally was testing the "what counts for online purchases" paying small amounts on one of my BofA cards and learned my rent triggered the 3% - which is epic!

Before learning this I was making $0 off of it. Now that I now it counts, I'll be paying it thru there which will produce the $600. The portal does charge a fee of .5% which comes out to about $9 a month). Even factoring that in, $108 in fees a year, I'll net about $640 a year (with the 25% bump) vs the $276 on the savings alone (and paying no fee on the rent). 

Am I looking at that right?

[Aim_High]

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@imaximous wrote:

Maybe I'm not understanding this right, but I think you're not doing the math correctly.

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I think @imaximous is correct. That said, Preferred Rewards is a great program and I am working on that now.  If you can move assets to be Platinum Honors ($100K) that could really be a game changer. And as @coldfusion said, Merrill deposits count so you don't have to accept a crappy interest rate in savings. 

I used a SUB to open checking last fall and got $300 for new account as established customer (credit) and $4K in DDs over 90 days. I moved $20K over to qualify for Gold and already getting that bump on CRs.  Then I opened Merrill and getting $375 SUB as PR client for opening Merrill and moving $100K into investments. My final step will be to app PRs which you already have and get the $500 SUB. I plan to do that this fall to let new accounts age but also, since you only move up based on the three-month look back, I want to be Platinum Honors already when I do the SUB spend to max it out.  Three bonuses for $1175 in my case. The Merrill Bonus goes up to $900 if you move $200K. 

I even did the work for you. Lol. You can split it with me. Lol  Follow one of these links and you can get $400 SUB for opening checking with $4K DD (total deposits) or $500 SUB with $10K DDs.  Current links from our friend DoC.  

https://promo.bankofamerica.com/ff2020T2400/?

https://promo.bankofamerica.com/ff2020T2500/?#

[Aim_High]

Here is the link for ENHANCED Merrill Lynch offer for Preferred Rewards members. Higher SUBs than the standard offer. Offer good until July 15th but it's been extended a few times. Use offer code 900ME when you apply. 

https://www.merrilledge.com/offers/900offer

[Aim_High]

With Platinum Honors,

and both the Cash Rewards and Premium Rewards cards,

you earn:

2.625% on everything (1.5% x 1.75 bonus)

3.5% on Dining, Travel, Groceries, Warehouse Clubs 

(2.00% x 1.75 bonus)

5.25% on your selected Categories*

(3% x 1.75 bonus)

*gas, online shopping, dining, travel, drug stores, or home improvement/furnishings

[imaximous]

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@credit_is_crack wrote:

That's what I came up with first, however I literally was testing the "what counts for online purchases" paying small amounts on one of my BofA cards and learned my rent triggered the 3% - which is epic!

Before learning this I was making $0 off of it. Now that I now it counts, I'll be paying it thru there which will produce the $600. The portal does charge a fee of .5% which comes out to about $9 a month). Even factoring that in, $108 in fees a year, I'll net about $640 a year (with the 25% bump) vs the $276 on the savings alone (and paying no fee on the rent). 

Am I looking at that right?

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Regardless, I still think you can make the $600 minus fees without moving the money. That's kinda the point I was trying to make.

If you pay rent with a 0.5% fee, you'll get $500 + $276 = $776

If you get a 25% bump, now your math looks like this, $20,000 x 3.25% (3.75% - 0.50% fee) = $650 a year, which is still less than leaving your $20k at the other bank.

Now, once you start moving up the Preferred Rewards program, things change. At Platinum, you already come out ahead by a small margin. If you're planning to get there at least, then it can make sense.

[VPExecutive]

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@imaximous wrote:

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@credit_is_crack wrote:

That's what I came up with first, however I literally was testing the "what counts for online purchases" paying small amounts on one of my BofA cards and learned my rent triggered the 3% - which is epic!

Before learning this I was making $0 off of it. Now that I now it counts, I'll be paying it thru there which will produce the $600. The portal does charge a fee of .5% which comes out to about $9 a month). Even factoring that in, $108 in fees a year, I'll net about $640 a year (with the 25% bump) vs the $276 on the savings alone (and paying no fee on the rent). 

Am I looking at that right?

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Regardless, I still think you can make the $600 minus fees without moving the money. That's kinda the point I was trying to make.

If you pay rent with a 0.5% fee, you'll get $500 + $276 = $776

If you get a 25% bump, now your math looks like this, $20,000 x 3.25% (3.75% - 0.50% fee) = $650 a year, which is still less than leaving your $20k at the other bank.

Now, once you start moving up the Preferred Rewards program, things change. At Platinum, you already come out ahead by a small margin. If you're planning to get there at least, then it can make sense.

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Right, but how much could OP make by simply moving that money from a savings account to a stock like Coca Cola that yields 3% just in dividends through Merrill Lynch, plus thee boosted credit card rewards.