A Premium Travel Credit Card -- With a Catch
If you're a frequent flier, this rewards card may be worth your while.
Pricey premium rewards cards, such as Chase Sapphire Reserve (annual fee: $450), promise cardholders luxury perks. The Bank of America Premium Rewards card, scheduled to debut in September, offers similar perks at a less-than-premium price of $95 a year.
The standard rewards rate is two points per dollar spent on travel and restaurant purchases and 1.5 points on everything else (points are worth a penny each). If you are enrolled in the bank's Preferred Rewards program, you get a bonus of 25%, 50% or 75% on points earned -- but you must hold funds in eligible BofA accounts to earn a bonus ($100,000 or more for the 75% bonus). The card also offers a $100 credit every four years to cover a TSA PreCheck or Global Entry application fee, plus a $100 annual credit toward incidental airline fees.
By our math, a customer who charges $22,000 to the card annually and earns the 75% bonus will rack up an outstanding $545 yearly. If the bulk of the Preferred Rewards balance is in high-earning investment accounts, that could be great. But $100,000 in checking or savings accounts would generally earn no more than $100 after a year. The same money in an internet savings account would earn as much as $1,400 in a year.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If you're looking for a stronger package of travel benefits, the Chase Sapphire Reserve card may be worth the $450 annual fee. You'll get a $300 yearly credit on travel purchases, free access to airport lounges with a Priority Pass Select membership, a $100 TSA PreCheck or Global Entry application-fee credit -- and travel and dining purchases earn three points per dollar (one point on everything else). Redeem points for travel purchases at a rate of 1.5 cents each, or transfer them to partner loyalty programs.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.
-
Earn Delta SkyMiles Worth Up to $1,800 with an AMEX Business Card
Delta SkyMiles and American Express offer 150,000 on business credit card for new cardholders.
By Ellen Kennedy Published
-
Stock Market Today: Markets Soar Amid Strong Earnings for Big Tech
Equities ended the week on an up note thanks to some of the market's biggest names.
By Dan Burrows Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
By Vaishali Varu Last updated
-
How Much Life Insurance Do You Need?
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life-insurance needs.
By Kimberly Lankford Published
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
By Bob Niedt Last updated
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
By Kaitlin Pitsker Published
-
5 Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Rates are high this year, but you can still find an affordable loan.
By Daniel Bortz Published