A Premium Travel Credit Card -- With a Catch

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published 22 September 2017

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.

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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.

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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.

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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.