Posted by William Charles on June 13, 2017
Credit Cards

Published on June 13th, 2017 | by William Charles

65

[Rumor] Bank of America To Enter Premium Credit Card Market

Frequent Miler is reporting that Bank of America plans to enter the premium credit card market with a new card in September or October of 2017 to compete directly with the Chase Sapphire Reserve. This isn’t the first new card to enter the space with U.S. Bank launching the Altitude Reserve and UBS launching the Visa Infinite (American Express also made significant changes to their Platinum card in response).

Details are sparse regarding the new Bank of America card, but Frequent Miler is reporting the following:

  • $450 annual fee
  • Travel reimbursement (unknown amount)
  • Points are worth 1.5¢ towards travel
  • No transfer partners

To me that reads as a Chase Sapphire Reserve clone rather than a competing product (although significantly worse with no transfer partners). Bonus categories with Bank of America are somewhat interesting due to the preferred rewards program. I assume there will be some additional benefits (e.g lounge access and some kind of airline related benefit as well). Let’s hope for a nice big sign up bonus and travel reimbursement that operates on a calendar year. If you’re going to copy Chase, do it with a bang!

Credit goes to Frequent Miler for this information. As always if you have any additional information or want to leak anything (doesn’t have to be Bank of America) get in touch with me!



65 Responses to [Rumor] Bank of America To Enter Premium Credit Card Market

  1. Justin says:

    If you’re gonna release a premium CC at least TRY to differentiate it from the CSR. Makes me wonder what the BoA CC execs are doing all day if they just end up releasing a (worse) CSR clone

    • TomTX says:

      Well, they differentiate by having fewer perks for the same annual fee! Crazy appealing!

    • Frank says:

      Look at their current product line and I have no hope they will do a good job in rolling up a premium product on par with CSR. Preferred rewards? That’s a plain loss of at least 1% interest, which nerf every possible benefits it carries. BoA Cash rewards, 2% grocery and 3% gas? No thanks. I have better alternatives. BoA BBR? Who will use it other than putting one charge a month to get the rewards? Another odd thing is, as such a big bank, their CCs don’t even have benefits like price match which is offered by other major banks. They lack the ability to think about their customers and design an truly attractive product. Probably it won’t even good enough to be a “clone” of CSR, but a crappy ghost of it.

      • Bob says:

        If you can get preferred rewards through merrill lynch investments like stocks/mutual funds, it’s not bad since you’ll invest anyway. Checking/savings is a total waste.

        • Frank says:

          Merrill Lynch is expensive. I am an active trader. Trade fee really adds up. That may cost me in thousands $ in exchange to probably no more than a couple hundreds $ in credit card rewards. Not worth it.

          • Fork says:

            Really? You’re trading 100k worth more than 100 times a month?

          • JC says:

            Frank, I totally agree with your thoughts on Merrill Lynch being really expensive. They charge way more than other brokerage firms as a Preferred Rewards Platinum Honors client. The trading fees are so ridiculous and out of line with the likes of other online brokerages that I would never choose them.

            As an active trader myself using the Merrill Edge platform to trade if I trade 100 trades per month I would spend $0.00 with Merrill Edge while Fidelity and Etrade which have some of the lowest costs out there only charge me 4.95 per trade or $495 per month. So I save $495 by using Fidelity or Etrade which annually means I save $5940.

            Some months I complete 200 trades a month which with Merrill Edge costs me $695 at 6.95 per trade while Fidelity and Etrade cost $990.00 which means Fidelity and Etrade save me $295 a month or $3540 a year.

            I usually never hit more than 300 trades a month but even if I did Merrill Edge would cost me a ridiculous $1390.00 with my 100 complimentary trades per month while Fidelity and E-Trade only cost me a reasonable and low cost $1485 so I still save $95.00 per month or $1140.00 per year with E-Trade and Fidelity.

            I agree totally that the Preferred Rewards Platinum Honors Program is worthless with the 75% bonus on points considering they would charge me a minimum of $1140.00 extra annually over E-Trade and Fidelity and it could be as high as $5940.00. And what do I get for all of that extra cost just a few hundred dollars extra in credit card rewards at most annually. Totally worthless.

          • Eric says:

            JC,

            Your math doesn’t make sense. In each situation the ME total cost is lower but you are saying that Fidelity/Etrade saves you money. Can you clarify?

          • DSP says:

            @ Eric

            I’m no expert but I believe JCs response was sarcasm giving a variety of examples where even very active traders would save money using ME. JC was illustrating that Frank would have to make hundreds if not thousands of trades per year for ME to be more expensive than most brokerages.

            The only thing that I am unsure of is how this would compare to interactive brokers as I have ready in many places that they are the cheapest for high volume traders.

          • DSP says:

            “would have to make hundreds if not thousands of trades per year”

            Scratch that. Make that, per MONTH.

          • Frank says:

            @DSP I am using interactive broker too. It’s fairly cheap (<<<<$6.95). And I also use Robinhood which literally costs nothing. To me, all JC's calculation is wrong and BoA's 100 free trades are worth little, if not zero. Comparing one expensive broker with another doesn't necessarily prove the cheaper one brings you "saving". You can't make a valid comparison if ignoring there are better options out there.

          • Eric says:

            DSP,

            I just read over JC’s first paragraph again and I believe you are right. I would have never imagined that someone would waste so much time like that just to prove a point that it didn’t even cross my mind.

          • Eric says:

            Frank,

            If Robinhood suddenly goes out of business do you know what happens to your investments? I don’t see how their business model of free trades could survive long term.

          • Frank says:

            @Eric That’s why I don’t use Robinhood as my primary and never put more than the limit of SIPC to that account. I think there is not much I should worry about for now. But I agree with your point. I don’t really see how Robinhood can survive in competition long term if they don’t charge any commission. Nonetheless, Robinhood has proved that it costs very little money to process trades as a broker. The main stream brokers charge $4.95,$6.95 or even more for a service that is nearly free to them, which is essentially a steal.

          • calwatch says:

            Merrill’s margin rate, like most mass market brokers, is atrocious. I have my taxable account at IB for that reason, since OptionsHouse ended their sub 4% rate for people borrowing less than a quarter million dollars. However, I have my buy and hold Roth IRA at Merrill and have been completely satisfied. I use the Merrill research to do my IB trades.

      • shaun says:

        This is a typical example of you not understanding how they want to think. The cash rewards for example gets me 7.25% on gas(5.25% +2% from costco) because I have preferred rewards honors client and that has always been the target market. The travel rewards is 2.65% for all purchases.

        If you actively trade on the stock market like i do, you have 100 free trades per month worth up to almost $700.

        So they actually think about their clients, you are just not who they are thinking about.

        • Frank says:

          Your scheme only makes sense if you meet the mandatory requirement set by BoA. The real question is how many people are there in the group you belong to that have $100k+ sitting in their merrill lynch account (let’s be honest merrill lynch is not the big five brokers in the market) AND play with BoA credit cards that benefit from this preferred rewards. If their target is the main stream customer, this is way too restricted.

          • shaun says:

            BoA is a retail bank and as much as possible try to get retail banking clients and for the most part are very conservative.

            You were shitting on their card portfolio but did not take into consideration the sweet spot for their cards is if you maintain some level of relationship via merrill edge or cash deposits. You referenced the fact that they don’t think about the clients which may actually be the opposite ( not that i care about a big bank) since their credit card products offer extra incentives to clients who want to keep their money with them long term.

            You ask how many people have that kind of money with BoA? I believe it’s quiet substantial and they are trying to get as many of those people as possible by offering them incentives, ie extra earning power on their credit cards, free merrill edge trades etc.

            I personally would not trade with merrill edge without those incentives. I don’t think i would’ve used their credit cards with the basic returns but they offer the best combination for everyday spend in my wallet. Obviously, this will vary from person to person.

          • calwatch says:

            A lot of people have $100k+ in retirement accounts. It’s not that unusual. And rather than having it at Vanguard, I can invest in the same ETFs and funds at Merrill and get all the goodies for no extra fee.

  2. Credit says:

    BofA is not stupid. People are stupid. People will pay the same fee or a worse product and think they are smart. Like People voted for Trump. Stupid people.

  3. Frito Pendejo says:

    As they as they “clone” the 100k bonus then I’m just fine with this

  4. James C. says:

    I’m bored of these cards now, they’re about as “elite” as an iPhone. But if BofA is going to do this, they should make it a metal Merrill Lynch card with a bull engraved into the face.

  5. projectx says:

    Coming soon: more lounges leaving the Priority Pass program.

    • Charlie says:

      This comment worries me. Part of the justification for the $450 annual fee on the high end cards is access to Priority Pass lounges in overseas airports. If Priority Pass implodes, it may take down one or more high end credit cards with it.

  6. Eric says:

    CSR will always be my favorite travel card 🙂

  7. Bob says:

    Was hoping they’d have a card like the sapphire preferred with $100 AF range

  8. MarcoPolo says:

    @DoC
    Read this on FW: https://www.fatwallet.com/forums/finance/1572026
    30 Major banks launching Zelle – A digital payments network

    • Rick says:

      It’s built on clearXchange, which exists for a long time.

      • NinjaX says:

        but this new service is a huge expansion on that infrastructure. it was very limited before. now the list of member banks is huge.

        also, i dont like how in the fine print it says “Zelle and the Zelle logos used herein are trademarks of Early Warning Services, LLC.”

        what? EWS? just great…

  9. DSP says:

    Go big or go home BoA. 100k signup with 1st year waived AF.

  10. Jeff says:

    I saw something like this on reddit a few months ago regarding a survey. Believe it was 1.5 points for all purchases, but 3 points for restaurant and travel. With preferred rewards you can get up to 75% points.

    We’ll see how this will compete against the CSR, but I’ll rather have travel partners than the Preferred Rewards if it’s identical to the CSR.

  11. Dee says:

    Dead on Ariival!

  12. Rob Arias says:

    Really hoping this will partake in Preferred Rewards, specially if it has some sort of bonus categories. That multiplier could really come in handy.

    Side note, I really hope they add the bull in somehow. Definitely one of my favourite things I’ve seen.

  13. Ea says:

    If I had to guess, I’d say this rumor is just a rumor–intentionally leaked to build up hype and brand awareness around BoA’s ho-hum portfolio of credit cards.

    Fall 2017 is also when a lot of CSR cardholders will be coming up on their first anniversary and deciding whether to stay or jump ship. BoA is hoping to capture CSR refugees, but if its premium card flops, it’ll be an epic flop.

  14. Max says:

    “clone rather than a competing product (although significantly worse”

    Doesn’t this describe everything from BoA?

  15. Fred says:

    This post is a great example of why I’m reluctant to rely on any expertise from the comment section.

  16. NinjaX says:

    Doc, i dont think its accurate to say Chase Sapphire Reserve clone. details are still TBD and my very first guess is a USB AR clone. no transfer partners and at 1.5 sounds more like AR to me. CSR benefits will not be around long term anyway.

  17. Lrdx says:

    Reading the Frequent Miler article fantasizing about the value:
    Too rich. What are you even smoking?!

    There is no way you could extract 7.875% return from the card. If Preferred Rewards is applied on this card, it will be probably only applied against base points, like it was on the old AAA card. It would be still a 3.75x return on travel (assuming 3x on travel), what is still 5.625%.

    If it’s just 2x points on travel, Preferred Rewards on base points, it’s 2.75x = 4.125% return. Still good enough, but already under CSR. If Preferred Rewards on all points, 3.5x = 5.25% return.

    Another alternative that this card “replaces” BoA TR, adding 1.5x points value: Total 3.9375% return on everything. Too rich, not gonna happen.

    I bet on 2x on travel, PR on base points only version. This is the only thing that does not sound like a HUGE loss.

  18. Mike says:

    This is the old discussion we had here. It was supposed to be 95 fee and 1.5 on everything. Dining and travel was 2x. I’m sure this card will come with more perks to justify the annual fee. Lol

    http://www.doctorofcredit.com/bank-america-survey-regarding-two-new-cards-bank-americard-premium-rewards-store-card/

    • Lrdx says:

      1.5x point value with that point earning structure means 5.25% on travel and dining and **3.9375%** on everything else.

      If that’s true, I don’t need any perk or signup bonus to get this card.

  19. Bryan says:

    Just spoke with a close friend that has worked in the BOA Credit Card Rewards Department for years, he gave me the following details:

    50k point bonus – not 100% sure of spend requirement yet

    $100 yearly travel credit

    $100 Global Entry/TSA Pre credit

    2x points on travel/dining

    1.5x points on everything else

    $95 Annual fee

    Sounds more like a competitor for the CSP than the CSR to me!

  20. Miguel says:

    The travel credit is greater than the annual fee? Did I read that right?

  21. Adam says:

    The question is: will there be points-transfer partners??

  22. Mark says:

    All these cards (UBS, Altitude Reserve, this upcoming BofA card) fall FAR behind the Chase Sapphire Reserve.
    While the CSR is for real because it lets you transfer points on a 1 to 1 basis (!!!) to airlines, plus all the other perks it has, the aforementioned cards don’t even get close to that.
    They want to make people believe that they can compete, but looking at the fine print exposes them to be totally weak compared to the CSR.

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