Posted by Chuck on August 17, 2017
Credit Cards

Published on August 17th, 2017 | by Chuck

174

Bank of America Travel Rewards Card Review: 2.6x Everywhere with Relationship, No Annual Fee, and No Foreign Transaction Fee

We asked on Twitter which cards readers want to see a review on, and a lot of people were interested in seeing more on the Bank of America Travel Rewards card, so here goes.

Card Overview

Link to Bank of America Travel Rewards

  • No annual fee
  • No foreign transaction fee (Bank of America cards are chip-and-pin enabled)
  • Card earns 1.5x everywhere with no maximum earnings
  • Earn a bonus if you are a Bank of America relationship customer (more on that below)
  • Runs on the Visa network and will/can be a Visa Signature card

Like all Bank of America cards, this will come with a free Transunion FICO score and free virtual account numbers for online shopping. The card will also give you access to Bank Amerideals (this is only important if you don’t already have a BofA credit or debit card).

Signup Bonus

  • Get 20,000 points after spending $1,000 within 90 days
  • The 20,000 points can be redeemed for a $200 statement credit to offset a travel purchase, see Using Points (below)

The signup bonus has been 20,000 for a while and was never higher.

Note, the Preferred customer bonus (see below) does not apply to the signup bonus on the Travel Rewards card, only on ordinary rewards from purchases. (Cash Rewards cards do get the Preferred customer bonus, but not the travel points card.)

Preferred Rewards

To understand the value proposition of this card, it’s important to examine the Bank of America Preferred Rewards program. We’ve reviewed it at length before, and we’ll recap the main points here.

If you have assets held in Bank of America accounts, you are eligible for a bonus as a Preferred Rewards relationship client. Here are the various tiers, along with their earning on this Travel Rewards card:

  • Bank of America checking account holders with between $.01 – $19,999: gets a 10% bonus on rewards bringing the 1.5x  to 1.65x everywhere
  • Preferred Rewards Gold $20,000 – $50,000: gets a 25% bonus on rewards bringing the 1.5x  to 1.875x everywhere
  • Preferred Rewards Platinum $50,000-$100,000: gets 50% bonus on rewards bringing the 1.5x  to 2.25x everywhere
  • Preferred Rewards Platinum Honors $100,000+: gets 75% bonus on rewards bringing the 1.5x  to 2.625x everywhere

Aside from the credit card bonuses, you also get other benefits by being a relationship client of BofA, such as free trades and discounted fees.

$100,000 is certainly a hurdle, the good news is that the assets don’t need to be held in a checking account to give status; even stock holdings count. Merrill Edge is owned by Bank of America, and any assets held there count toward your Preferred Rewards status. You can have no money in your BofA checking account and still get Preferred Rewards status.

Even those who engage is ‘passive investing’ can use Merrill Edge. For example, you can buy shares on VTI in your Merrill account. Many people can make themselves eligible for the relationship bonus by moving over their retirement account or other brokerage holdings to Merrill Edge.

There’s a good FQF post about the nitty-gritty details of how the $100k requirement works and plays out. It’s based on a three month average; you won’t get status immediately.

Earning Points

Card earns 1.5x everywhere with no cap. Where it gets interesting is if you have Preferred Rewards status. As explained above, you’ll earn 1.65x – 2.625x everywhere depending on your relationship status. 2.6x everywhere is an excellent earning rate for regular, non-bonused spend.

Other Ways to Earn

You can also book travel through their portal and an extra 1.5x per dollar (3x total). This is similar to many online booking agency (e.g. Orbitz or booking.com) which are available on shopping portals to earn extra rewards. Note, you won’t get the relationship bonus on the travel bonus, only on the base earnings. (page 3)

They used to have a shopping portal as well, but that was discontinued a couple of years ago.

Using Points

On a basic level, points are worth 1¢ per point when redeemed against travel charges of $25 or more. For example, if you spent $26.87 on Uber, you should be able to redeem 2,687 points toward that charge and get a $26.87 statement credit.

You might be familiar with the Barclay Arrival which uses a similar system. From what I’ve heard, the Travel Rewards has an even broader definition of travel than most other cards, and considers a wide variety of travel purchases as eligible for redemption.

Now, let’s dive a little deeper.

Redeeming Points

Points can be redeemed as a travel credit, cash, or gift card. All redemptions have a minimum of $25.

The easiest would be cash, but that only gets you .6 cents per point. You can do a little better by redeeming for gift cards at .8 cents per point. The recommended redemption is to redeem for travel purchases which gets you a full one cent-per-point.

Some details on how travel redemptions work:

  • Points don’t expire, but you can only redeem against travel charges from the past 12 months.
  • Total redemption must be more than $25. You can redeem against charges under $25 so long as the total redemption is $25. For example, if you have a $3 bus fare and a $22 Uber, you can redeem them since the total is $25.
  • You can redeem part of a large charge. For example, if you have 2,500 point, you can redeem for a $25 credit to offset part of a $$128 airfare charge. And you won’t lose the unredeemed part of that travel charge: you’ll still be able to create another redemption against the remaining $103 from that airfare charge.

A few things to keep in mind as a backup in case you find it difficult to redeem points for travel (e.g. if you don’t travel):

  • Things like bus passes, Uber, and tolls (e.g. EZ-Pass) might count as travel and can be redeemed if you have a charge of $25 or more. See list of eligible Merchant Category Codes here on page 6.
  • If you have a friend who travels a lot, see if you can transfer your points over to them to redeem and have them reimburse you.
  • At the time of this writing, I noticed that numerous gift cards are on sale and can be redeemed at 1 cent per point. Check your account to see if there’s anything you find useful.
  • If you are into gift card reselling, you should be able to use the Travel Rewards card to buy travel gift cards (e.g. Southwest or Delta) to trigger the travel credit at 1 cent per point. Then sell those, hopefully without losing too much in the process. This method obviously takes away from getting the full 1% value, but should be better than the .6% cash redemption value and could be better than the .8% gift card redemption value.

Transferring Points

The Travel Rewards card earns points which are part of the WorldPoints program (they seem to have rebranded and don’t call it WorldPoints anymore). Points earned on the card can either be redeemed directly for a travel credit or transferred to another World Points card and redeemed there.

History: Transferring used to be useful when WorldPoints were able to be redeemed for travel at a higher rate, something no longer available. The 2% Fidelity card used to earn WorldPoints back when it was administered by Bank of America, but that’s no longer the case now that it’s a U.S. Bank card. 

Going forward: The main usefulness of transferring points is to transfer over to your Premium Rewards card (or a friend’s card) which will then enable you to cash out the points without dealing with travel at all. Another use of transferring could be to transfer to a friend’s Travel Rewards card who has a travel charge to redeem against.

What Counts as Travel

If anyone has specific data points on which charges do and don’t work for travel redemptions, please let us know in the comments.

Codes as Travel to be redeemed:

  • Metro card and bus passes in NYC (1)
  • Some data points from a reader: gym membership worked for them, entry fees for 5k races, some museum and historic homes code as Travel while others code as gift shops. And car rentals, motels, cruises, etc. have always coded as travel without any problems.

Does not code as Travel to be redeemed:

  • E-Z Pass in Maryland (1)

Final Thoughts

The most interesting part of the card is undoubtedly the 2.625x everywhere without any limits which is really best-in-class. Obviously, it requires having a huge $100,000 relationship with Bank of America, but that’s within reach of a lot of people whether it’s from an IRA account or other stock holdings. Even with the $50k tier, the card earns 2.25x everywhere which is very good.

Another perk of the card is no foreign transaction fees which is uncommon among no-annual-fee cards.

Overall, it’s a card worth considering if you have relationship status with Bank of America. If you are holding funds elsewhere, it can make sense to move funds over to Merrill Edge to qualify, just please consider two things first:

  • Ensure that you aren’t losing under Merrill Edge compared to your previous brokerage institution
  • Keep in mind that some people can get similar value from other cards. For example, there are a couple of 2.5% cards out there now which is close to the 2.6x that BofA gets. Also, some people value the 1.5x that Freedom Unlimited gives them or the 2x that Blue for Business Plus gives them as being worth that amount.

When considering this card, it’s important to compare it against the Bank of America Premium Rewards Credit Card which is very similar except that it comes with a $95 annual fee and has the following benefits: $100 airline incidental credit, higher earning on dining and travel, and the ability to cash out points directly without dealing with travel charges, among other perks. See our full review of that card here.



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Tom
Tom

E-ZPass MD does not code as travel for me (although different states and agencies may code differently).

Ferris
Ferris

Looks like it may be useful if you have an investment account over 100K. Otherwise in a savings/MM, you are getting a 0% ROA and maybe netting an extra $1K in extra rewards, which raises your ROA to 1%. I prefer to make at least 5% ROA + rewards.

Tom
Tom

Nobody is suggesting to keep 100k in a 0.01% savings account. Everyone always recommends opening a Merrill Edge account, and considering it is 100% free to do so (and sometimes you get a new account bonus), there is no reason not to. Additionally, with 50k in the account you will get 30 free trades per month, and with 100k you will get 100 free trades per month. It’s a no brainer for long-term buy and hold investments. The account is not ideal for day trading, for many reasons which have been discussed in the past, but for long-term buy and hold investments, it cannot be beat.

Kevin
Kevin

Agreed.

Justin
Justin

Why is it bad for day trading given that you get 100 free trades?

Tom
Tom

It’s fine for casual day trading, but not for serious or professional day trading…

In summary, awful margin rates compared to IB, slow/clunky web-based java interface, no level 2 order entry, etc. But for simple, long-term strategies it can work quite well, depends on your specific needs and the sophistication of your overall strategy.

More than anything, I get frustrated by the slow web-based java interface… it’s soooo damn slowwwwwwww. Trying to jump in and out of trades quickly is very difficult. It’s fine for swing trading though.

Justin
Justin

Got it. Thanks for the reply.

calwatch
calwatch

If you were a serious day or swing trader I don’t see why you wouldn’t hold an IB account. But for buy and hold strategies and IRAs, like what I hold mines as, it works fine. Dividend reinvestment works and they buy partial shares.

TomTX
TomTX

Remember that Merrill will pay you to transfer your account. Up to $600 for $250k in accounts, including retirement accounts.

madage
madage

You have to have 2,500 points to redeem for travel credits, but you can redeem against individual charges that are less than $25.

Say you have five $5 travel charges and 2,500 points to redeem. You can make this redemption.

Now say you have 2,500 points to redeem, but only $20 total in travel charges available. You can’t make this redemption until you have another $5 in travel charges to redeem.

Tom
Tom

… an extremely minor inconvenience… the redemption thresholds and rules are exponentially easier than the Arrival+, for example.

ZinCO
ZinCO

Should also mention that you can do partial redemptions. So if you have a $100 charge but only $50 credit, you can get $50 reimbursed now, and the other $50 any time up to a year after the original charge.

Ja
Ja

So would the 20k signup bonus be worth 75% more for platinum honors members (so $350 instead of $200)?

Kevin
Kevin

No. DoC mentions this in the “Signup Bonus” section of the article. It stacks on the Cash Rewards card but not the Travel Rewards card (or the upcoming Premium Rewards card).

Mark O
Mark O

I would suggest people wait until the new card drops in Septemberish before signing up for this right now.

Kevin
Kevin

It doesn’t make sense to sign up for this right now, even with that new card coming up. It takes at least 2-3 months just to get Preferred Rewards eligible. Remember, the Travel Rewards card Preferred Rewards bonus applies at time of purchase, not redemption. You only want to use this card once you’re in the middle or upper tier of Preferred Rewards to get the reward bonus.

The Cash Rewards card, however, is different. The bonus for that card applies on redemption, not at time of purchase. I got the Cash Rewards card as soon as I decided to enroll in this program and started using it immediately for category spend but waited to redeem (3 months later) until I was at the highest tier in Preferred Rewards to get the bonus.

But yeah, I agree to wait for the new card.

Tom
Tom

Clever trick, never thought of that.

Jim
Jim

Are you referring to the new BofA Premium Rewards card, 50k for $3k MSR?

Might be better off applying for the biz Travel Rewards card instead, $25k for $1k spend. Most importantly, no 5/24 hit as a biz card

madage
madage

In the Preferred Rewards section of the post, it states: “You can have no bank account with Bank of America at all and still get Preferred Rewards status.” This is not correct. A Bank of America checking account is required to qualify for Preferred Rewards status.

Jay
Jay

Yep, came here to point that out. I had this card without any bank if America account and had to sign up for a checking account to start earning preferred rewards status.
Luckily almost all of the fees are removed from their checking accounts if your in the preferred program, so you don’t actually need to leave money in your checking account earning .01 % apr.

Treesha
Treesha

Hasn’t been true IME. Spouse has this card, and gets the Preferred Rewards status (has a linked ML investment account) and NO checking acct with BoA.

Dave P
Dave P

Do you absolutely need a checking account, or can you have just a basic savings account? I believe the savings account can be kept fee-free by simply maintaining a $500 balance, while their checking accounts have slightly higher hurdles.

Tom
Tom

Not sure about the savings account, but you’d be better off just getting a checking account anyway. As long as you can hit the lowest tier ($20k) then “Monthly maintenance fees waived on up to 4 eligible checking and 4 savings accounts from Bank of America”

Kevin
Kevin

I can’t recall why or how but in my first 3 months before being enrolled in Preferred Rewards, I still had no checking account fees.

Kevin
Kevin

Yes, you need a personal checking account according to this: https://www.bankofamerica.com/deposits/manage/understanding-preferred-rewards-requirements.go

It says, “You maintain your Preferred Rewards status if you have an active, eligible Bank of America® personal checking account and maintain a three-month average combined balance in your qualifying Bank of America deposit accounts and/or your qualifying Merrill Edge® and Merrill Lynch® investment accounts of at least $20,000 for the Gold tier, $50,000 for the Platinum tier, or $100,000 for the Platinum Honors tier.”

So it specifically states a personal checking account, with no mention of a savings account.

As far as fees, the checking account has no fees with the Preferred Rewards program. I keep $100 in my BofA checking account and don’t use it at all (no ACH transfers, DD, bill pay, etc.) and I don’t have any fees. I’ve read many people just have the checking account with a $0 balance and stays fee free due to the Preferred Rewards program.

Go to the following site for details on the benefits of the Preferred Rewards program at each tier: https://info.bankofamerica.com/preferred-rewards/

Dean
Dean

“A good idea is to first buy VTSAX with Vanguard and then transfer it over to Merrill Edge and then you won’t lose anything.”

Brokerages charge a couple of hundred bucks to transfer out an account.

Richard
Richard

Vanguard does not charge an ACAT transfer out or account closing fee.

Kevin
Kevin

Vanguard doesn’t charge a fee. If your brokerage account is with another firm, yeah, it’s likely they charge a fee. However, there are MANY DPs of people asking ME to reimburse them for this charge and they do it. I’ve never read a DP for a denial on this.

Also consider, ME always has a signup bonus for transferring money to them. https://www.merrilledge.com/cmaoffer

They currently have an up to $600 bonus and 300 free trades for 90 days. If you transfer just the $100k needed for the highest tier in the Preferred Rewards program, you’ll get a $250 bonus. A couple of times per year, this bonus offer goes up to $1000 for the same dollar amount of assets transferred.

Justin
Justin

Can someone explain why it is cheaper to buy VTSAX directly into a Vanguard account?

Kevin
Kevin

Cool! Thanks for the review! A couple of things: 1. “You can have no bank account with Bank of America at all and still get Preferred Rewards status”…not true. You must have a checking account with BofA to complete the package. The checking account can have just a few dollars in it (maybe even nothing), you just have to have a checking account open. Of course, it’s fee free with the relationship. At the bottom of this page has the info: https://www.bankofamerica.com/deposits/manage/understanding-preferred-rewards-requirements.go It says, “You maintain your Preferred Rewards status if you have an active, eligible Bank of America® personal checking account and maintain a three-month average combined balance in your qualifying Bank of America deposit accounts and/or your qualifying Merrill Edge® and Merrill Lynch® investment accounts of at least $20,000 for the Gold tier, $50,000 for the Platinum tier, or $100,000 for the Platinum Honors tier.” 2. “Just a quick thought of my own: If you have money in the VTI index, it looks to me that you’ll lose .11% on the $100k (or $110 per year) by purchasing these funds via Merrill Edge instead of purchasing Admiral Shares with Vanguard.”…VTI is the ETF. ETFs have the same ER (expense ratio) as the Admiral Share version of the Index Fund. So the cost is the same buying a Vanguard ETF at Merrill Edge or either the ETF or Admiral share fund at Vanguard (ignoring bid/ask spread). If you already have admiral shares at Vanguard, I believe they get converted to investor shares when transferred out (or at least, you can’t buy MORE admiral shares at ME). What I did personally was converted all my admiral shares at Vanguard to ETFs before transferring out my Vanguard assets to ME. The assets were transferred in-kind and cost basis was all transferred over accurately. 3. “Ensure that you aren’t losing under Merrill Edge compared to your previous brokerage institution”…it might be worth considering to go over the benefits of each tier of Preferred Rewards with having money at ME. For instance, at $100k+ level, you get 100 free trades per month. I say that because as I mentioned above, if you get the ETF version at ME instead of the admiral share version at Vanguard, it’s the same cost (minus bid/ask spread which you’ll get with Vanguard buying ETFs too). Only difference would be commission to buy/sell ETFs. But you get free… Read more »

Frito Pendejo
Frito Pendejo

So the only difference between this and the Cash card is this earns 1.5% base, but can only be redeemed for travel or gift cards at 1cpp, while the Cash card earns 1% base, but gives straight cashback.

So, I guess the Cash card is useless given that even with 75% bonus you are getting 1.75%, less than a 2% card.

I keep thinking about transferring my IRA to BoA to do the 2.6% TravelRewards, but the things stopping me are…
1) Almost nothing actually goes onto a 2% card, always meeting min spend or using 3%+ category cards
2) I don’t actually have any travel expenses, because of all the accumulated points from churning!

Kevin
Kevin

The Cash Rewards card isn’t useless at all (but might be for your personal situation). With the Platinum Honors tier ($100k+ in assets), you get 5.25% back on gas, 3.5% back at grocery stores and wholesle clubs (both categories up to $2500 per quarter), and 1.75% back on everything else. So the Cash Rewards card pairs up pretty nicely with the Travel Rewards card. Use the Cash Rewards for the category spending, then the Travel Rewards for everything else.

I hear you on the bonus spend though. You get way more value doing that all the time than this program, of course. But when you’re not meeting minimum spends for bonuses, this program/card combo is pretty tough to beat with $100k+ in assets with BofA/ME…

Tom
Tom

+1

Frito Pendejo
Frito Pendejo

Ah, yes, I forgot about the bonus categories! This would make it better than my Costco card for gas and costco purchases. Thanks for reminder

Kevin
Kevin

Pair the Cash Rewards card with the new upcoming Premium Rewards card with Platinum Honors status and you get 5.25% back on gas, 3.5% back on groceries, wholesale clubs, travel, and dining, and then 2.625% back on everything else.

Kevin
Kevin

Also, check this blog post out: https://thefinancebuff.com/best-visa-card-to-use-at-costco.html

Essentially states your same conclusion on comparing the Cash Rewards card with the Costco card. The Cash Rewards card is obviously what I personally use for Costco purchases (including gas at Costco).

madage
madage

Excellent point that the CR card bonuses gasoline purchases anywhere – no grocery store or warehouse clubs exclusions.

Lrdx
Lrdx

Also found the 123 card to be the best at Walmarts that code as grocery. Other banks tend to explicitly exclude Walmarts.

Victor
Victor

Just to clarify, you’re not limited to buying Merrill’s own funds. For those comfortable with buying stocks themselves, you can transfer your IRA/401k assets to Merrill Edge (get a transfer bonus) and then select a “self directed” account. The interface is quite user friendly, and you can just buy index ETFs like Vanguard total stock market (VTI) which has very low fees (0.05%). If you are preferred rewards status, you get 30 free trades per month, so there is no commission charge on buying the ETFs either.

Kevin
Kevin

.04% actually for VTI now (cost went down this year), same as the admiral share of this fund (VTSAX). You get 100 free trades at the highest tier ($100k+).

This program IMO is an excellent deal. A lot of people don’t know/understand all the details on it, it seems to me, and talk bad about it when not knowing all the details. The biggest misconception/argument I hear against it is the $100k in assets needing to be in a BofA checking/savings earning .01%. At least that mistake is finally being expressed more often now as false.

Jamie
Jamie

People should evaluate the incremental “earn” vs. a 2% cash-back card. How much un-bonused spend do you have that isn’t being used to meet min-spending requirements for other cards? $2k per month = $144 per year (.006 X $24k). The $100k balance requirement is a significant hurdle / pain point for many and the requirement to redeem points for travel to maximize value can be challenging too (if you already have points and miles accumulated from your other cards). If you have the Freedom Unlimited and one of the “premium” Sapphire (or Ink) cards, this probably isn’t worth while.

Tom
Tom

For people who MS for cash, the 2.63% cash back is incredible (and probably still very, very slightly below the interchange rates, so BOA might still be able to squeeze out an extremely small profit on your MS’ing, so they probably won’t care that much… they don’t care when I do it…)

Treesha
Treesha

DH can only handle carrying a card or two at a time in his wallet. This card lives in there unless there’s some minimum spending bonus that’s targeted with another card.

I find the travel category quite broad. Things that I’ve redeemed the points on:
– Groupon Getaway
– Purchases at Universal Studios Hollywood (hat, candy)
– Day tour companies
– Go Boston Card

I would never put flight or hotel purchases on this card because the travel insurance is practically nonexistent. But for everyday spending it is fantastic, and beats the CFU+CSR combo.

Tom
Tom

Agree 100%. I don’t know why people are hating on this card so much, it’s not as if it has an annual fee… it literally has the best sustainable cash back rate on unbonused spend out of any other credit card to my knowledge (excluding first year promotions, such as Discover IT Miles or Alliant)… Obviously some people prefer to earn points, and we get that, but for the people that prefer cash back, this card literally cannot be beat.

Chucks
Chucks

“If you have money in the VTI index, it looks to me that you’ll lose .11% on the $100k (or $110 per year) by purchasing these funds via Merrill Edge instead of purchasing Admiral Shares with Vanguard. ”

Help me understand your reasoning on this. I plugged in the two funds into this fee calculator from Vanguard: https://personal.vanguard.com/us/faces/JSP/Funds/Tools/FundsToolsEtfCostResultsContent.jsp

I assumed $100,000 was invested with expected returns of 10% and no commission fees. I think the only difference between the two funds was the fact that there’s a bid-ask spread for VTI of $0.01. The total difference over ten years was just $8.68- which seemed to occur just when buying and selling. Considering VTI hasn’t identically tracked VTSAX (looks like it’s outperformed it by 0.01%) it seems like any difference in fees is pretty negligible.

Kevin
Kevin

I pointed this out above (but nice to have backup 🙂 ). He seemed to be comparing VTI and VTSMX (the ETF vs investor share of Vanguard’s Total Stock Market fund) instead of comparing VTI and VTSAX (admiral shares), or comparing VTSMX and VTSAX. VTI and VTSAX both have an ER of .04%, while VTSMX has an ER of .15%, which makes the .11% difference he described in the post.

Shane

Does anyone know how qualification works with joint accounts? That is, how does the mix of joint accounts and individual IRA accounts qualify one or the other person for preferred status?

madage
madage

BoA does not household for PR status. I have PR status with ME balances. The joint checking account holder does not have PR status because the balance there is minimal and has no ME accounts.

Bo
Bo

Joint accounts count towards the balance of both account holders. E.g.
His IRA $X
Her IRA $Y
Joint account $Z

His qualifying balance $(X+Z)
Her qualifying balance $(Y+Z)

(Note it’s a 3 month running average updated monthly.)

cinelliman
cinelliman

This is correct – My spouse and I both have Platinum status on all cards based on household ML holdings (IRA’s, Roth IRA’s, and ML CMA)

Lrdx
Lrdx

Joint accounts do work – not just BofA deposits (why would you even use those..), but joint taxable investment account at ME as well. Individual investment accts, IRAs only get applied to the owner; you can have player 1 and 2 in different PR tiers.

Bo
Bo

Fwiw I have transferred Vanguard Admiral class shares into MEdge. There’s no cost to transfer, no cost to hold them there, I can reinvest dividends, and can sell shares (but mutual fund trades are $20, versus $0 FOR ETFS), but I cannot buy more Admiral shares. You can buy Vanguard Investor class shares, but then the extra ~0.1% expense ratio is an extra cost that may make it not worth it. If, like me, you strongly prefer to use Vanguard Admiral shares over ETFs, then you can still make ME/PR work if you are basically just parking your $100k holdings at ME, but you lose the ability to transact for free (or at all) compared to holding at Vanguard. So there is some opportunity cost, while the marginal cash back is not large as others noted above. I still do it though, since you also get brokerage bonus, and better shot at their credit card bonuses.

Frugal Professor

Are you sure about this? I had read on other sites that VTSAX must first be converted to VTI and then transferred over. I was under the impression that admiral shares could only be held within Vanguard, and that if you transferred out as mutual funds they became investor class.

Kevin
Kevin

Are you on Bogleheads? Your name sounds familiar. I don’t have first hand experience but I’m pretty sure the mega Bogleheads thread on this topic has some people saying that you can transfer Admiral shares to them and keep it as admiral but just can’t buy more.

Frugal Professor

I’m a longtime Bogleheads investor (going back >10 years since reading Bogle’s books and becoming a convert). Only recently have I started regularly visiting the forums and contributing there.

What I had read on Bogleheads prior is that people convert VTSAX to VTI first (and maintain the cost basis) without tax considerations.

I’m going to try to keep VTSAX because I prefer owning mutual funds over ETF’s (dividend reinvestment, partial shares, bid ask spreads, etc). Down the road if I leave Merrill Edge back to Vanguard I want to maintain the index fund rather than dealing with ETFs until I die.

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