Posted by William Charles on July 27, 2017
Credit Cards

Published on July 27th, 2017 | by William Charles

114

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

This card is now live and available for sign ups, more information here.

[Update 7/27/17: Reposting since we heard from a reliable source that BofA will be releasing a premium card. It’ll be a Visa Signature with a minimum credit line of $5,000. Roll out of the card is expected to be some time near the end of 2017. It’s also important to note that at this stage our reliable source has just confirmed a premium card will enter the market and not any of the benefits/fees/points structure listed below.]

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!



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Justin
Justin

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
TomTX

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

Frank
Frank

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
Bob

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
Frank

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
Fork

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

JC
JC

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
Eric

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
DSP

@ 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
DSP

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

Scratch that. Make that, per MONTH.

Frank
Frank

@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
Eric

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
Eric

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
Frank

@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
calwatch

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.

Tom
Tom

Rather than argue over who has 100k+ to invest or who is or isn’t an active trader, I’m going to share a few of my major criticisms over the Merrill Edge trading platform. If you truly are an active trader, these will be major concerns of yours:

1) Platform uses Java to run in your web browser; there is no standalone executable application like most brokers, thus the performance of the platform is very sluggish and often has a laggy feel to it, even with a high performance machine.
2) The order entry screen is very slow and cumbersome, in my opinion. There is no level 2 order entry ability, so it makes it difficult for active traders to jump in and out of trades quickly.
3) MAJOR GRIPE: They do not support “bracket” orders (ie. you cannot set both a stop and a target limit order at the same time, you can only have one OR the other). Most major brokers these days support bracket orders. I assume many people on this site like to automatic and set-and-forget everything, including their investments, but you cannot do this will Merrill Edge… you can use a protective stop or set a target limit sell order, but not both.
4) Expensive margin interest rates (IB is much, much lower).
5) Order execution can often be very slow, “costing” you hidden fees in the form of order slippage on market orders or simply not getting filled on limit orders because it processes too slowly.

That being said, I’ve exclusively used Merrill Edge for over a year, and I still use them today, primarily due to their 100 free trades per month and their very good market research. However, I no longer rely on them exclusively…. I’ve transferred about half my assets to Interactive Brokers for my active short-term trading (IB does not have any of the above problems) and I use Merrill Edge for my long-term buy and hold stocks, where the above factors don’t come into play as much. It is definitely a good broker for long term investments, IRAs, etc…. but for an active trader, you’re going to get very frustrated if you use it exclusively, trust me.

atomic
atomic

It offers 30 free trades a month if you have 50k in your account. If you trade more than that your an anomaly also most people do not trade on margin. And most people who trade on margin and trade more than 30 times a month are going to go broke in the long run.

So for vast majority of people Merrill Lynch will be cheaper.

shaun
shaun

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
Frank

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
shaun

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
calwatch

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.

rajansv
rajansv

I think Costco 2% back on Executive membership is not on Gas purchases. Happy to be corrected. 5.25% is only little more value than 5% rotating you may get for Gas or Wholesale club purchases on many cards. I buy costco cards when Freedom would give me 5% on Wholesale clubs and use it for my gas. I can redeem them at 7.5% with CSR.

2.65% on all (unbonused) purchases is still attractive. 5.25/2.65 will be of more attractive if that can be redeemed with the new *leaked* card at 1.5x. Wishful thinking I guess….

Credit
Credit

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.

ihg newbie
ihg newbie

no one gives a shit about your political opinion. politics has nothing to do with this discussion so go some where else and troll.

LC
LC

yeah have to agree with ihg, NOBODY CARES. Cya Shillary

Mike L
Mike L

+1

Ea
Ea

I voted for Trump AND I have two BoA cards. I guess I’m as stupid as they come.

TrumpSux
TrumpSux

Are you tired of all the “winning” yet? Is everyone mining coal now? Oh wait…what happened in the last job report….Fail Bigly

Dan
Dan

it kinda of surprises me when i come across a liberal on a blog like this. shouldn’t you be busy marching across Washington in your pink p*ssy hat or engaging in other very serious, constructive, and meaningful action like that??

WR
WR

You have a very sad obsession with Trump. You can’t make any comment on any travel/credit card blog without bashing him. We get it, you’re a leftist. Move on with your life. Nothing in your day to day life is different than it was 6 months ago. By the way, plenty of stupid people voted for Hillary too, yourself included I’m sure.

Frito Pendejo
Frito Pendejo

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

MoreSun
MoreSun

Here, here!!

MarcoPolo
MarcoPolo

Totally agree.
I can’t have another CSR so a “clone” will do just fine 🙂
Competition is good for us.

James C.
James C.

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.

Fork
Fork

That bull card is by far my favorite design of all my cards I have.

Bob
Bob

merrill+ card is one of the prettiest plastic cards I’ve ever seen. Much prettier than the boa cards (cash/travel rewards).

DGS
DGS

I concur! BofA does have some fugly credit cards! Even the default red debit card is fugly!

Bob
Bob

My favorite debit card is chase’s disney card. lol

DGS
DGS

The Chase default debit card looks nice while PNC has that piss burnt ugly orange debit card.

MarcoPolo
MarcoPolo

I hate Amex Credit Card design.
All Blue cards looks same.

projectx
projectx

Coming soon: more lounges leaving the Priority Pass program.

Charlie
Charlie

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.

Eric
Eric

CSR will always be my favorite travel card 🙂

NinjaX
NinjaX

stop being ridiculous man. CSR hasnt even been around a year and you already think its the best CC?

Eric
Eric

I said it’s my favorite card. You’re entitled to your own opinion.

MarcoPolo
MarcoPolo

I don’t like metal cards.
They just add weight to my wallet.
Unless they can stop a bullet.

Eric
Eric

See if you can ask if they make a plastic version! I think for CSR they do :)!

I_Keep_My_Cards_In_A_Safe
I_Keep_My_Cards_In_A_Safe

Yes. You can private message them for a plastic version.

Bob
Bob

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

MarcoPolo
MarcoPolo

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

Rick
Rick

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

NinjaX
NinjaX

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…

DSP
DSP

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

jf
jf

even the venture had that, but it doesnt make it a great card.

DSP
DSP

Sure it does.

Jeff
Jeff

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.

Dee
Dee

Dead on Ariival!

Rob Arias

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.

Ea
Ea

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.

Max
Max

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

Doesn’t this describe everything from BoA?

Fred
Fred

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

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