Bank of America is stepping up its game in the travel rewards credit card competition, revealing its new Premium Rewards card, which will launch in September, the Wall Street Journal reported this week.
The bank, the second-largest in the US by assets, has largely avoided the fierce battle for young, affluent credit card holders that has raged the past year since JPMorgan Chase unveiled its heralded Sapphire Reserve card.
Since the Sapphire Reserve’s release last August, other competitors like American Express and Citi have tweaked their upper echelon reward card offerings to compete — even as the early returns suggest Chase may be struggling to make money off its blockbuster card so far.
The pitfall of offering such lucrative rewards — Chase was handing out 100,000-point sign up bonuses before it slashed that down to 50,000 earlier this year — is it’s tough to make money if customers stick around only long enough to reap the bonuses. Churners don’t make for good business.
So how is Bank of America distinguishing its Premium Rewards card? For starters, it will have a lower bonus, lower minimum-spending threshold to earn that bonus, and lower annual fee.
But perhaps more importantly, the points cardholders will earn directly correspond with how much money they have at the bank, rewarding those enrolled in their Preferred Rewards program who have deeper ties and are less likely to cut and run.
BI Intelligence’s Jaime Toplin explains:
“At its base, consumers get two rewards points for travel and dining, and 1.5 for everything else — a platform similar to ‘mass-market’ cards, according to the WSJ. But…