Merill/BofA Premium Rewards program change

msf

Based on combined balance in Merrill and BofA, one can get fairly lucrative cash back rates on BofA credit cards. On May 27, the program will be rebranded BofA Rewards.

Under the current program, you get a 50% boost in cash back with $50K combined balance, and 75% cash back with $100K+. That brings the base rate of 1.5% cash back up to 2.25% and 2.625% respectively. Even better with cards that have starting rates of 2% or 3% cash back (before boosts) in certain categories.

Starting in May, the thresholds are increased. You'll need $100K balance to get a 50% boost, and $1M to get the old 75% boost. Below $100K won't seem worthwhile except for special categories, as 1.5% will get boosted to just 1.875%, less than cards like Fidelity's pay.

So if you're not already using Merrill for this program, the changes are not likely to entice you despite some other sweeteners. And if you are using Merrill but haven't reached the 6 figure level, you might consider consolidating elsewhere or increasing your Merrill balance. For those over $100K, the added sweeteners include a monthly credit ($8 or $15) against streaming services or news subscriptions.

Here's the best writieup I've found, from The Points Guy:
https://thepointsguy.com/credit-cards/bank-of-america-new-rewards-program/

One feature of the BofA cards that I like is the very broad definition of "travel". It even includes rent and HOA fees paid through a property management company. Here's how BofA travel stacks up against the travel category for other credit cards:
https://www.nerdwallet.com/credit-cards/learn/credit-card-issuers-define-travel

a2z

is the HOA covered under 'real estate agent' category?
w/out explicit details, this looks like a 'gotcha', which is why i dont bother much except uniform cash back. (recently, my amex had rewards for all internet fees...except google fiber. not the first time for such chicanery.)

msf

"rent and HOA fees paid through a property management company"

Property management companies usually code their charges as mcc 6513. That's included in BofA's travel category. The property management companies often outsource their financial management services, including billing, to companies like buildium and appfolio. These charges are also coded 6513.

I can confirm this based on personal experience paying "common charges" to two property management companies. A problem is that you may be charged a "service fee" for paying by credit card. I've been charged a modest flat fee and a barely legal 2.99% fee (see, e.g. buildium's fee)

To make the latter work, you need a credit card that pays at least 3%. BofA's customized cash reward card, if used for travel, pays a 3% base rate plus any boost based on level of assets at Merrill/BofA. But that is limited to $2500/quarter. Still, that should work for many people. (Side note: this is the card that the old Schwab 2% cash back card turned into.)

Alternatively, BofA's premium rewards card ($95 annual fee) pays a 2% base rate on travel, which can get boosted to 3% (50% boost) or 3.5% (75% boost).

Regarding chicanery, the banks' reward rates depend on the MCC coding that the vendor uses. Google may be using some code based on its main service rather than coding its internet service charges separately. I agree that it is annoying to say the least to discover that something isn't counted the way you expect.

So far, the worst offender on the banking side IMHO is US Bank. It has a very narrow list of charges it counts as travel (e.g. excluding airline tickets or hotel reservations made through agencies like Expedia). And it doesn't clearly document what it covers; it just says that its travel category includes charges such as... But on what it does cover (mass transit, cabs, directly booked hotels/flights, gas) it pays a rich 4%.

Mark

Where do Airbnb or vrbo charges fall in that bowl of mush? What if you rent someones home or property that is not affiliated with those organizations?

msf

I don't know for sure (no personal experience). Here's what NerdWallet says on the page cited above on what qualifies as travel:

Real estate agents (MCC 6513). Mastercard’s rules define this as “fees charged by merchants engaged in the rental and management of residential and commercial properties, such as real estate agents, brokers, and managers, and apartment rental services.” This includes fees to rent rooms through Vacation Rental By Owner and its parent company, HomeAway. Airbnb, however, generally counts as a hotel or motel.

davidrmoran

Off topic, Fidelity Elan's 2% from everything is hard to beat, but to repeat myself, anyone who has Verizon for cellphones / Fios (cable TV, Internet) really must get the Vz card which applies 4% of all food and dining (plus gasoline) purchases to your cell bill. Both cards no-fee.

a2z

jealous of many fidelity perks , in permanent vanguard golden handcuffs.
attempted to move all assets in ~2022.

msf

davidrmoran said:

Off topic, Fidelity Elan's 2% from everything is hard to beat, but to repeat myself, anyone who has Verizon for cellphones / Fios (cable TV, Internet) really must get the Vz card which applies 4% of all food and dining (plus gasoline) purchases to your cell bill. Both cards no-fee.

Not really off topic. Merrill/BofA is changing terms on its credit cards soon. This will make it somewhat harder for the BofA cards to beat Fidelity's (or Wells Fargo's, or Navy Fed's or ...) 2% cashback card. I just sent Fidelity comments to that effect today in answering a survey about why I was moving some assets to Merrill. If Fidelity would boost their cashback rate a bit, or create some sort of loyalty program, they could be quite competitive.

Under the existing Preferred Rewards plan, $50K at Merrill gets you 2.25% cash back on everything on their Unlimited Cash Rewards card. The threshold is changing to $100K in May, giving Fidelity an opening to compete. Cashback rate rises to 2.625% if you keep $100K with Merrill now. But for that rate you'll need to keep a cool million at Merrill/BofA come May.

Once one starts looking at limited category cards, it becomes an optimization problem - which cards maximize your cashback subject to the constraint that you don't want more than X cards. What is best varies radically from person to person.

Fios (cable TV, Internet) Don't forget landlines.

linter

i also keep money at boa/ml so i don't get hit with banking fees. i need to look to see how much is required for that and perhaps i'll move the rest to my existing fidelity account.

also, does this bother anybody? "4. Elan Financial Services provides zero fraud liability for unauthorized transactions. Cardmember must notify Elan Financial Services promptly of any unauthorized use. Certain conditions and limitations may apply."

at boa, i've had fraudsters use my card and been instantly taken care of, with the swiped money happily replaced without issue.

msf

It looks like fees will continue to be waived for "Preferred Plus" or greater in the new program. That's $30K+ in combined balances. Under the current Preferred Rewards program, one needs to be at the Gold level, $20K+

Virtually all credit cards require prompt notification of unauthorized use. Some banks are more aggressive in their fraud detection, often denying charges that they consider suspect. (BofA is especially aggressive; it once denied a $300 charge for a car repair I had performed at a service station.)

Obviously if the charge doesn't go through you're not liable for it. The flip side is that aggressive fraud detection means having to contact the bank to let a valid charge go through. Regardless, if a fraudulent charge is processed, you're liable if you fail to notify the bank "promptly".

https://www.bankrate.com/credit-cards/advice/know-your-rights-credit-card-fraud/#reporting

linter

thanks much, msf, appreciate the help, greatly. as re: promptly notifying: i guess this means i should be looking at my statements each month more often; i've always relied on BoA's team to do the detecting but who knows how many have gone unnoticed by either of us over the years?

Anna

From bankrate:

Many credit card issuers offer zero-liability fraud protection if you report unauthorized charges within 30 days, meaning you won’t owe anything. Under the Fair Credit Billing Act, your liability is capped at $50 if you report the fraud within 60 days of receiving your credit card statement (which means that even if your credit card issuer doesn’t offer zero-liability protection, you won’t owe more than $50). However, if you miss these deadlines, you may be responsible for the full amount.

Know your rights when facing credit card fraud

This was written in September 2025 so if nothing has changed (can't count on it anymore), fraud, if reported in 60 days, won't cost more than $50. (Of course, could get expensive for multiple rapid frauds.) I think most of us check our CC accounts more often than 60 days. My main cards are with BoA and it would be a lot of work to change it since I have a lot of autopays set up.

msf

Getting back to combined balance requirements ...

I had not realized that unlike other brokerages with tiers of benefits, Merrill does not household accounts. If you and your spouse have IRAs there, they don't add together to qualify for a higher tier.

Though if you have a joint account, that counts for each of you. That is:
Spouse 1: Joint balance + IRA balance 1
Spouse 2: Joint balance + IRA balance 2