There was an excellent thread on FWF about the BofA Preferred Rewards Program originally started by Derek Zoolander. This thread should be a continuation of that discussion. The text version of the thread is archived here:
Bank of America Preferred Rewards Information.
Below is information pasted from the quick summary:
Assets that count are anything that shows up in the single login page when you open up bankofamerica.com, including assets held in a Merrill Edge account. Merrill Edge offers a bonus for moving money there, in addition to letting you hold Vanguard funds and ETFs.
The “MM interest boost” is a % increase on the APR. So if the APR is .01%, a 20% boost is only to .012%. The boost is phrased as it will be “at least” the boost amount. The current rates are significantly higher than the boosted ones, although still pathetically low compared to an Internet-only bank.
“You qualify for benefits in the Preferred Rewards program if you enroll in the program, have an active 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. For details on Employee qualification requirements, please visit the Employee Banking & Investments website. . . . … Merrill Lynch Wealth Management clients with greater than $250,000 in assets with Bank of America and Merrill Lynch are eligible for additional banking benefits. Please speak with your Merrill Lynch Financial Advisor for details.” http://www.merrilledge.com/pricing
If one decides to join the program and are bringing money in to qualify, the optimal strategy is to get the Cash Rewards card early, but not to redeem the points earned until you qualify for the bonus rates. Thus, you can start benefiting from the high rates of return (as high as 5.25% on gasoline) earlier while waiting for your three month average to reach the qualifying levels.
The Travel Rewards card combined with the highest tier provides the highest unbonused spend of any generally-available card, and has no AF and no FTF to boot. If you have the Platinum Honors tier, the TR card becomes a 2.625% card on every purchase.
The AAA cobranded card only provides the bonus on the base spending of 1 ppd, but it still does get you to 3.75/2.75/1.75, with the 3.75 on travel, making that a lucrative choice if you are OK with the risk that redemption value for AAA points may change.
They are advertising $100 bonus on the Cash Rewards card after you spend $500. However, if you qualify for the preferred status, the bonus percentage is applied to this amount. If you get Platinum Honors status, the actual bonus is $175 for spending the first $500.