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,theWall Street Journal reported this week.The bank, the second-largestin the US by assets, has largely avoided the fierce battle for young, affluentcredit 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 competeeven as the early returns suggest Chase may be struggling to make money off its blockbuster card so far.The pitfall of offering such lucrative rewardsChase was handing out 100,000-point sign up bonuses before it slashed that down to 50,000 earlier this yearis it's tough to make money if customers stick around only long enough to reap the bonuses. Churners don'tmake 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 havedeeper tiesand 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 elsea platform similar to 'mass-market' cards, according to the WSJ. But the firm also has a tiered system in place, where consumers with active BofA accounts can get higher rewards based on their account balances, with totals of up to 3.5 and 2.6 points, respectively, available to consumers. This system could help the card attract and incentivize lucrative customers without sacrificing mass appeal, ultimately broadening its user base."Here's a look at how Bank of America's new card compares with the Sapphire Reserve and other competitors in the premium credit card rewards space.Note: Card benefitslisted are not exhaustive1. Bank of America Premium RewardsAnnual fee: $95Sign-up bonus:50,000 pointsSpending required for sign-up bonus: $3,000Points per dollar spent (tiered system based on how much cash youhave deposited or invested with the bank): 2 for travel/dining, 1.5 for all other purchase (Less than $20,000 deposited) 2.5 for travel/dining and 1.875 on all other purchases ($20,000 to 49,999 deposited) 3 fortravel/dining and 2.25 on all other purchases ($50,000 to 99,999 deposited) 3 fortravel/dining and2.25on all other purchases (More than $100,000 deposited)Other perks: $100 travel credit for airline travel expenses (like baggage fees;doesn't include airfare) $100 application credit for Global Entry/TSA PreCheckChase Sapphire ReserveAnnual fee:$450Sign-up bonus:50,000 pointsSpending required for sign-up bonus:$4,000Points per dollar spent: 3for travel/dining, 1 for all other purchaseOther perks: $300 credit for travel expenses $100 application credit for Global Entry/TSA PreCheck Priority Pass airport lounge membershipCiti PrestigeAnnual fee:$450Sign-up bonus:75,000 pointsSpending required for sign-up bonus:$7,500Points per dollar spent: 3for travel, 2 for dining, 1 for all other purchaseOther perks: $250 credit for airlineexpenses Book four nights at a hotel, and Citi will comp the fourth night $100 application credit for Global Entry/TSA PreCheck Priority Pass airport lounge membershipSee the rest of the story at Business Insider
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