Bank of America Premium Rewards vs. Chase Sapphire Preferred

Despite its name, the new Bank of America® Premium Rewards® credit card isn't exactly on the level of premium cards such as The Platinum Card® from American Express or the Chase Sapphire Reserve®, which come laden with extra perks but also carry annual fees in the hundreds of dollars. Its closest competitors are on the next tier down. And the best-known of those competitors is the venerable Chase Sapphire Preferred® Card.

Deciding between two rewards credit cards often is just a matter of comparing the rewards you'll earn on each. But the Bank of America® Premium Rewards® credit card and the Chase Sapphire Preferred® Card are similar enough that perks and features beyond rewards rates could tip the scales. Want points you can transfer? Want your checked-bag fees covered? Your answers to such questions will guide your decision.

That said, if you have significant balances in checking, saving or investment accounts at Bank of America® and Merrill, your choice gets a whole lot easier, since the Bank of America® card offers generous bonuses.

Annual fee

It costs the same to carry either of these cards. However, the Bank of America® Premium Rewards® credit card gives you travel credit that, if you use it, more than makes up for the fee every year. The Chase Sapphire Preferred® Card does offer a $50 credit each year on hotel stays booked through Chase plus a 10% anniversary bonus, which can help to make up the annual fee.

Rewards rates

If you spent the same amount on each card, the Bank of America® Premium Rewards® credit card would give you a higher number of points because you get an extra half-point for every dollar spent on something besides travel and dining.

However, points on the Chase Sapphire Preferred® Card are worth 1.25 cents apiece when you redeem them for travel booked through Chase, while points on the Bank of America® card are worth 1 cent apiece regardless of how you redeem. Assuming you redeem at 1.25 cents a point, the effective rewards rates for the Chase card are:

• 6.25% on travel purchased through Chase.

• 3.75% on dining, select streaming services and online grocery purchases.

• 2.5% on all other travel.

• 1.25% on everything else.

If you're a member of Bank of America® Preferred Rewards, however, everything changes. More on that in a bit.

Transfer partners

Chase allows you to transfer your points on a 1:1 basis to a variety of airline loyalty programs including Air France/KLM, British Airways, Singapore Airlines, Southwest, United and Virgin Atlantic and hotel programs like Hyatt, IHG and Marriott.

The Bank of America® Premium Rewards® credit card offers no such transfers.

Travel credits

The Bank of America® Premium Rewards® credit card gives you up to $100 in statement credit for incidental airline fees such as checked bags, seat upgrades, in-flight food and beverages, and lounge passes. Earn the full credit — which you could do on a single round trip with two people each checking a bag each way — and the card effectively pays you $5 a year after the annual fee. The Bank of America® Premium Rewards® credit card also reimburses you up to $100 every four years for the application fee for TSA PreCheck or Global Entry program.

The Chase Sapphire Preferred® Card does not offer these benefits. However, it does offer a $50 statement credit when you book a hotel through Chase. You also get free DashPass food delivery benefits on eligible orders for at least 12 months (and a maximum of 24 months) after activation.

Preferred Rewards program makes a big difference

The secret weapon of any Bank of America® credit card is the bank's Preferred Rewards program. If you are a Bank of America® customer with at least $20,000 in combined balances in checking, savings or investment accounts with Bank of America® or eligible Merrill accounts, you earn bonus rewards:

If you're not a Preferred Rewards member, your effective rewards rates on the Bank of America® Premium Rewards® credit card are the standard 2% for travel/dining and 1.5% for everything else. At Preferred Rewards' Gold level, those rates rise to 2.5% and 1.875%, respectively. At Platinum, they're 3% and 2.25%. At Platinum Honors, they're 3.5% and 2.625%.

Bottom line: If you're a Preferred Rewards member, the Bank of America® Premium Rewards® credit card is your winner.

Making the choice