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Credit cards let you borrow money up to a set limit for purchases, offering a cash-free and convenient way to pay. When used wisely, they can also help you build a strong credit history.
Among various credit card providers, Bank of America offers a wide range of credit card choices tailored to fit different consumer needs. From cashback rewards to travel benefits, Bank of America offers options designed to enhance your spending experience.
Choosing the right credit card for your needs is crucial. It involves considering factors such as interest rates, rewards programs, and fees that could impact your finances. Using credit cards responsibly—such as making timely payments, keeping balances low, and understanding your credit utilization ratio—can ensure that you harness the benefits of credit while avoiding potential pitfalls that come with debt.
Credit Cards by Type
There are a number of different types of credit cards available and understanding the various types can help you choose the one that best suits your financial needs and spending habits. Here’s an overview of some common categories of credit cards:
- Cashback Cards: These cards offer a percentage of your spending back as cash, making them ideal for everyday purchases. They typically have no annual fees and are straightforward to use.
- Rewards Cards: Similar to cashback cards, rewards cards accumulate points or miles for every dollar spent, which can be redeemed for various rewards like merchandise, travel, or gift cards.
- Travel Cards: Tailored for frequent travelers, these cards often provide benefits such as airline miles, hotel points, and no foreign transaction fees, making travel expenses more manageable.
- Balance Transfer Cards: Designed for individuals looking to consolidate debt, these cards often offer low or 0% introductory rates for balance transfers.
- Secured Credit Cards: These cards require a cash deposit that serves as your credit limit, making them an excellent option for consumers looking to build or rebuild their credit history.
Credit Cards Offered by Bank of America
Bank of America® Customized Cash Rewards Credit Card
- Cash Back
- 1-3%
- Annual Fee
- $0
The Customized Cash Rewards card allows you to modify your rewards categories each month up to $2,500 of combined purchases made each calendar quarter. See website for details.
- Variable APR: 18.74-28.74%
- $200 online cash rewards bonus offer
- 3% cash back in the category of your choice
BankAmericard® Credit Card
- Tap to Pay
- Yes
- Annual Fee
- $0
One of the greatest perks of this card is its 0% introductory APR that lasts for 18 billing cycles upon opening a new account. See website for details.
- Variable APR: 15.24-25.24%
- No Penalty APR
- Access your FICO Score
Bank of America® Travel Rewards Credit Card
- Points
- 1.5
- Annual Fee
- $0
Ideal for travelers who want to avoid an annual fee or those occasional travelers who only take a few trips per year and want to earn rewards on everyday spending, not just travel purchases. See website for details.
- Variable APR: 18.24-28.24%
- No foreign transaction fees
- 0% introductory APR for 15 months
Bank of America® Premium Rewards® Credit Card
- Points
- 1.5-2
- Annual Fee
- $95
The Bank of America® Premium Rewards® Credit Card is a good choice for those who prioritize earning rewards on their travel and dining expenditures. This card allows you to earn 2 points per dollar spent on travel and dining purchases, as well as 1.5 points for every other dollar spent on all other purchases. See website for details.
- Variable APR: 20.24-28.24%
- No foreign transaction fees
- 2 points per $1 spend on dining and travel
Bank of America® Customized Cash Rewards for Students Credit Card
- Cash Back
- 1-3%
- Annual Fee
- $0
The Bank of America® Customized Cash Rewards for Students Credit Card is specifically designed to cater to the needs of student cardholders, focusing on flexibility and rewards that align with their lifestyles. See website for details.
- Variable APR: 18.24-28.24%
- $200 online cash rewards bonus offer
- 3% cash back in the category of your choice
Before Choosing a Credit Card
Interest Rates
When selecting a credit card, understanding the various factors that influence your overall financial health is crucial. One of the most significant considerations is the interest rate, typically expressed as an Annual Percentage Rate (APR). The APR represents the cost of borrowing on the card, taking into account the interest charged on outstanding balances, expressed on an annual basis. If you carry a balance from one month to the next, a higher APR can lead to substantial interest costs, making it more challenging to pay off your debt.
It's essential to carefully review and compare the APRs of different credit cards, as they can vary widely. Some cards may offer a low introductory APR, which can be beneficial for making large purchases or transferring balances from high-interest accounts.
It’s important to consider the normal APR that will apply after any promotional periods; knowing this can help you assess the long-term affordability of using the card. It's also worth examining any fees associated with the credit card, such as annual fees or late payment fees, as these can further impact your overall costs. By understanding these elements, you can make an informed choice that aligns with your financial goals and spending habits.
Fees
Understanding the various fees associated with credit cards is crucial to managing your finances effectively. Here are the primary types of fees to consider:
- Annual Fees: Some credit cards charge an annual fee for the privilege of holding the card. While this fee can sometimes be offset by generous rewards or benefits, it’s essential to evaluate whether the costs justify the features you’ll use. Many cards, especially those aimed at students or budget-conscious individuals, do not charge an annual fee, making them more accessible.
- Balance Transfer Fees: If you plan to transfer existing debt to a new credit card, be aware that many cards impose a balance transfer fee, typically around 3% to 5% of the amount transferred. While this fee may seem low compared to potential interest savings, it’s crucial to factor it in when calculating the overall cost-effectiveness of the transfer.
- Late Payment Fees: Missing a payment deadline can lead to late payment fees, often ranging from $25 to $40. These fees can quickly add up, especially if you have multiple late payments, and may also result in an increase in your card’s APR, pushing your debt further out of reach.
- Foreign Transaction Fees: If you plan to use your credit card while traveling outside of the United States, be aware of foreign transaction fees. These fees typically range from 1% to 3% of the purchase amount and can significantly increase the cost of using your card abroad. Selecting a card that waives these fees can save you money when traveling.
- Cash Advance Fees: Should you need to withdraw cash using your credit card, you may incur cash advance fees, along with higher interest rates that apply immediately. Understanding these charges upfront can help you avoid unexpected costs.
Rewards Programs
When evaluating credit cards, one of the most appealing aspects to consider is the rewards program. Different cards offer various types of rewards, and it's essential to choose one that aligns with your lifestyle and spending habits. Here are the main types of rewards:
- Cash Back: Many credit cards provide cash back on purchases, effectively giving you a percentage of your spending back in cash. This format is straightforward and allows cardholders to enjoy the rewards as a direct reduction in their overall expenses. Typically, cash back cards offer a flat rate on all spending or higher percentages in specific categories, such as groceries or gas.
- Points: Points-based rewards programs allow you to accumulate points for every dollar spent. These points can often be redeemed for various things, such as merchandise, gift cards, or travel. It’s important to review how points can be redeemed and if there are any expiration dates or limitations, as this can affect their value.
- Travel Benefits: For those who travel frequently, credit cards that focus on travel rewards offer significant advantages. These cards typically allow you to earn points or miles for travel-related purchases, like flights and hotel stays, often at a more generous rate compared to everyday spending. Additionally, many travel rewards cards include perks like travel insurance, lounge access, and no foreign transaction fees, enhancing your overall travel experience.