The 1,000% cash back credit card that no one ever talks about (or, an easy way to make $100 a year)

The 1,000% cash back credit card that no one ever talks about (or, an easy way to make $100 a year)

OK, so I admit the title may be slightly misleading (is this what the kids are calling “clickbait” these days?)

While this is technically correct, it does take some explaining. Several years ago, Bank of America launched the Better Balance Rewards credit card, a card presumably intended to reward people for managing their credit better (certainly a big issue in America). The premise is pretty simple: For every quarter (three statement periods) in which you make more than the minimum payment on your balance in every month, you get $25 (and $30 if you have a Bank of America checking account).

Well, if you’re one of those people who already manages their credit responsibly and pays their balance in full every month, you may be wondering why this is of use to you. Well, the good news is that everyone is available to earn this bonus, and all you have to do is charge $1 to your card every month and pay that dollar off by the time your statement is due (it may be possible that you can get it for charging even less than $1, but I haven’t chanced it and haven’t found reports of other people doing it either).

In other words, if you charge $1 every month for three months ($3) to this card and have a Bank of America checking account, you’ll get $30, or 1,000% cash back. Of course, this isn’t a truly 1,000% cash back card as the reward is fixed. If you charge $30 in it to three months, it becomes a 100% cash back card. If you charge $1,000 to it in three months, it becomes a 3% cash back card, and so on. In other words, I wouldn’t recommend charging any more than you have to. If you’re worried you might forget to manually make a charge every month, you might consider using this card to make automatic payments on a utility bill every month so you don’t have to think about it. Just make sure you also set up automatic payments to pay the balance in full on your credit card!

The credit will usually post a few days into the statement period following the third month:

bbr

However, as Bank of America continues to impose all sorts of fees on their checking account customers without offering competitive interest rates, it’s more likely than not that like me, you’ve switched away from your Bank of America account that you opened up your freshman year of college (if you even did open up one). If this is the case, it will yield $25 for you every three months, or $100/year. If you’re looking for ways to make $100/year with minimal effort, it’s hard to beat this (on the contrary, to earn $100 in interest from your checking account, you’d have to keep $10,000 in it for a whole year at 1% APY, or $1,000,000 at 0.01% APY, which is closer to the rates most banks are offering these days).

If you really want to get as much out of this as possible and open up a Bank of America checking account to get the extra $5, you can avoid the $12 monthly fee by either having an average daily balance of $1,500 or more, monthly direct deposits of $250 or more, or being a Preferred Rewards client (which requires 3-month combined average balances of at least $20,000 between your Bank of America checking account and Merrill Lynch/Merrill Edge investment accounts). For most people (including me), this isn’t worth the effort.

I honestly don’t know why Bank of America would offer a credit card that allows it to lose so much money from their customers who use credit responsibly (and it’s possible they may discontinue it if they’re losing more than they’re making), but in the meantime, I’m not complaining. While $100/year may not seem like much, at this rate, if I hold on to it until I die, that’s an extra $7,000 or so I’ll make (of course, whether credit cards will be around in that many years is another story for another post).

Have questions about something here? Feel free to e-mail me or post in the comments below.

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