Bank of America Premium Rewards Review: Impressive Travel Perks and Flexible Redemptions

You have to give Bank of America kudos for its to-the-point approach when naming credit cards. Its cash back card is the Bank of America® Customized Cash Rewards credit card. Its travel card is the Bank of America® Travel Rewards credit card. And its most feature-packed offering is the Bank of America® Premium Rewards® credit card.

The Bank of America® Premium Rewards® credit card combines the benefits of the other two cards and throws in some new ones for good measure. But it's also the only one of those cards to carry an annual fee. Let's see if you'll get your money's worth with our Bank of America® Premium Rewards® credit card review.

This credit card is a good fit for: Cardholders who travel often and want a straightforward, high-value rewards card. Those who have banking or investment accounts with Bank of America can earn more points through its Preferred Rewards program.

Features and benefits

While it's not the most feature-packed option, this rewards card has a balanced lineup of perks. Here's a look at what it offers and why it's especially useful for Bank of America loyalists.

A straightforward rewards card with a quality sign-up bonus

Bank of America keeps it simple with this card's rewards program. It earns:

• 2 points per $1 on travel and dining
• 1.5 point per $1 on other purchases

You get $0.01 per point no matter how you redeem them. If you have a Bank of America bank account, or a Merrill investment account, you could deposit your points as cash back there. You could use your points for bookings through the Bank of America Travel Center. Or, you could just use them as a statement credit on your credit card bill.

This card isn't the biggest earner, but it does have a competitive sign-up bonus. You earn 60,000 points after making at least $4,000 in purchases in the first 90 days. Since points are worth $0.01 each, the sign-up bonus is worth $600.

RELATED: The Ascent's Hub for the Best Credit Card Sign-Up Bonuses

Becomes much more valuable if you're a Preferred Rewards member

The Bank of America Preferred Rewards program makes a big difference in how much value you get from this card. The program is open to anyone who has at least $20,000 combined across Bank of America bank accounts and Merrill investment accounts. While it has lots of benefits, the relevant one here is a 25% to 75% credit card rewards bonus.

There are four tiers to the program. The table below has each tier of the program, the balance requirements, and the bonus amount. The sweet spot is a balance of at least $100,000, which gets you the maximum bonus of 75%.

If you don't mind saving or investing that much with Bank of America and Merrill, then this card becomes much better for earning rewards. You'll earn 3.5 points on dining and travel and 2.625 points everywhere else. I haven't seen any credit card that earns more than 2% on all your spending.

Statement credits will save you some cash, if you can use them

This card has two statement credits that could help you save on travel expenses:

• It offers up to $100 in airline incidental statement credits per calendar year. As far as what counts as an "airline incidental," Bank of America's examples include seat upgrades, baggage fees, in-flight services, and airline lounge fees.
• It offers up to $100 for Global Entry or TSA PreCheck application fees every four years. That's enough to cover the cost of either membership and to renew it.

Of the two, the Global Entry/TSA PreCheck credit is a fantastic perk, especially if you're a frequent flyer. The immigrations and customs process is much faster with Global Entry. It often takes less than a minute -- a whole lot better than standing in line. TSA PreCheck makes getting through airport security faster and less intrusive.

By the way, a Global Entry membership includes TSA PreCheck. So if you think you might want them both, go for Global Entry.

The value of airline incidental credits depends on your travel habits. If you pay these types of fees often, then getting up to $100 a year back is a nice benefit. But if you're good at avoiding airline fees, then this feature could be useless for you.

A full suite of travel and purchase coverages for protection and peace of mind

Travel is exciting, but there's also a lot that can go wrong. Your luggage could be delayed -- or end up on the opposite side of the world. You could go through a trip delay, or even a cancellation.

Everyone hopes not to experience any of these, but just in case, it helps to be prepared. This Bank of America card provides protection from all of those situations. On eligible bookings paid for with this card, it offers:

• Trip delay reimbursement
• Trip cancellation/interruption insurance
• Baggage delay insurance
• Lost luggage reimbursement
• Auto rental collision damage waiver

It also provides coverage for more than just travel. It also has purchase protection, extended warranty coverage, and return protection on eligible purchases.

Drawbacks to know about

For some people, this Bank of America card is going to be a perfect match. But if not, you're better off looking elsewhere, because it also has a few big limitations.

Lackluster rewards rate if you're not a Preferred Rewards member

Without the Preferred Rewards program, this card's rewards rate is nothing special. It effectively earns 2% on travel and dining and 1.5% on other purchases. Technically it earns points, but since 1 point is worth $0.01, we can just convert those to percentages to make it easy.

Those rates don't stack up well to the best credit card options. There are cash back cards that earn 2% back on purchases, with no annual fee. This Bank of America card costs $95 per year and earns less. There are also cards that earn 3% to 4% per $1 on travel and dining.

The Preferred Rewards program makes or breaks this card. If you're not a member, and you're not planning to be, I wouldn't get it.

Points offer limited value -- it's basically a cash back card

This Bank of America card has some travel benefits, but it's not really a travel credit card. Points have the same value of $0.01 apiece, whether you use them for cash back or travel.

Many travel credit cards let you transfer your points to airline and hotel loyalty programs. Then, you can use those points to book award airfare or hotel stays. It's a great way to get more value for your points. I often get $0.03 per point or more from my travel rewards by transferring them.

But Bank of America doesn't give you this option. You can't transfer your points anywhere. That's frustrating, because Chase, American Express, Capital One, and Citi all offer this. Even Wells Fargo has gotten in on the action. For that reason, this isn't a great choice as a travel card.

To apply for the Bank of America® Premium Rewards® credit card, you should have good to excellent credit, which coincides with a FICO® Score of 670 or higher. This isn't a hard-and-fast rule, but it gives you a much better chance of success. Reports indicate that it can also help your application when you have a banking or investment account with Bank of America.

The $95 annual fee is well worth it based on all the value you can get from the Bank of America® Premium Rewards® credit card.

If you can use the $100 airline incidentals credit every year, then that already covers more than what you pay for the annual fee. The $100 Global Entry credit is also worth $20 per year, raising this card's yearly value to $120.

There's also the value of the rewards you earn. You'll be up $600 after getting the sign-up bonus. For every $1,000 you spend on eligible travel and dining, you're earning $20 in rewards. The same amount spent on other purchases will get you $15 in rewards. Even with modest spending, your annual rewards will likely total much more than $95.

Learn more: Best No Annual Fee Credit Cards

If you're in the Preferred Rewards program, then the Bank of America® Premium Rewards® credit card is without a doubt the card for you. With that program's bonuses added in, the card's rewards rates will be too good to pass up.

For everyone else, it's still a solid card, but it may not be the right choice. You could most likely find other cards that will earn you more back. Keep looking at other credit card reviews for more options. Or, consider if you'd be open to banking or investing with Bank of America to qualify for its Preferred Rewards program.

Read more: Best Bank of America Credit Cards

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.