Bank of America Unlimited Cash Rewards card Review: Category-Free Cash Back

The Bank of America® Unlimited Cash Rewards credit card lives up to its name with unlimited 1.5% cash back on purchases. Add in a 0% intro APR offer and no annual fee, and you have a sound pick for your non-category purchases. Read our full Bank of America® Unlimited Cash Rewards credit card review for more info.

This credit card is a good fit for: Bank of America Preferred Rewards members who can maximize the cash back rewards.

Features and benefits

This card's rewards are excellent for upper-tier BoA Preferred Rewards members, but pretty unremarkable for everyone else. That said, the other perks, like the welcome bonus and intro APR offer, could still hold a lot of appeal for many folks.

Marquee feature: Excellent rewards for BoA Preferred Rewards members

From a rewards point of view, this cash back rewards card doesn't really stand out from the crowd for most people. There are a lot of 1.5% cash back cards out there, many of which have extra bone categories on top of the flat rate. Even if you just want flat-rate rewards, you can find some killer 2% cash back cards.

Everything changes if you have the savings to become a Bank of America Preferred Rewards member. Preferred Rewards members get boosted cash back on their BoA credit cards.

How much of a boost you get depends on your Preferred Rewards tier. These tiers are determined based on the total amount you have in your combined BoA savings and Merrill investment accounts.

Applying tier bonuses to the Bank of America® Unlimited Cash Rewards credit card's unlimited 1.5% cash back gets you:

• Gold: Unlimited 1.87% cash back
• Platinum: Unlimited 2.25% cash back
• Platinum Honors: Unlimited 2.62% cash back

For the folks who can manage to reach Platinum Honors, the boosted rewards turn the Bank of America® Unlimited Cash Rewards credit card into one of the best flat-rate rewards cards I've ever seen.

READ MORE: Best Rewards Credit Cards

Another reason to sign up: Competitive $200 cash rewards welcome bonus

Whether you're a Preferred Rewards member or not, the welcome bonus could be enough reason to get a new Bank of America® Unlimited Cash Rewards credit card.

Sure, $200 is a pretty standard welcome bonus in the no annual fee card world. But it's still $200, and you don't even need to reach an absurd spending requirement to earn it. While some cards will want $1,500 or more in spend, the Bank of America® Unlimited Cash Rewards credit card requires a very reasonable $1,000 in the first 90 days. Divide that spend by 12 months, and it shouldn't be too hard to reach organically.

READ MORE: Best Sign-Up Bonus Credit Cards

Icing on the cake: 0% intro-APR offer for 15 billing cycles

I call this the icing, but it could really be the main drive for the right cardholder. The Bank of America® Unlimited Cash Rewards credit card has a competitive intro-APR offer that gives you 15 billing cycles of 0% interest on purchases. (Then the go-to 18.24% - 28.24% (Variable) APR applies.)

Zero-interest offers are a fantastic way to pay for larger purchases over time. Normally, carrying a balance on a credit card is ridiculously expensive because of the interest fees.

With a 0% APR offer, as long as you make at least your minimum payment on time every month, you won't accrue any interest fees on your purchase balance until the offer period ends.

For instance, say you need to buy a $5,000 furnace in the middle of winter on the house you bought six months ago. (Just, you know, hypothetically.) Since your cash went to the new house, you need to finance the purchase. If you charge it to your brand-new BoA card with its 0% APR for 15 billing cycles, you could pay just $350 a month and pay off the furnace before your offer ends.

Drawbacks to consider

This card has some quirks that mean it won't be right for everyone -- or even most people. Make sure you think about these downsides before applying.

The big problem: Rewards are lackluster without lots of money

The long and short of things is that flat-rate 1.5% cash back, without any other categories or perks, is simply not competitive these days. And that's true no matter how you look at it:

• If you want a one-card wallet, get an unlimited 2% cash back card, or a 1.5% flat-rate card that also has useful bonus categories.
• If you want a card to cover non-category purchases as part of a larger strategy, again, you're going to want a 2% (or better) flat-rate card.

The only way the Bank of America® Unlimited Cash Rewards credit card stands out from the competition is if you have Platinum or Platinum Honors Preferred Rewards status. This qualifies you for the rewards boost.

Unfortunately, not only would this require that you have $50,000 -- which I do not -- but you need to have that $50,000 in a BoA savings account and/or Merrill investment account.

Everything else aside, BoA savings accounts aren't good places to put a lot of savings. They have a terrible APY (even with Preferred Rewards status) that's a teeny fraction of the best high-yield savings accounts.

Learn more: The best high-yield savings accounts

This leaves investments. Merrill is a well-respected and well-rated brokerage, so you could certainly do worse than open a Merill investment account. But whether you want to move money from your current account to earn extra credit card rewards has to be a personal choice.

A 3% foreign transaction fee makes this a bad card for travelers

Even assuming you have the Preferred Rewards status to make this card worthwhile, there's another huge downside to note: the foreign transaction fees. The 3% foreign transaction fee applies to any transaction that occurs in a foreign currency or that routes through a foreign bank.

In other words, if you travel abroad with this card and make a purchase, you'll be charged an extra 3% of the transaction every time. You don't necessarily need to travel, though; certain online purchases (such as from marketplace sites) may also go through foreign banks in some cases.

That awesome 2.62% cash back rate you get with your top-tier status? Yeah, even that isn't enough to break even on a 3% foreign transaction fee. Without status, you'll only earn 1.5% cash back on a purchase with a 3% fee, so it'll cost you 1.5% every time you make a purchase abroad.

If you travel a lot but want to take advantage of Preferred Rewards status, consider picking up a secondary travel rewards card. This can help you avoid foreign transaction fees abroad while letting you still keep your BoA card for domestic purchases.

Learn more: The best travel rewards cards

The Bank of America® Unlimited Cash Rewards credit card is intended for cardholders with at least good credit, which typically means credit scores of 670 or better. Bank of America will look at your entire credit profile when evaluating your application, not just your credit scores. So, you could potentially qualify with a lower credit score, but you'll have the best chances of approval if you have a good to excellent credit score.

Unlimited cash back rewards are always useful, and the Bank of America® Unlimited Cash Rewards credit card pairs them with a generous intro APR offer and a competitive welcome bonus. But the real winners with this card will be Preferred Rewards members who can boost their cash back with the bonus rewards offered to members.

That said, unless you're a Preferred Rewards member, this is a pretty typical unlimited cash back card with little to make it stand out from the crowd. Other credit cards have higher unlimited rates or bonus rewards on certain purchases that may be far more lucrative for regular cardholders.

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.