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To anyone who wishes to simply not have to deal with airline miles earned on credit cards ever again, here's a great option I found: if you have $100k+ across c
by whitepoplar 8y ago
To anyone who wishes to simply not have to deal with airline miles earned on credit cards ever again, here's a great option I found: if you have $100k+ across checking + investment accounts at Bank of America + Merrill Edge (their low-cost brokerage arm) you get...
1) 2.625% cash back on BofA's Premium Rewards/Travel Rewards credit card. No messing around with airline miles. Just buy whatever ticket you want. Or, you know, pocket the cash.
2) 5.25% cash back on BofA's Cash Rewards card for "online purchases," up to $2500 per quarter.
3) 100 free trades per month at Merrill Edge. You're not locked into any fund companies and can buy whatever you want. I buy-and-hold Vanguard ETFs.
4) Free BofA checking account, with unlimited ATM rebates + a free safe deposit box. It pays negligible interest, so you may want to use another checking option if you hold larger cash balances, but it's helpful to have around just in case you need a physical branch for anything.
It's really a great deal, and it's wonderful to never have to think about the "gotchas" of redeeming airline miles.
- deleted 8y ago[deleted]
- lotsofpulp 8y agoIf too many people start taking advantage of this, they might reduce the benefits, so might be good to keep it to yourself.
- selectodude 8y agoAlso you have to have over $100,000 in liquid assets, which isn't a particularly large group of people.
- whitepoplar 8y agoIRAs and taxable investment accounts count toward the $100k. I don't have any cash parked there. They also have levels below $100k, but they're not as good.
- loeg 8y ago(You're not disagreeing with GP. Stocks and mutual funds/ETFs are a liquid asset.)
- solarkraft 8y ago(I didn't know, I thought it meant cash)
- loeg 8y agoNo worries! https://www.investopedia.com/terms/l/liquidasset.asp https://www.investopedia.com/terms/l/liquidasset.asp
- sys_64738 8y agoBut this requires dealing with BoA who are a terrible company. No thanks.
- whitepoplar 8y agoCan't disagree with you on that one, but it is one of the best deals for consumers. My consolation is that BofA isn't making much money off of me, and for customers with higher $$ the service is actually pretty good.
- sys_64738 8y agoI confess I have a BofA account or two but they're really invasive with there so-called updating of personal details. Demanding to know which countries you're a citizen of and I've read cases where they freeze the accounts until they comply. Reading about that caused me to open a couple of credit union accounts and transition to them. My original reason for BofA was instant access to foreign currency but they don't do that at my local branches now.
- whitepoplar 8y agoI think a lot of that isn't unique to BofA, but tightened KYC regulation that they have to comply with, but I totally get what you're saying.
- throwaway5uie 8y agoExcept BofA is the only bank to do this. No other US bank has asked.
- throwaway5uie 8y agoI agree, and it’s why I closed my account with them (even though I only have American citizenship, I didn’t like how invasive they are, especially since no other bank asks).
- cobookman 8y ago
- Spooky23 8y agoUntil you have any sort of problem. BoA is probably in the bottom 5 of banks. The life hack here is to just double down on an American Express card with no fee and membership rewards. You collect more stable points and transfer into travel points at a positive ratio.
- toomuchtodo 8y agoMy dirty secret is I almost love Amex more than my family. They have bent over backwards when I’ve needed help (stolen wallet outside of the country while traveling), and while I pay $550/year for the card, I get all of the fee back in services while traveling (lounge, airline incidental credits, etc). Can’t say enough good things about Americans Express.
- whitepoplar 8y agoOne trick with the AMEX Gold/Platinum is that certain airline e-giftcards under certain dollar amounts trigger the airline incidental credits: https://thepointsguy.com/guide/airline-gift-cards-amex-incidental-fee-credit/ https://thepointsguy.com/guide/airline-gift-cards-amex-incid...
- ethbro 8y agoCan't speak from personal experience, but my father would certainly agree with you. As would a number of other people I know. A surprising number of people seem to have 'When shit hits the fan, Amex delivers' stories.
- loeg 8y agoThe life hack is to sign up for new cards with signup bonus every time you meet minimum spend on the previous card. Signup bonuses significantly dwarf any regular points, even in category cards. (Personally, I find Chase UR much better than Amex MR.)
- viraptor 8y agoThat kills your credit rating though, doesn't it?
- xapata 8y agoLast I checked the cash back maxed at 1.75% Did they change this recently?
- whitepoplar 8y agoPoints convert to dollars at 1c apiece. Base earnings are 1.5 points per dollar, plus a 75% bonus for having $100k+, so 2.625%.
- xapata 8y agoStrange. When I had that card they told me 1% base + 0.75% bonus for $100k+ giving 1.75% total. Reading the ad now, it looks like you're right. 2.6 points per $1 spent.
- xapata 8y agoUnfortunately, BoA products are subpar, including Merrill Edge. The interest rate for the savings account is nearly 2% lower and the mutual funds available have either high expense ratios or transaction fees. While that 0.6% bonus on credit card spending might give me some hundreds of dollars annually, I'd be sacrificing thousands of dollars for it.
- whitepoplar 8y agoYou could just buy low-cost ETFs of your choice for free. If you're looking for some place to park cash, BIL is yielding 2.15%. That being said, I'm not advocating that everyone switch to BofA/Merrill Edge, just that it's a really good deal for those who want it.
- xapata 8y agoI appreciate the tip. Now I need to estimate how much I'd gain from the card versus how much time I'd spend moving money around. BTW, Uber's Visa from Barclaycard gives something like 4% on restaurants and 3% on travel, which is the bulk of my discretionary spending.
- ethbro 8y agoBy "5.25% for online purchases," are you referring to this? https://thepointsguy.com/news/bofa-cash-rewards-pick-bonus-category/ https://thepointsguy.com/news/bofa-cash-rewards-pick-bonus-c... Which is to say, this is a new deal BoA has not previously offered, scheduled to go into effect in mid-January 2019? Not that it's a bad deal. Just to caveat the recommendation with the observation that in the game, good deals have a way of disappearing when they're taken advantage of. (Oddly enough, the $2,500 cap is probably the best long-term indicator!)
- jnurmine 8y agoComing from a culture less heavy on credit card use than the USA, I find the cashback concept a bit strange. I understand this: the merchants pay interchange fees to the issuer, the fees are higher than the cashback. Then the credit card issuer gives a part of this interchange fee back to the card holder as a cashback. So basically you fund a (tiny) zero interest loan to the credit card company and get part of the money back later. But doesn't the merchant price in the interchange fee? I.e. prices are higher under the cashback system? If prices are not higher, who in the end pays for the interchange fees?
- whitepoplar 8y agoIt's a horrible system, and market economics would state that credit card interchange is simply a hidden tax on goods sold. But, it's the system we've got and if you choose to opt-out of credit cards in favor of debit/bank cards, you pay the same price for stuff but don't get anything back for it. Moreover, credit cards offer stronger consumer protections than debit/bank cards in cases of fraud. One correction--the credit card issuer actually gives a 30-60 day loan of the entire purchase amount to the customer. If you pay off the complete balance by the due date (you can easily set this up via bank autopay), you're charged 0% interest, plus you earn any credit card "rewards" on top of that. It's all really a rigged game by financial institutions to get people to go into high-interest credit card debt (where they make all their money), but if you pay your balances off each month, it's the most efficient option. Hopefully we'll see its eventual demise.