Bank of America Makes Changes to Small Business Rewards Card

For many entrepreneurs, using small business rewards credit cards can not only help them separate business expenses from personal but can also allow them to earn cash back. Because of this there are now several card companies courting business owners in different ways. This week Bank of America announced a revamped cash back structure for its Business Advantage Cash Rewards Mastercard. However, as NerdWallet notes, these changes come with a few pros and cons.

While the reward percentages on the card are staying the same, earning them has been changed significantly. First of all, while the previous iteration of the card offered small business owners 3% cash back on gas and office supply store purchases, now cardholders can choose what spending category they want to earn 3% back on. These options include the original two (gas stations and office supply stores) but add travel, television and telecom, computer services, and business consulting services as options. Luckily entrepreneurs can change their selection as often as once per calendar month in a bid to maximize their rewards. Additionally the card will retain its 2% cash back at restaurants perk plus 1% back on all other purchases.

So far it sounds great right? Well, unfortunately, there’s a bit of a catch. Although the previous version of the card capped the 3% bonus category spending at $250,000 annually (with cardholders earning a standard 1% back on such purchases thereafter), that cap has been lowered to $50,000. Moreover, while the 2% back on restaurant spending was unlimited, it too is now included in that $50,000 cap. After this threshold is met, all additional purchases will earn the standard 1% rate until a new spending year begins.

Despite these big changes, there are some aspects of the card that are staying the same. For example the Bank of America Business Advantage Cash Rewards Mastercard comes with no annual fee. There’s also the opportunity for Bank of America business accountholders to increase their cash back thanks to the bank’s Relationship Rewards program. This program allows cardholders to increase their cash back reward amount by 25% to 75% depending on your account balance. That means that, if you’re at Platinum Honors level, you’d earn 5.25% back on your chosen spending category, 3.5% at restaurants, and 1.75% back on everything else (and on those other categories once you reach the $50,000 spending cap).

All in all there are certainly some good and bad elements to BofA’s overhaul, which could give prospective cardholders pause. Similarly those who are still under the old structure may want to consider whether it’s worth making the switch, with the answer likely depending on their anticipated spending for the year and what category said spending falls into. Ultimately it will be interesting to see how this shakeup impacts the small business rewards credit card market.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...

Marqeta Expands Credit Program with New APIs and More

A FinTech that specializes in creating credit card experiences is rolling out some new features. This week, Marqeta announced what it calls a "significant expansion" of its credit platform. This includes more than 40 new credit APIs that will further help clients craft and launch their own credit card products. Additionally, the company notes an updated intuitive dashboard. Using this platform, businesses can create unique card options that can not...