Bank of America to offer premium rewards card (BAC)

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August 11, 2017 2:55 PM

The card, which targets high-income, affluent customers, comes at a time when firms are jostling to attract new customers vis-à-vis lucrative rewards programs, as credit appetite is at an all-time high

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Bank of America’s premium rewards credit card is expected to launch this fall, according to the.

That’s leading to a crowded space — Amex, Citi, and JPMorgan Chase, to name a few, have already hit the space — which is pushing peers to compete in order to keep up.

BofA’s product is different from other premium offerings in three key ways.

Lower annual fee:
Lower sign-up bonus:
Rewards structure:

These differentiators could also help the firm avoid financial pitfalls that these cards have brought upon other firms.

Premium cards hurt.
in nine years
Bank of America may have found the formula to avoid these.

Credit card rewards have become so popular in the US that issuers capture headlines just by launching a new rewards card. And with consumers now caring more about the type of rewards being offered than any other card feature, competition to offer the most lucrative and attractive rewards has intensified dramatically.

But it’s also important to note that offering such high-valued rewards comes at a price — Chase’s Sapphire Reserve card ended up reducing the bank’s profits by $200 million to $300 million in Q4 2016, according to Bloomberg. And as costs continue to rise, issuers will have to adjust to this new landscape by leveraging technology and partnerships to keep consumers engaged without sacrificing profits.

Ayoub Aouad, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed credit card rewards explainer that:

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