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Introduction
Bank of America is one of the largest and most well-known banks in the United States, offering a wide range of financial products and services. One of their popular offerings is the Bank of America Business Advantage Cash Rewards credit card. This card promises cash rewards for business owners, but is it truly a cash cow or will it leave you with empty pockets? In this article, we will take a closer look at the features and benefits of the Bank of America Business Advantage Cash Rewards card to determine if it is a worthwhile option for business owners.
The Basics of the Bank of America Business Advantage Cash Rewards Card
The Bank of America Business Advantage Cash Rewards card is designed specifically for small business owners. It offers cash back rewards on purchases made with the card, making it an attractive option for those looking to earn rewards on their business expenses.
Here are some key features of the card:
- 3% cash back on purchases at gas stations and office supply stores
- 2% cash back on purchases at restaurants
- 1% cash back on all other purchases
- No annual fee
- 0% introductory APR for the first 9 billing cycles
On the surface, these features may seem appealing, but let's dig deeper to determine if this card is truly a cash cow or if it falls short of expectations.
The Pros of the Bank of America Business Advantage Cash Rewards Card
There are several advantages to using the Bank of America Business Advantage Cash Rewards card for your business expenses:
1. Generous Cash Back Rewards
The card offers competitive cash back rewards, especially in categories that are commonly used by businesses. Earning 3% cash back on gas station and office supply store purchases can add up quickly for business owners who frequently make these types of purchases. Additionally, the 2% cash back on restaurant purchases can be beneficial for those who entertain clients or hold business meetings at restaurants.
2. No Annual Fee
Unlike many other business credit cards, the Bank of America Business Advantage Cash Rewards card does not charge an annual fee. This can be a significant cost savings for small business owners who are looking to minimize expenses.
3. Introductory APR Offer
The card also offers a 0% introductory APR for the first 9 billing cycles. This can be advantageous for business owners who need to make large purchases and want to spread out the payments over several months without incurring interest charges.
The Cons of the Bank of America Business Advantage Cash Rewards Card
While the Bank of America Business Advantage Cash Rewards card has its advantages, there are also some drawbacks to consider:
1. Limited Cash Back Categories
While the card offers generous cash back rewards in certain categories, such as gas stations, office supply stores, and restaurants, it only offers 1% cash back on all other purchases. This means that if a significant portion of your business expenses fall outside of these categories, you may not earn as much in cash back rewards as you would with a card that offers higher rewards on a broader range of purchases.
2. Cash Back Redemption Restrictions
Another limitation of the Bank of America Business Advantage Cash Rewards card is the restrictions on cash back redemption. Cash back rewards can only be redeemed as a statement credit or a deposit into a Bank of America checking or savings account. This may not be ideal for business owners who prefer to receive their rewards in the form of a check or direct deposit into their business account.
3. Higher APR after Introductory Period
While the card offers a 0% introductory APR for the first 9 billing cycles, it's important to note that the APR will increase after this period. If you anticipate carrying a balance on your card beyond the introductory period, the higher APR could negate the benefits of the cash back rewards.
Case Study: A Business Owner's Experience with the Bank of America Business Advantage Cash Rewards Card
To provide a real-life perspective on the Bank of America Business Advantage Cash Rewards card, let's consider the experience of a small business owner named Sarah.
Sarah runs a small marketing agency and frequently spends money on office supplies, gas for client meetings, and meals with potential clients. She decided to apply for the Bank of America Business Advantage Cash Rewards card to take advantage of the cash back rewards.
Over the course of a year, Sarah spent $5,000 on gas station and office supply store purchases, $3,000 on restaurant expenses, and $10,000 on all other business expenses. Here's how much cash back she would earn with the card:
- $5,000 x 3% = $150 cash back on gas station and office supply store purchases
- $3,000 x 2% = $60 cash back on restaurant expenses
- $10,000 x 1% = $100 cash back on all other business expenses
In total, Sarah would earn $310 in cash back rewards for the year. While this may not seem like a significant amount, it's important to remember that this is essentially free money that she can use to offset her business expenses or reinvest back into her business.
Conclusion
The Bank of America Business Advantage Cash Rewards card can be a valuable tool for small business owners looking to earn cash back rewards on their business expenses. While it has its limitations, such as the restricted cash back redemption options and the higher APR after the introductory period, the card's generous cash back rewards, lack of an annual fee, and introductory APR offer make it a compelling option for many business owners.
Ultimately, whether the Bank of America Business Advantage Cash Rewards card is a cash cow or leaves you with empty pockets depends on your individual business needs and spending habits. It's important to carefully consider the features and limitations of the card and compare it to other options available in the market to determine if it is the right fit for your business.
