Comparing Bank of America Preferred Rewards and US Bank Smartly relationships

For a good number of years, Bank of America has offered the highest cashback rebate on unbonused spend through their “Preferred Rewards” relationship program. Once you’re enrolled in the “Platinum Honors” tier, you earn 2.625% cashback on their Unlimited Cash Rewards credit card.

Recently, Robinhood began offering a 3% cashback credit card, which I doubted the existence of until readers assured me they had actually received their cards. I’ve been on the waitlist without any sign of movement for a year or so. If you’re able to get that card, then it’s a great card for unbonused spend. Since, for whatever reason, I can’t get it, I don’t have any practical insight to share about it.

On the other hand, I have an excellent relationship with US Bank dating back to my early teens, and have recently been getting ads in the US Bank app for the US Bank Smartly Visa Signature card. This card offers an unbonused 2% cashback (comparable to the Fidelity Rewards Visa, Citi Double Cash, and Barclaycard Arrival Plus), that increases to 3% cashback with $50,000 in qualifying balances and 4% cashback with $100,000 in qualifying balances.

There’s no point beating around the bush: that’s the best unbonused cashback rate you’re going to earn in 2025. But it’s not for everybody, and it’s still not for me, at least not yet.

Bank of America Preferred Rewards (re)qualification periods

There are two ways to qualify for Bank of America Preferred Rewards. You can qualify based on your rolling 3-month average balance, or you can open a new account with new funds above the qualification threshold. Last year I qualified by holding $100,000 across my Bank of America accounts, and when the 3-month average reached $100,000 (after 3 months), I triggered Platinum Honors status.

Requalification is simpler. According to Bank of America:

“No need to worry if your balances dip temporarily; you'll keep your Preferred Rewards program status for a full year. If after a year you no longer meet the balance requirement, you'll get a three-month grace period. If you haven't met the balance requirement after those three months, you'll be moved to a lower tier or lose your Preferred Rewards benefits, if you no longer qualify.

If you meet the balance requirements again within 24 months after losing your benefits, we’ll automatically reinstate your Preferred Rewards membership. If you meet the requirements after 24 months, you’ll need to re-enroll in the program.”

I’m not sure how this is implemented in practice; as I said, I only qualified for the first time last year, so my requalification/grace period is still a few months in the future. But what’s absolutely clear in both theory and practice is that you don’t need to keep large balances with Bank of America in order to retain your Preferred Rewards status. That status is based on a once-a-year check.

US Bank handles qualification differently.

US Bank Smartly qualification periods

US Bank’s qualification period for boosted cashback is seemingly based on a continuously-rolling 3-month balance:

“Combined Balances are based on the average daily balance of the previous 3 months (calculated monthly) (or, for account(s) open less than 3 months, the average daily balance of the applicable time frame).”

This means unlike Bank of America, your qualifying funds have to be moved over on a quasi-permanent basis if you want to continue earning the highest cashback rate on the Smartly Visa card.

This is perfectly fine if you have $100,000 in assets you want to permanently store with US Bank. I have no reason to believe they are any less competent a custodian of your assets than any other licensed brokerage, and 4% cashback on unbonused spend is not something you are going to find elsewhere, outside of spending towards credit card signup bonuses.

At the margin, another strong case can be made for people who have between $50,000 and $100,000 in investment assets. By permanently moving those assets to US Bank, they can trigger the 3% cashback tier, which is still comfortably higher than Bank of America’s highest 2.625% rate.

Conclusion

I keep repeating the word “permanently” because one of the biggest decisions an investor needs to make is which money is permanently allocated and which is available for what you might call “spontaneous” allocation. A high-balance IRA is a very valuable tool for spontaneous allocation, since it can trigger brokerage bonuses on an ongoing basis, and can trigger Bank of America Preferred Rewards on an annual basis, but that flexibility is sacrified if you’re required to maintain your qualifying balance on a permanent basis with US Bank.

That problem disappears as the amount money you have available to spread across such accounts increases, but that’s a restatement of the banality that the rich get richer; it’s not actionable insight into how to earn the most cashback on your unbonused spend.