How does Bank of America make money from Preferred Rewards?
Video Summary
The Bank of America Preferred Rewards program offers a three-tier system, with benefits and rewards for customers with a combined balance of $20,000 to $50,000, $50,000 to $100,000, and over $100,000 in their Bank of America and Merrill investment accounts. The platinum tier offers benefits such as unlimited ATM transactions, a 0.15% fee discount on Merrill investing, and a half percent interest rate reduction on an auto loan. However, these benefits come with a cost, as the bank makes money from customers in various ways, such as interest on savings accounts, interchange fees, and uninvested cash.
For example, customers with large balances may be using Bank of America’s investing services, paying fees for guided investing or using an advisor. The bank also makes money from credit card transactions, with small businesses paying around 1-3% in interchange fees. Additionally, customers who hold large amounts of cash in Bank of America accounts can be loaned out to other customers, generating interest. By accumulating large balances, customers may not be earning as much from their Bank of America credit cards as they think, as the 5.25% cash back rate only applies up to the $2500 quarterly cap, and higher spenders may only earn 1.75% on purchases above that cap. This highlights the importance of reading the fine print and understanding how credit cards work.
Related posts:
Ukraine state-owned enterprises weekly — Issue 152
US offers $10 million reward for information on Russian media organization accused of election interference
New customs reform aims to tackle Ukraine’s ‘single biggest cash cow’ of corrupt money in politics
Ukrainian drone pilots kill Russian major general known for torture of his own
Where Ukraine’s war amputees become Superhumans
Russian bank offers preferential mortgages in occupied parts of Ukraine's Donetsk, Luhansk oblasts
National Bank of Ukraine leaves interest rates unchanged at 13%
Ukraine to receive $600 million from World Bank under RISE Initiative
