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.

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