Personal Finance

Pricey premium rewards cards, such as Chase Sapphire Reserve (annual fee: $450), promise cardholders luxury perks. The Bank of America Premium Rewards card, scheduled to debut in September, offers similar perks at a less-than-premium price of $95 a year.

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The standard rewards rate is two points per dollar spent on travel and restaurant purchases and 1.5 points on everything else (points are worth a penny each). If you are enrolled in the bank’s Preferred Rewards program, you get a bonus of 25%, 50% or 75% on points earned — but you must hold funds in eligible BofA accounts to earn a bonus ($100,000 or more for the 75% bonus). The card also offers a $100 credit every four years to cover a TSA PreCheck or Global Entry application fee, plus a $100 annual credit toward incidental airline fees.

By our math, a customer who charges $22,000 to the card annually and earns the 75% bonus will rack up an outstanding $545 yearly. If the bulk of the Preferred Rewards balance is in high-earning investment accounts, that could be great. But $100,000 in checking or savings accounts would generally earn no more than $100 after a year. The same money in an internet savings account would earn as much as $1,400 in a year.

If you’re looking for a stronger package of travel benefits, the Chase Sapphire Reserve card may be worth the $450 annual fee. You’ll get a $300 yearly credit on travel purchases, free access to airport lounges with a Priority Pass Select membership, a $100 TSA PreCheck or Global Entry application-fee credit — and travel and dining purchases earn three points per dollar (one point on everything else). Redeem points for travel purchases at a rate of 1.5 cents each, or transfer them to partner loyalty programs.

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