Bank of America is trying to attract new customers by offering a cash rewards to people who pay down their credit card balance each month.
The Better Balance Rewards card gives cardholders $25 per quarter for paying more than their minimum payment on time each month. The extra amount can be anything above the minimum payment, even $1.
In addition, if the primary cardholder has at least one checking, retirement or savings account with the bank, the cardholder will receive an additional $5 bonus each quarter.
So a customer can earn up to $120 in cash rewards each year. The cash rewards are issued as a statement credit in the card account.
Unlike most reward cards, Better Balance Rewards does not target high income cardholders with excellent credit. Instead, cardholders must carry a balance in each month to be eligible for the cash reward; a zero balance does not receive the reward.
Bank of America is trying this different reward offer to get customers to pay more than their minimum and also broaden the relationship with the bank through other services and accounts.
Bank of America will still make money from interest payments and swipe fees.
The Better Balance Rewards card has no annual fee and offers a 0 percent APR on purchases and balance transfers during the first twelve months. The ongoing interest rate has a range of 11.99 percent to 21.99 percent based on your credit score. However, late payments could increase the APR to 29.99 percent.