Bank of America has issued a new type of credit card that rewards its customers who maintain a balance.
It is called the BankAmeriCard Better Balance Rewards card.
Users of the card receive $25 each quarter when they pay the bill on time and pay more than the monthly minimum requirement.
There is no annual fee and 0% interest rates for the initial 12 months on new purchases, along with balance transfers within the first 60 days.
“It rewards customers for what they’re trying to do, which is pay off their balances and manage their debt responsibly,” said Titi Cole, senior executive for retail products at Bank of America. He also added, “hopefully [it] deepens their relationship with us.”
Customers who already have a connection with the bank, such as a savings or checking account, will receive a $5 bonus each quarter when they qualify for cash back.
“Anytime a bank is willing to give me free money, I’ll gladly take it. And that $25 a quarter really starts to add up over time,” said John Ulzheimer, SmartCredit.com’s president of consumer education.
However, there is also a penalty for late payments, with fees of up to $35. Customers are advised to keep an eye out for the interest rate at the endd of the 0% interest period, since a high rate is to be expected.
“If you’re really after zero percent interest on either a balance transfer or on introductory purchases, there are cards that offer that well beyond the 12-month mark,” said Greg McBridge, Bankrate.com’s senior financial analyst. He added, “It’s important to shop around and find the card that’s best suited for your need.”