When it comes to maximizing credit card rewards, sometimes a simple switch can make all the difference. Last year, Rob and I both signed up for the Alaska Airlines credit card, scoring a generous 70,000-mile welcome bonus. However, as time went on, we realized that the card wasn’t providing much value beyond the initial bonus. With a $95 annual fee and minimal ongoing benefits for our spending habits, we knew it was time for a change.
Why Downgrade Instead of Canceling?
One of the best credit card strategies is downgrading or converting a card instead of canceling it. Closing a credit card can hurt your credit score by reducing your overall credit limit and shortening your average account age. On the other hand, product-changing to a no-annual-fee card preserves your credit history while still giving you a useful rewards structure.
Thankfully, Bank of America makes it easy to switch to a no-fee card. Instead of canceling, Rob and I each converted our Alaska Airlines cards into the Bank of America Customized Cash Rewards card, which has no annual fee and a valuable rewards structure.
The 3% Cashback Strategy
The Bank of America Customized Cash Rewards card allows you to earn 3% cashback in one of the following categories (you choose the one that works best for you):
- Gas
- Online Shopping
- Dining
- Travel
- Drugstores
- Home Improvement & Furnishings
Since our family spends a lot on Amazon, we chose “Online Shopping” as our 3% category. This means we earn 3% back on up to $2,500 per quarter in that category.
How This Adds Up to $600 Per Year
- We each have one of these cards, so that’s $2,500 per quarter per card eligible for 3% cashback.
- That means we can each earn up to $75 per quarter ($2,500 x 3%).
- Together, that’s $150 per quarter in cashback.
- Over the course of a year, that totals $600 in cashback—all from purchases we were already making!
The Bottom Line
If you’re spending significantly in any of the Bank of America Customized Cash Rewards categories, this card can be a fantastic way to earn extra cashback without an annual fee. For us, choosing online shopping means an easy $600 per year in free money that we can use on anything.
If you have an old Bank of America credit card that isn’t providing value, consider switching to this one—especially if you can max out that 3% category like we do!
The Points Mom’s Got IT!
