Here Come the Incentives for Using Lots of Bank Products

by Jason Unger

It’s not a new — or especially surprising — that banks would like you to sign up for multiple products with them, and are willing to incentivize you for doing so. But as we talked about last week, as they start to lose tried-and-true fees that they’ve relied on for profits, they’re going to be more aggressive in encouraging you to sign up for more than one product.

Bank of America, creator of the faux “underdraft fee” and a leader in ways to make money off of you, has just rolled out its latest incentive program.

Called “Preferred Rewards,” it promises an array of not-that-interesting rewards. (Spoiler alert: it’s a trap!) Via the press release in MarketWatch:

With a three-tier structure – Gold, Platinum and Platinum Honors – clients have additional opportunities to earn, save and get more back based on their tier, including:

  • Rewards bonus:Bonus rewards – points or cash back – on eligible Bank of America credit cards.
  • Priority service:Access to a dedicated team of specialists available to handle all our Preferred clients’ banking and service needs.
  • Extra interest:Higher interest rates on Rewards Money Market Savings accounts.
  • $0 equity and ETF trades*:$0 Merrill Edge online equity and Exchange-Traded Funds trades (30 per month for Platinum and 100 per month for Platinum Honors).
  • Home equity interest rate discount: Interest rate reductions for home equity loans or lines of credit.
  • Mortgage relationship credit:A relationship credit – $200 for Gold, $400 for Platinum and $600 for Platinum Honors – on a mortgage purchase or refinancing of a loan.
  • No fees on select everyday banking services:Fees waived for services on standard check orders, cashier’s checks and stop payments.

I’ve never been a points guy, so that’s not interesting to me. Priority service? If you need priority service for your money, you shouldn’t be using Bank of America. Extra interest? If they don’t publish the rate, it can’t be good. $0 trades? Plenty of brokers offer this.

So what do you need to do in order to get these “preferred” rewards? Have an “active, eligible” personal checking account with Bank of America, plus a minimum combined balance of $20,000 or more across their checking, savings and Merrill Edge investment accounts. Now look, having a checking and savings account with the same bank isn’t a big deal, but it’s really the Merrill Edge angle they’re pushing here. You’re likely going to have more money in an investment account than you would in your checking account, and please tell me you’re using an online savings account for your savings — not some mega bank’s pittance of an account.

What they want you to do is start investing with Merrill Edge, and the more money you have in there, the less likely you are to leave.

Here’s my take: money management is not about the rewards. It’s not worth signing up for new products just to get rewards, and it’s especially not worth dealing with bad companies just to get rewards (there’s a reason Bank of America is constantly in the running for Consumerist’s Worst Company in America).

For the sake of balance, here’s what a Bank of America rep had to say about this program that “changes the game”:

“Preferred Rewards is the first program of its kind to offer clients benefits and rewards for everyday banking,” said Dean Athanasia, president of Preferred and Small Business Banking and co-head of Consumer Banking at Bank of America. “It is the result of deep client research to develop and deliver a simple program that provides clients benefits and rewards they will actually use, and shows them how much we appreciate it when they choose to do more business with us.”

Ugh. I think I just threw up in my mouth a bit.

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