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Bank of America Unlimited Cash Rewards (Gold Tier) vs PenFed Power Cash Rewards 2024

investor.com

Written by investor.com

December 18, 2023

In head-to-head competition, which of these rewards credit cards wins out? Here’s what each has to offer and how they fare when put to the ultimate test — the cash back you’ll earn for using them.

Bank of America Unlimited Cash Rewards (Gold Tier)
Preferred Rewards Gold Tier members earn an unlimited 1.87% cash back on all purchases (a 25% rewards boost from the standard 1.5% rate). The Bank of America Unlimited Cash Rewards card offers a 0% introductory APR for the first 18 billing cycles for purchases, as well as any balance transfers made within the first 60 days of opening your account.

PenFed Power Cash Rewards
PenFed Honors Advantage Members earn 2% cash back on all purchases. Non-members earn 1.5% cash back. Introductory 0% balance transfer APR for 12 months on balance transfers made within the first 90 days after account opening. (Subject to credit approval; 3% transfer fee applies.) Earn a $100 bonus statement credit when you spend $1,500 in the first 90 days.

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Bank of America Unlimited Cash Rewards (Gold Tier)

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Bank of America Unlimited Cash Rewards (Gold Tier) Logo
Cashback Per Year
$...
Annual Fee
$0
Welcome Bonus
$200

PenFed Power Cash Rewards

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PenFed Power Cash Rewards Logo
Cashback Per Year
$...
Annual Fee
$0
Welcome Bonus
$100
Want to compare more cards? Use our full calculator.

Which credit card earns more cash back overall?

Based on identical spending inputs, you’ll earn $225.60 cash back per year with Bank of America Unlimited Cash Rewards (Gold Tier) and $180.00 with PenFed Power Cash Rewards. For context, the average annual rewards payout from the cashback credit cards in the investor.com database is $181.73.

The annual rewards payout assumes you charge $1,000 each month spread across the following spending categories: Dining ($145), Entertainment ($134), Gas ($140), Groceries ($198), Travel ($128), Pharmacy ($15), and Other ($240). The dollar amounts for each category are based on consumer spending data collected by the U.S. Bureau of Labor Statistics (i.e., how much the average American spends proportionally across the major credit card rewards categories). But you can — and absolutely should! — customize the inputs based on your actual monthly spending habits, using our rewards calculator.

To ensure the most accurate results possible, the rewards calculations for Bank of America Unlimited Cash Rewards (Gold Tier) and PenFed Power Cash Rewards incorporate bonus rewards rates, spending caps, default rewards rates and annual fees, where applicable.

Is the Bank of America Unlimited Cash Rewards (Gold Tier) good?

Cardholders who achieve Gold Tier status in BofA’s Preferred Rewards program get a not-as-impressive-as-it-sounds-at-first 25% rewards boost. That mild bump turns this 1.5% flat-rate cashback card into a 1.87% cashback card, which is … fine?

thumb_up Likes

  • Unlimited cashback on all purchases (aka, no spending caps, no tracking required)
  • 25% rewards booster (1.87% vs. 1.5%) for Preferred Rewards customers is … something
  • $200 sign-up bonus
  • Lengthy 18 month 0% intro APR on balance transfers
  • Same 0% APR on purchases = pretty sweet
  • No annual fee
  • Preferred Rewards tiers qualify for additional banking/investing benefits

thumb_down Dislikes

  • Requires a $20,000 combined balance minimum in BofA and/or Merrill Edge investing account to qualify for so-so rewards rate booster
  • The Gold Tier rewards boost may take 30 days to kick in after enrolling in the Preferred Rewards program
  • 3% foreign transaction fee
  • 3% balance transfer fee


Category Default Rate Bonus Rate Bonus Spend Cap Bonus Spend Period (Months)
Gas 1.88% - - -
Travel 1.88% - - -
Dining 1.88% - - -
Entertainment 1.88% - - -
Pharmacy 1.88% - - -
Groceries 1.88% - - -
Other Purchases 1.88% - - -

Is the PenFed Power Cash Rewards good?

PenFed's flat-rate cash back Visa Signature card requires a lot for non-Honors Advantage Members to raise the 1.5% base rewards rate to 2%. Current/former military (active duty, reserve, honorably discharged, retired), however, automatically earn the higher rate.

thumb_up Likes

  • 2% unlimited cash back for PenFed Honors Advantage members
  • Blissfully uncomplicated rewards structure
  • No annual, foreign transaction or cash advance fees
  • 0% intro APR on balance transfers
  • Variable APR is capped
  • Visa Signature Card benefits included

thumb_down Dislikes

  • PenFed membership required to apply
  • 2% only applies to active/former military and PenFed checking customers
  • 1.5% cash back rate for non-Honors Advantage cardholders
  • No introductory APR on purchases


Category Default Rate Bonus Rate Bonus Spend Cap Bonus Spend Period (Months)
Gas 1.50% - - -
Travel 1.50% - - -
Dining 1.50% - - -
Entertainment 1.50% - - -
Pharmacy 1.50% - - -
Groceries 1.50% - - -
Other Purchases 1.50% - - -

compare_arrows Compare cash back credit cards

Select and compare two credit cards head to head to see which offers the most bang for your buck.


Select Credit Cards

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  • check_box_outline_blankcheck_boxAlliant Cashback Visa Signature Credit Card
  • check_box_outline_blankcheck_boxAlly Everyday Cash Back Mastercard
  • check_box_outline_blankcheck_boxAlly Unlimited Cash Back Mastercard
  • check_box_outline_blankcheck_boxAmazon Prime Visa
  • check_box_outline_blankcheck_boxAmazon Visa
  • check_box_outline_blankcheck_boxAmerican Express Cash Magnet
  • check_box_outline_blankcheck_boxApple Card
  • check_box_outline_blankcheck_boxBank of America Customized Cash Rewards
  • check_box_outline_blankcheck_boxBank of America Unlimited Cash Rewards
  • check_box_outline_blankcheck_boxBank of America Unlimited Cash Rewards (Gold Tier)
  • check_box_outline_blankcheck_boxBank of America Unlimited Cash Rewards (Platinum Honors Tier)
  • check_box_outline_blankcheck_boxBank of America Unlimited Cash Rewards (Platinum Tier)
  • check_box_outline_blankcheck_boxBlue Cash Everyday from American Express
  • check_box_outline_blankcheck_boxBlue Cash Preferred Card from American Express
  • check_box_outline_blankcheck_boxBMO Harris Bank Cash Back Mastercard
  • check_box_outline_blankcheck_boxBread Cashback American Express Card
  • check_box_outline_blankcheck_boxCapital One Quicksilver Rewards
  • check_box_outline_blankcheck_boxCapital One Quicksilver Rewards for Good Credit
  • check_box_outline_blankcheck_boxCapital One QuicksilverOne
  • check_box_outline_blankcheck_boxCapital One Savor Rewards
  • check_box_outline_blankcheck_boxCapital One SavorOne Rewards
  • check_box_outline_blankcheck_boxChase Freedom Flex
  • check_box_outline_blankcheck_boxChase Freedom Unlimited
  • check_box_outline_blankcheck_boxCiti Custom Cash Card
  • check_box_outline_blankcheck_boxCiti Double Cash Card
  • check_box_outline_blankcheck_boxCostco Anywhere Visa Card by Citi
  • check_box_outline_blankcheck_boxCredit One Bank American Express Card
  • check_box_outline_blankcheck_boxCredit One Platinum Rewards Visa (No Annual Fee)
  • check_box_outline_blankcheck_boxCredit One Platinum Visa
  • check_box_outline_blankcheck_boxCredit One Platinum X5 Visa
  • check_box_outline_blankcheck_boxDiscover it Cash Back
  • check_box_outline_blankcheck_boxDiscover it Chrome Gas & Restaurant
  • check_box_outline_blankcheck_boxFidelity Rewards Visa Signature Card
  • check_box_outline_blankcheck_boxNavy Federal cashRewards Credit Card
  • check_box_outline_blankcheck_boxPayPal Cashback Mastercard
  • check_box_outline_blankcheck_boxPenFed Power Cash Rewards
  • check_box_outline_blankcheck_boxPetal 2 Visa Card
  • check_box_outline_blankcheck_boxPNC Cash Rewards Visa Credit Card
  • check_box_outline_blankcheck_boxSam's Club Mastercard
  • check_box_outline_blankcheck_boxSoFi Unlimited 2% Credit Card
  • check_box_outline_blankcheck_boxTD Cash Credit Card
  • check_box_outline_blankcheck_boxTruist Enjoy Cash Credit Card
  • check_box_outline_blankcheck_boxU.S. Bank Cash+ Visa Signature Card
  • check_box_outline_blankcheck_boxU.S. Bank Shopper Cash Rewards Visa Signature Card
  • check_box_outline_blankcheck_boxUpgrade Cash Rewards
  • check_box_outline_blankcheck_boxUpgrade Triple Cash Rewards
  • check_box_outline_blankcheck_boxUSAA Cashback Rewards Plus American Express Card
  • check_box_outline_blankcheck_boxUSAA Preferred Cash Rewards Visa Signature Card
  • check_box_outline_blankcheck_boxVenmo Credit Card
  • check_box_outline_blankcheck_boxWells Fargo Active Cash Card

Compare

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Methodology

The results of the investor.com Credit Card Rewards Calculator are based on the monthly spending amounts you enter and the annual dollar value of the rewards each credit card program pays per $1 spent. Credit card companies often express this payout amount as a percentage (e.g., 1.5% of every dollar spent) or on a points basis (e.g. ,1.5 points for every dollar spent). We converted all of them to a dollar amount (“Cash Back Per Year”) to make comparing offers easier.

To calculate the amount of cash back you could earn per year, we factored in:

  • Spend category inputs: The default dollar values for each “Spend Category” in the Best Cashback Credit Cards tool — gas, groceries, travel, restaurant, entertainment, pharmacy, other — are based on average American spending data from the Consumer Expenditure Surveys from the U.S. Bureau of Labor Statistics. We also include additional spend categories (such as streaming services, online shopping, utilities, transit, Amazon and more) to help you see which rewards cards are most closely aligned with your actual spending patterns. We encourage you to customize the monthly spend inputs for the most accurate results.
  • Tiered rewards rates: If a rewards credit card pays higher cashback rates on certain spending categories (also called “Bonus Rewards”), that difference is reflected in the total “Cash Back Per Year” tally.
  • Rewards spending caps: Some cards impose category- or time-based limits (monthly, quarterly, annually) that affect the amount of rewards you can earn. For example, a card may pay 3% cash back on groceries on up to $1,000 of spending each quarter, then revert to the base/default rewards rate until the following quarter. We accounted for bonus spending caps and timeframe in the calculations.
  • Default rewards rates: Purchases that exceed a spending cap are usually subject to a lower default rewards rate (e.g., 1% or 1.5%). We mathed that out too.
  • Annual fees: If a rewards card charges an annual fee, we deducted that amount from the “Cash Back Per Year” total to provide a true accounting of a card’s annual rewards payout.

What’s not included in the “Cash Back Per Year” total is the cash value of any sign-up/introductory bonus. We highlight any Welcome Bonus separately. While sign-up bonuses can be the most lucrative part of getting a new cashback rewards credit card, not everyone will want or be able to do what it takes to earn the extra cash. (It usually requires spending a certain amount in a specified time period after the card is activated.)



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