Bank of America® Customized Cash Rewards Secured review: Build credit and earn cash back, your way

Quick highlights

• Rewards rate: Earn 3 percent cash back in a category of your choosing (among gas, online shopping, dining, travel, drug stores and home improvement/furnishings), 2 percent cash back at grocery stores and wholesale clubs and 1 percent back on other purchases (bonus rewards in 3 percent and 2 percent categories are limited to the first $2,500 in combined spending per quarter)
• Welcome offer: None
• Annual fee: $0
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 23.99 percent variable APR

Current welcome offer

The Bank of America Customized Cash Rewards Secured does not offer a sign-up bonus of any kind, but this is expected among credit cards for bad credit. Many secured credit cards don’t offer rewards at all, and those that do rarely come with welcome offers.

Rewards rate

Cardholders who choose the Bank of America Customized Cash Rewards Secured can earn 3 percent cash back in a category of their choosing (among gas, online shopping, dining, travel, drug stores and home improvement/furnishings), 2 percent cash back at grocery stores and wholesale clubs and 1 percent back on other purchases. However, it’s important to note that bonus rewards in 3 percent and 2 percent categories are limited to the first $2,500 in combined spending per quarter.

One major benefit of the Bank of America Customized Cash Rewards Secured is the fact you earn rewards on your spending. The rewards rates are also relatively generous when you compare to other secured credit cards.

How you earn

The Bank of America Customized Cash Rewards Secured stands out due to the fact cardholders can earn rewards. Individuals who choose this card can even pick the category they earn the most rewards in among gas, online shopping, dining, travel, drug stores and home improvement/furnishings, which is great for maximizing cash back. Plus, the standard 2 percent cash back rate at grocery stores and wholesale clubs can make this card a good choice for foodies or families with big food bills.

This means the most you can earn in 3 percent and 2 percent categories works out to $75 in rewards per quarter, and that’s if you spent a full $2,500 in one of the card’s 3 percent back categories. All other purchases will earn 1 percent in cash back.

How to redeem

This secured card offers three main options when it comes to redeeming your rewards. You can:

• Redeem your cash back for statement credits in any amount, or for deposits into an eligible Bank of America or Merrill account
• Redeem rewards for contributions to a 529 college savings account with Merrill (starting at $25)
• Set up automatic redemptions (starting at $25) for transfers into eligible Bank of America or Merrill accounts

While having more than one way to redeem rewards is definitely a good thing, options with this card are pretty limited since other rewards cards let you redeem for gift cards, merchandise, travel and more.

You don’t really earn “points” with this card, but you earn rewards in the form of cash back instead. If you did earn points, however, each point you earned would be worth one cent each.

The Bank of America Customized Cash Rewards Secured is very light on perks, but this is common with secured credit cards. Main cardholder benefits you should know about include the following:

Free credit score

This card gives you a free FICO credit score, which is the type of credit score used by 90 percent of top lenders. With a free look at your FICO score from time to time, you can keep an eye out for problems and track your credit score for progress.

Low minimum security deposit

You have to put down cash to secure your line of credit on the Bank of America Ⓡ Customized Cash Rewards Secured, yet this card’s minimum requirement starts at $300. Also note that your security deposit is fully refundable if you upgrade your secured card or close your account in good standing.

Contactless payment options

Cardholders can enjoy contactless payment options, including contactless chip technology. The Bank of America Unlimited Cash Rewards Secured is also compatible with Apple Pay, Google Pay and Samsung Pay.

The Bank of America Ⓡ Customized Cash Rewards Secured comes with no annual fee, which makes it more affordable than many other credit cards for bad credit. With that being said, the high variable APR of 23.99 percent can make carrying a balance costly.

Also note that this card charges a 3 percent foreign transaction fee when you use it for purchases abroad. Other fees to watch out for include a 3 percent balance transfer fee (minimum $10), a 3 percent cash advance fee (minimum $10) and a late fee of $40 if you pay your bill after its due date.

If you have a low credit score and can only get approved for a secured credit card, you should compare all the best options before you choose one. The chart below shows how the Bank of America Customized Cash Rewards Secured stacks up to two other secured credit cards.

Bank of America Customized Cash Rewards Secured vs. Bank of America Unlimited Cash Rewards Secured

For the most part, these two Bank of America credit cards are very similar. However, the Bank of America Unlimited Cash Rewards Secured does not have any bonus rewards categories, and instead you earn a flat 1.5 percent cash back for each dollar you spend.

Compare these two card’s rewards rates and how they might work for your spending before you sign up.

Bank of AmericaCustomized Cash Rewards Secured vs. Discover it® Secured Credit Card

You can also consider the Discover it® Secured Credit Card, which lets you earn cash back with a minimum security deposit of $200 and no annual fee. This secured card lets you earn 2 percent cash back on up to $1,000 in combined spending on gas stations and restaurants each quarter (then 1 percent back), plus 1 percent back on regular purchases. Discover will automatically match all the cash back you've earned at the end of your first year

Since the Bank of America Customized Cash Rewards Secured is a secured credit card, and since any other cards you can likely qualify for will fall in the same category, you shouldn’t pair this card with any others. After all, getting another secured credit card would require you to put down another security deposit.

Instead, use this card to rack up rewards and build your credit score. With enough on-time payments and responsible credit use under your belt, you’ll be able to graduate to a better credit card later on.

If your goal is building credit and earning some rewards along the way, the Bank of AmericaⓇ Customized Cash Rewards Secured should be at the top of your list. There’s no annual fee, you can earn up to 3 percent back on select purchases and you can get started with a minimum security deposit of $300.

The information about the Bank of America® Customized Cash Rewards Secured Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.