The news: Bank of America is revamping its credit card strategy, per Bloomberg.
Diving into the strategy: BofA wants to raise its annual profits from its consumer program to $20 billion and boost its customer base to a total of 75 million by 2030.
To achieve these goals, the issuer will use AI to target new cardholders and will deepen customers’ connection to the bank with additional cards and other products.
BofA will also revamp the tiered reward program that gives cardholders cash-back multipliers based on how much money they hold at the bank, with the lowest tier starting at $20,000 and the highest exceeding $1 million.
Additionally, the bank plans to include more co-brand opportunities with its affiliated airlines and travel partners, like Alaska Airlines and Royal Caribbean cruise lines.
What’s different? BofA isn’t using premium cards to achieve its goals.
Competitors like JPMorgan Chase, Citi, and American Express all launched refreshed or new premium cards last year in order to capture spending from the top 10% of households driving half of all US consumer spending, per Moody’s. These card products also benefit from sky-high annual fees: In Amex’s last earnings, net card fees were up 18%, equalling $10 billion.
Instead, BofA targets financially well off consumers with a card program structured around no or low-fee cash-back credit cards: The average FICO score for BofA’s credit card program was 777, per BofA’s Q1 2025 earnings (the most recent quarter the bank shared the stat).
Tying perks to account balances instead of fees helps BofA fight for premium peers’ cardholders base while still giving the issuer a revenue stream in the form of interest on deposits—a tradeoff that members in that wealth bracket may find uniquely rewarding.
Implications for issuers: As the K-shaped economy persists, a larger segment of the US consumer population is stranded for traditional credit card options. Issuers risk losing average customers entirely to fintechs if no product offerings are directed to this segment.