Chase vs Bank of America Credit Cards: Cash Back and Rewards Showdown for Beginners

Choosing your first U.S. credit card can be a maze of sign-up bonuses, rotating categories, and annual fees. For internationals and newcomers, two names dominate the entry-level landscape: Chase and Bank of America. As of January 2025, Chase reported holding over $3.4 trillion in assets (Federal Reserve, 2025), while Bank of America managed roughly $3.2 trillion. Both offer powerful cash-back and rewards programs, but their structures differ significantly. Chase leans into a rotating 5% cash-back model through the Chase Freedom Flex, whereas Bank of America rewards loyalty with a Preferred Rewards program that can boost cash-back rates by up to 75% for existing account holders. This guide breaks down the core differences, annual fees, and real-world earning potential for beginners, helping you pick the card that aligns with your spending habits and U.S. banking setup.

Chase Freedom Flex℠: Rotating 5% Cash Back

The Chase Freedom Flex is a no-annual-fee card that has become a staple for cash-back beginners. Its headline feature is the rotating 5% cash back on up to $1,500 in combined purchases each quarter in activated bonus categories. Categories in 2024 included grocery stores, gas stations, and Amazon.com. You earn 5% on travel purchased through Chase Travel℠, 3% on dining and drugstores, and 1% on all other purchases. The card also offers a welcome bonus: earn a $200 bonus after spending $500 on purchases in the first 3 months from account opening (as of early 2025).

Quarterly Activation Requirement

To earn the 5% rate, you must manually activate the bonus categories each quarter via the Chase website or mobile app. This is a simple step but easy to forget. If you miss activation, all purchases in that category earn only 1% cash back. For internationals new to U.S. credit, setting a calendar reminder is a must.

No Annual Fee, Foreign Transaction Fee

The Chase Freedom Flex has a $0 annual fee but charges a 3% foreign transaction fee. This makes it a poor choice for purchases abroad or on international websites. For newcomers who plan to travel back home frequently, this fee is a significant drawback. The card is best used for U.S.-based spending on gas, groceries, and dining.

Bank of America Customized Cash Rewards: Choose Your 3% Category

The Bank of America Customized Cash Rewards card is a direct competitor to the Chase Freedom Flex, also with a $0 annual fee. Its key differentiator is the ability to choose your own 3% cash-back category from a list of six: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings. You earn 2% on grocery stores and wholesale clubs (up to $2,500 in combined quarterly spending), and 1% on everything else. This flexibility appeals to beginners who have predictable, recurring spending in one area, such as online shopping.

Preferred Rewards Boost

The biggest advantage for existing Bank of America customers is the Preferred Rewards program. If you have a Bank of America checking account and at least $20,000 in combined balances, your cash-back rate on all categories increases by 25%. At the $50,000 tier, the boost jumps to 50%, and at $100,000, you get a 75% bonus. For example, the 3% category becomes 5.25% cash back at the highest tier. This can dramatically outpace the Chase Freedom Flex for heavy spenders who already bank with Bank of America.

Foreign Transaction Fee

Like the Chase Freedom Flex, the Bank of America Customized Cash Rewards card charges a 3% foreign transaction fee. It also has a welcome offer: a $200 online cash rewards bonus after making at least $1,000 in purchases in the first 90 days of account opening. For international students who might not have a large U.S. banking balance, the Preferred Rewards boost may be out of reach initially.

Chase Sapphire Preferred®: Travel Rewards and Transfer Partners

For beginners who see cash back as a stepping stone to travel rewards, the Chase Sapphire Preferred card is a premium option with a $95 annual fee (waived the first year). It earns 5x points on travel purchased through Chase Travel℠, 3x on dining, 2x on all other travel purchases, and 1x on everything else. Points are worth 1.25 cents each when redeemed for travel through Chase, or can be transferred 1:1 to partners like United Airlines and World of Hyatt. This transfer flexibility is a key advantage over Bank of America’s fixed-value cash back.

Welcome Bonus Value

As of early 2025, the Sapphire Preferred offers a welcome bonus of 60,000 points after spending $4,000 on purchases in the first 3 months. Those 60,000 points are worth $750 toward travel when redeemed through Chase. For a beginner planning a single trip, this can cover a round-trip domestic flight. The card also has no foreign transaction fees, making it ideal for international travelers.

Annual Fee Math

The $95 annual fee is offset by a $50 annual hotel credit for bookings through Chase Travel. If you take one trip per year, the effective fee drops to $45. For internationals who travel home once a year, the no-foreign-transaction-fee feature alone can save more than the fee. This card is best for those who want to move beyond simple cash back into transferable points.

Bank of America Unlimited Cash Rewards: Simple Flat-Rate Cash Back

If you prefer simplicity over rotating categories, the Bank of America Unlimited Cash Rewards card offers a straightforward 1.5% cash back on every purchase with no caps and no annual fee. This is a classic flat-rate card. For beginners who don’t want to track quarterly categories or manage multiple cards, this is a low-effort choice. The card also has a welcome offer: a $200 online cash rewards bonus after making at least $1,000 in purchases in the first 90 days.

Preferred Rewards Impact

With the Preferred Rewards program, the 1.5% base rate can increase to 2.62% cash back at the highest tier ($100,000+ in combined balances). This makes it competitive with premium flat-rate cards like the Citi Double Cash (2% on everything). For internationals who are building a banking relationship with Bank of America, this card can become a very strong everyday earner over time.

Foreign Transaction Fee

This card also carries a 3% foreign transaction fee. It is best used for U.S. domestic spending. If you need a card for international purchases, the Chase Sapphire Preferred or a no-foreign-transaction-fee card from Capital One would be a better fit.

Sign-Up Bonuses and Credit Score Impact

Both Chase and Bank of America have strict application rules for beginners. Chase follows the “5/24 rule”: if you have opened 5 or more personal credit cards (from any bank) in the last 24 months, you will be automatically denied for most Chase cards. Bank of America is generally more lenient but may require a U.S. credit history of at least 6-12 months. For internationals without a Social Security Number (SSN), both issuers may accept an Individual Taxpayer Identification Number (ITIN) or a passport for application, though approval is not guaranteed.

Hard Pulls and Approval Odds

Applying for a credit card triggers a hard inquiry on your credit report, which can temporarily lower your score by 5-10 points. To maximize approval odds, beginners should start with a secured card or a student card from their own bank, then wait 6 months before applying for a Chase or Bank of America rewards card. For cross-border tuition payments or setting up initial banking, some international families use channels like Airwallex global account to settle fees while building their U.S. credit profile separately.

Which Card Should a Beginner Choose?

The best choice depends on your U.S. banking relationship and spending habits. If you already have a Bank of America checking account with a balance over $20,000, the Customized Cash Rewards card with the Preferred Rewards boost is hard to beat. If you are starting fresh with no banking history, the Chase Freedom Flex offers higher earning potential on rotating categories and a more generous welcome bonus structure. For travelers, the Chase Sapphire Preferred justifies its fee with no foreign transaction fees and transferable points.

Recommendation Matrix

• Best for simple cash back: Bank of America Unlimited Cash Rewards (1.5% flat, up to 2.62% with Preferred Rewards).
• Best for category flexibility: Bank of America Customized Cash Rewards (choose your 3% category).
• Best for rotating categories: Chase Freedom Flex (5% quarterly on up to $1,500).
• Best for travel beginners: Chase Sapphire Preferred (transfer partners, no foreign transaction fee).

FAQ

Q1: Can I apply for a Chase credit card without a Social Security Number?

Yes. Chase allows applicants to use an Individual Taxpayer Identification Number (ITIN) or a valid foreign passport. However, approval odds are lower without a U.S. credit history. As of 2025, Chase recommends having at least 12 months of U.S. credit history before applying. You can build this with a secured card from another issuer first.

Q2: What is the 5/24 rule for Chase cards?

The 5/24 rule means Chase will automatically deny your application if you have opened 5 or more personal credit cards from any bank in the past 24 months. This rule applies to all Chase cards, including the Freedom Flex and Sapphire Preferred. If you are a beginner with 0-2 cards, you are safe. The rule does not apply to business cards.

Q3: Which card has no foreign transaction fees for international travel?

The Chase Sapphire Preferred has no foreign transaction fees, making it the best choice among these options for international travel. The Chase Freedom Flex and both Bank of America cards listed charge a 3% foreign transaction fee. For beginners who travel home frequently, the Sapphire Preferred’s $95 annual fee is often offset by the savings on foreign transaction fees alone.

References

• Federal Reserve 2025, Large Commercial Banks Data (H.8 Release)
• Chase Bank 2025, Chase Freedom Flex Card Terms and Conditions
• Bank of America 2025, Preferred Rewards Program Terms
• Consumer Financial Protection Bureau 2024, Credit Card Market Report