Bank of America is targeting high income customers with the opportunity to earn 25,000 bonus Alaska Airlines miles in return for opening a new checking account by July 31. But there are many, many catches that might make it difficult or undesirable for some to try.
Catch #1: Only for Mr. Moneybags
The main catch (and how they can tell if you’re high income) is that you must receive two direct deposits, each $2,000 or more during the first 90 days. That requires a fairly hefty income. My wife and I do well enough, but after taxes and insurance premiums we each bring in less than $2,000 per paycheck. You might stand a better chance of qualifying if your employer pays you on a monthly basis instead of biweekly.
Although they define a qualifying direct deposit, I don’t think you need to worry much. It’s vague enough that almost any source of automatic deposit should qualify. Key terms are “other eligible recurring monthly income” and “by … an outside agency.”
Catch #2: Possibly Limited to Targeted Customers
Language in the printed mailer say this offer is available only “to customers who receive this offer via a direct communication from Bank of America.” Yeah, maybe or maybe not. I’ve seen such language before, and it is not always enforced.
It does appear that this offer is targeted to current Alaska Airlines credit card customers, so if you want to risk applying without receiving the mailer I think your odds will be better if you at least have the card. It also says that this offer is NOT available to anyone who has had a Bank of America personal checking account within the last 12 months. Feel free to try your luck at bankofamerica.com/alaskaoffer.
Catch #3: Possible Checking Account Fees
Citi has a long history of offering bonus points or miles for opening a checking account, but its best offers were reserved for certain accounts that had extremely high minimum balances. Citigold accounts for wealthy customers require a minimum balance of $50,000 in order to waive the $30 monthly fee.
By contrast, Bank of America is only requiring that you demonstrate potential wealth in the form of large direct deposits. The $12 monthly fee on its Core Checking account is 60% less and can be waived entirely if you continue to make a direct deposit of $250 per month or maintain a minimum balance of just $1,500.
Catch #4: Possible Taxes
I don’t know if Bank of America will actually file a 1099 for the value of your 25,000 bonus miles or if it’s just threatening to decide later. However, the language in the offer does say they have the right to request a W-9 and that “the value of this bonus may constitute taxable income.”
Given that Alaska Airlines regularly sells miles for about 2 cents each, I think at most you would face $500 of taxable income. If they try to hit you with more, contest the 1099.
Why This Offer Is Still Appealing
Assuming you can meet the initial qualification requirements, 25,000 miles are still pretty valuable despite the potential tax threat. My dad likes to say that if you’re stuck paying taxes you must be doing something right in life. Those in the 30% tax bracket will pay $150 for 25,000 miles, an effective rate of 0.6 cents each. Most people would outright buy miles at that price, so what’s wrong with paying Uncle Sam instead of the airline?