SKN | Inside Bank of America’s Aggressive Push for Credit Card Growth

Takeaways

• Bank of America is committing hundreds of millions of dollars to accelerate credit card growth through digital upgrades, marketing, rewards, and co-brand partnerships.

• The bank aims to lift credit card penetration among its checking customers from 71% to 80% while growing card loans at roughly 5% annually.

• Credit cards are central to the consumer unit’s medium-term target of generating $20 billion in annual profit.

A Strategic Reset for a Large but Underperforming Franchise

Bank of America is stepping up investment in its credit card business after acknowledging that, despite its scale, the portfolio has lagged leading peers. With a $101 billion card book and 39 million cards in circulation, management sees meaningful room to improve performance by deepening relationships with existing customers and attracting new ones.

Executives say the strategy is not about a single lever, but a coordinated push spanning product design, underwriting, digital experience, marketing, and partnerships. This approach underpins management’s confidence that credit cards can become a more consistent growth engine.

Turning Deposits Into Cards and Cards Into Primary Spend

A key pillar of the plan is conversion. Roughly 71% of Bank of America’s checking account customers currently hold a BofA credit card. Management wants that figure closer to 80% over the medium term, while also encouraging cardholders to make BofA their primary “top-of-wallet” option.

The logic is straightforward. With nearly 70 million consumer clients and close to $1 trillion in consumer deposits, the bank already owns the customer relationship. The challenge is monetising it more effectively through everyday spending rather than allowing competitors to capture that activity.

Rewards, Digital Experience, and Personalisation

Later this month, the bank plans to unveil updates to its rewards program, with a focus on more personalised benefits, exclusive offers, and tighter integration with deposit accounts. The aim is to reduce friction and give customers fewer reasons to look elsewhere.

At the same time, Bank of America is simplifying the digital application process by prefilling customer information and using more advanced data and modelling in underwriting. Management stresses this is happening within its existing risk appetite, but with more refined tools to identify attractive customers.

Marketing, Sponsorships, and Co-Brand Partnerships

Marketing spend has also been ramped up, not just to promote cards directly, but to reinforce the overall brand and funnel customers into the product suite. Sponsorships play a role here, with the bank pointing to its FIFA World Cup 2026 partnership as a way to combine visibility with tangible card acquisition campaigns.

On the co-brand front, Bank of America plans to deepen relationships with partners such as Alaska Airlines and Royal Caribbean. Rather than chasing new marquee names in a crowded space, the bank is focusing on extracting more value from existing alliances that provide access to distinct customer segments.

Installments and Gen Z Engagement

Another growth lever is custom pay plan, Bank of America’s post-purchase installment feature. Initially rolled out to millions of customers, it is expected to be available more broadly by midyear. The feature is designed to appeal to younger consumers accustomed to buy-now-pay-later options, while still keeping balances on the bank’s own books.

Management sees this as both a customer acquisition and loan growth tool, particularly for short-term financing needs.

Why This Matters for Investors

Credit cards sit at the heart of Bank of America’s ambition to lift consumer profitability toward $20 billion annually. Success would mean higher loan balances, stronger fee income, and deeper customer engagement, but it also comes with competitive and credit risks in a rewards-driven market where peers are spending aggressively.

Execution will be critical. Investors are likely to watch card loan growth, rewards costs, credit performance, and customer penetration metrics closely as evidence that the stepped-up investment is translating into sustainable returns.

For a confidential discussion on how U.S. consumer credit growth, rewards-driven margin dynamics, and large-bank card strategies can be assessed within a global portfolio allocation, contact our senior advisory team.