Chase Freedom® Review

Ultimate Rewards, up to 5% cash back, and no annual fee.

The Chase Freedom® card is popular among cash-back enthusiasts because of its unique earning structure. With this card, you’ll earn 1% cash back on all purchases, plus 5% cash back on popular spending categories that rotate every quarter.

Not only can you redeem points for statement credits (“true” cash back), you can also redeem your Ultimate Rewards points for other valuable benefits such as gift cards, products, and even travel. To get the absolute most out of your points, however, you’ll want to pair this card with one of Chase’s premium cards like the Chase Sapphire Preferred® Card or Ink® business cards. More on that below.

The Simple Dollar’s Key Takeaways

  • Great earning potential. Earn 5X points on categories that rotate every quarter, plus 1X points on everything else. Check out the quarterly Chase calendar for details on rotating bonus categories. You can add the notices to your digital calendar to help you remember when the categories switch.
  • No annual fee. The fact that you never have an annual fee means you can keep this card in your wallet without ever having to worry about paying for the privilege.
  • Generous signup bonus. With this card, you’ll earn a generous signup bonus after spending just $500 within 3 months of account opening. Use that money for something special, redeem it for a statement credit, or turn it in for a gift card to your favorite restaurant.

Chase Freedom®

Highlights:

  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Enjoy new 5% categories each quarter like gas stations, restaurants and drugstores
  • Unlimited 1% cash back on all other purchases - it's automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.99-24.74%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Cash Back rewards do not expire as long as your account is open
  • No annual fee

Review: Perfect Option for Low Spenders and Cash-Back Enthusiasts

Chase Freedom® gives you 5% cash back on your spending in bonus categories that change every quarter, and 1% cash back on everything else. This means that you’re always earning at least 1% cash back with your card, whether you’re paying for gifts, groceries, utilities, or home repairs. The fact that this card comes with no annual fee makes it a popular option for those who don’t spend a lot of money on credit each month. Further, the $500 minimum spending requirement to earn a signup bonus is one of the lowest in the industry.

After much anticipation, the Chase Freedom® finally released its quarterly bonus categories for 2016. This year, you’ll earn 5X the points in the following categories. More details will be announced as each quarter approaches, but this list will give you a general idea:

  • January – March 2016: Gas Stations, Local Commuter Transportation
  • April – June 2016: Grocery Stores, Wholesale Clubs
  • July – September 2016: Restaurants and More
  • October – December 2016: Holiday Shopping

The 5% cash back bonus categories can be extremely lucrative if you can put them to good use. However, it’s important to note that the 5% rewards categories are only available on the first $1,500 spent in each category per quarter. Once you hit the bonus “limit,” you will still earn 1% cash back on everything.

Another perk that sets the Chase Freedom® card apart among its rivals is the Ultimate Rewards platform. Simply put, it is one of the most versatile platforms around. On the Ultimate Rewards website, you can redeem your points for cash, gift cards, products, and even travel. What makes this rewards system so powerful is the ability to combine points with other Chase credit card points and even transfer points to others within your household.

So, as your credit-card needs grow, you can trade up to other Chase cards like the Chase Sapphire Preferred® Card — which has a few enhanced Ultimate Rewards features, and never lose your points. This aspect makes Chase a one-stop shop for credit cards and is one of the reasons Chase cards remain so popular.

Chase Freedom®: Where It Falls Flat

If you’re big on the 5% bonus categories this card offers each quarter, the Chase Freedom® is absolutely ideal. However, this card isn’t necessarily geared to those who want to travel – especially not on its own. To be able to take full advantage of the Chase Ultimate Rewards program and transfer your points to frequent flyer or hotel loyalty programs, you’ll need to sign up for the Chase Sapphire Preferred® Card or another premier Chase card as well. In that sense, the Chase Freedom® is inferior as a standalone rewards option.

Further, cards like the Citi Double Cash card offer 2% cash back on all purchases, and with no annual fee to boot. If your goal is simply racking up extra cash back, you might be better off looking at some of the other options on the market and finding one that offers more than 1% back on everyday spending.

Who This Card is Good For:

  • Anyone who wants to earn cash back on all of their purchases
  • Those who want to juice their points in certain categories with no annual fee
  • People who want flexible points that are redeemable for different rewards depending on their mood

Who Should Pass:

  • Big spenders who could benefit from trading up to one of the top rewards cards
  • People who want the hassle of tracking bonus categories that change each quarter
  • Those who want a card that is associated with a specific hotel or airline vs. a general rewards card

How Does It Compare to Other No-Fee Cash Back Cards?

To see how the Chase Freedom® card stacks up to the competition, let’s compare it to another no-fee rewards card, the Blue Cash Everyday® Card from American Express.

 Chase Freedom® Blue Cash Everyday® Card from American Express
Annual Fee$0$0
Points Earned on Everyday Spending1% back on all purchases1% back on all purchases
Bonus Categories5% cash back on categories that rotate every quarter3% at U.S. supermarkets on up to $6,000 per year in purchases (then 1%); 2% at U.S. gas stations and at select U.S. department stores; 1% on other purchases. Terms Apply.
Redeem for...Statement credits, gift cards, travelStatement credits

With the no-fee Blue Cash Everyday® Card from American Express, you earn 3% cash back on your first $6,000 at U.S. supermarkets annually (then 1%), plus 2% at U.S. gas stations. As you can see, this might be a better option if you don’t spend a lot in rotating bonus categories and spend the bulk of your budget on categories like groceries or gas instead.

On the flip side, however, the Chase Freedom® card offers more options when it comes to how you redeem your points. Where the Blue Cash Everyday® Card from American Express only allows you to use cash back for statement credits, the Chase Freedom® card lets you redeem points for cash back, gift cards, and even travel.

At the end of the day, both of these no-fee options offer plenty of value and a lot of bang for your buck. Which one is best for you will depend mostly on your normal spending patterns and how much flexibility you want when it comes to redeeming your rewards.

Best Strategy with the Chase Freedom® Card

Even though Chase Freedom® is a versatile cash back card good for establishing credit or for use as a balance transfer card, the best use is as a strategic secondary card to boost rewards. There are better general rewards cards on the market (most with an annual fee, however) to use as your main credit card. However, many of these cards can’t touch the 5% back in the categories that Chase Freedom® covers.

What I like to do is use the Chase Sapphire Preferred® Card as my main card. This card earns two points per dollar on my high spending categories (dining out and travel), and comes with a bunch of other perks for using points like 20% bonus value if you redeem them for travel through the Chase Ultimate Rewards portal. I use my Freedom® card to max out the rotating categories each quarter and supercharge my points.

The points earned on my Freedom® do not carry the same bonus value for travel, but since both cards are on the Ultimate Rewards platform, I can combine the points by transferring the Freedom® points to my Chase Sapphire Preferred® Card. That means I can now redeem all my points for bonus value on travel. If you had two credit cards on two separate rewards platforms, you could never take advantage of pooling your points like this.

Spend a Lot on Groceries and Gas? Consider This Card Instead

While combining points and cards with the Chase Ultimate Rewards program can be a lucrative option, it might not make sense if most of your spending falls outside of 5% bonus categories, travel, and dining. If you spend most of your money at U.S. supermarkets and U.S. gas stations, you might be better off with the no-fee Blue Cash Everyday® Card from American Express. With this card, you’ll earn 3% on your first $6,000 spent at U.S. supermarkets each year (then 1%), plus 2% at U.S. gas stations. And since there is no annual fee, you can rack up rewards quickly without paying anything for the privilege.

Final Thoughts

No matter what kind of spender you are, the Chase Freedom® card offers an easy way to rack up rewards without worrying about paying an annual fee. And since it’s connected to the lucrative Chase Ultimate Rewards program, it is a great card to pair with one of the top travel cards that earns Ultimate Rewards points.

If you’re still unsure about the Chase Freedom® card and want to see how it stacks up against similar cards, check out our in depth review of the best cash back credit cards. We detail several other options that might work for you depending on your spending habits.

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