There are a number of reasons why the Chase Freedom® Card is commonly referred to as “the king of cash back cards.” It’s the first card to give consumers control over the rewards they earn and the spending that brings those rewards. For this reason alone, the Chase Freedom card has become not only the leader of the pack, but the trendsetter in cash back rewards credit cards.
To maintain its reputation and remain competitive, Chase strives to introduce new and better benefits for its Freedom cash back card – but is it still king?
- Sign-up Bonus. Earn a bonus of $100 after spending $500 with the card within three months.
- Fees. The Chase Freedom card has no annual fee. There is a foreign transaction fee of 3%, however.
- APR. There is an introductory APR of 0% for 15 months on purchases and balance transfers. After that, the APR for the Chase Freedom card can range from 13.99% to 22.99%, depending on credit history and the prime rate.
- Up to 5% Chase Ultimate Rewards. The Chase Freedom card rewards up to 5% cash back, based on a cash back rewards calendar that rotates every quarter. The current category offered (between January 1 and March 31, 2014) includes purchases made at gas stations, movie theaters, and Starbucks stores. You are able to earn 5% cash back on up to $1,500 in purchases in different categories each quarter. All other purchases made outside of these quarterly “specials” earn an unlimited 1% cash back. Points can be redeemed for cash, merchandise, travel, or gift cards. If you choose to redeem your points for cash, one point equals $0.01, or 2,000 points can be redeemed for a $20 check.
- Chase Blueprint. One feature that is specific to Chase credit cards is the Blueprint plan, which is free and designed to help you save money and manage your account. This plan is available for Chase Freedom, Chase Slate, Chase Sapphire Preferred, and Chase Ink cards, and allows you the option of separating your statement and setting up plans for payment. The Track It function of Blueprint also allows you to track spending and create budgets.
- $100 Introductory Bonus. When you open a Chase Freedom card account, you simply need to spend at least $500 during the first three months to receive 10,000 points, which can be redeemed for a $100 check. This is a nice bonus, especially when similar no-annual-fee cash back cards do not currently offer a cash back bonus for new cardholders. The American Express Blue Cash Everyday Card offers 100 reward dollars, but this is only after spending $1,000 within the first three months, as opposed to the requirement with Chase Freedom to spend $500 in the first three months.
- 0% Introductory APR. The Chase Freedom card provides a 0% introductory APR for the first 15 billing cycles that the account is opened, and is applied to both purchases and balance transfers. This introductory offer is one of the best that any credit card is currently offering its members. For example, the Discover it Card provides a 0% introductory APR on balance transfers and purchases for 14 months, and the Citi Dividend Platinum Select Visa card is currently offering the 0% introductory rate for the first 12 months. The American Express Blue Cash Preferred card offers a 0% APR to new cardholders for 12 months as well, but only on purchases.
- 5% Cash Back Reward Rate. The Chase Freedom rewards program is based on a points system in which each dollar spent earns at least one point, and can earn up to five points in rotating categories. As long as you can keep up with the rotating categories, 5% rewards are competitive with other offers.
- Redeem Rewards Easily. Rewards are easily redeemed with the Chase Ultimate Rewards program. You can choose to redeem a minimum of $20 (or 2,000 points) for direct deposit, a statement credit, or a check by mail. You also have the option to redeem the rewards for merchandise, gift cards, and travel, also for the equivalent of $20 – except when purchasing merchandise or travel through Ultimate Rewards. In that case, you are able to earn more points on purchases and take advantage of sales or deals available to members. In many instances, you can earn more by redeeming your points for gift cards and merchandise than if you just choose the straight cash back option.
- Earn Bonus Points. If you have multiple Chase accounts, you can combine the points you earn and take advantage of opportunities to earn even more of them. You are eligible for special offers to earn up to ten extra points per dollar by shopping with more than 400 top retailers such as Macy’s, Lowe’s, and Best Buy – a $1,000 purchase at such a retailer would receive 10,000 points, which is equal to $100 cash back. Furthermore, if you have a Chase checking account, you earn a 10% bonus on points earned during billing cycles within the previous year. For example, if you have a Chase checking account and a Chase Freedom card account, any points you earn this year receive a bonus of 10% at the end of the year. These bonus points are awarded in January or February of next year.
- Chase Blueprint. With Chase Blueprint, you can pay down balances, manage your account, and decide which purchases are paid off first. It’s a free option that’s not offered by any other credit card issuer. It is simple to use and may help you save money on purchases as a result of better budgeting. Your bill can be separated so that you can specifically pay off a large purchase in full, for example, rather than applying your payment to the entire balance. There is no other card issuer at the moment that allows cardholders this option.
- Rotating Categories. Many rewards programs use rotating categories. When compared to cards with general across-the-board rewards options, the benefit of rotating categories really depends on your preference. You need to enroll in these categories each quarter, and if you forget to sign up or are not vigilant in planning shopping trips, the rotating category offer can end up being a hassle. If you do not sign up for the quarterly category, you only earn 1% on your purchases instead of the 5% that is offered.
- Foreign Transaction Fee. Foreign transaction fees on credit cards generally range from 1% to 3% on transactions outside of the United States. At 3%, the Chase Freedom card charges one of the highest in the industry. Similar cards, such as the Discover it card and Capital One Cash card, have eliminated it entirely.
- Penalty APR. Many credit cards, including the Chase Freedom card, apply a penalty APR if a payment is not made or is made late. The penalty APR of 29.99% on this card is applied if a payment is made late, if it is returned unpaid, or if the credit limit is exceeded. This also applies to any other accounts or loans you have with Chase.
Chase Freedom is a great cash back card if you have a “good” to “excellent” credit rating, and if you do not travel internationally. It offers a great sign-up bonus and introductory APR on purchases and balance transfers, and allows multiple opportunities to earn and redeem points.
If you are unable to keep track of your spending in rotating categories, however, you might prefer a rewards card that earns a flat rate on all spending. Additionally, if you do not intend to pay your balances in full, or there is any possibility of late payments, you should consider a card with a lower APR.
The Chase Freedom® Card is great for earning cash back on purchases simply and quickly if you are able to manage spending categories. A fairly high credit score is required to qualify – it is not a card that someone with credit issues or problems making payments wants to take a gamble on.
4.5 stars out of 5: Very few drawbacks regarding the cash back features except for rotating categories. Easy to earn and redeem rewards, and excellent introductory offers for new cardholders.
Editorial Disclosure: This content is not provided or commissioned by any bank, credit card issuer, hotel, or airline. Opinions expressed here are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.