After years of offering its regular Chase Freedom card (with 5 percent cash-back categories), Chase launched a sibling to its Chase Freedom card – the Chase Freedom Unlimited(SM).
Whenever a major issuer changes its portfolio, this prompts a flurry of questions from rewards maximizers. We’ll answer some of the big ones – and help you decide whether the new card fits with your rewards strategy.
What kind of rewards does it offer?
The Freedom Unlimited (which has no annual fee) offers 1.5 percent cash back on all spending. Note that the 1.5 percent is the cash-back rate. Technically, you’ll be earning Ultimate Rewards points (just like you would with the original Freedom), and these can be worth different amounts, depending on whether you redeem for cash, gift cards or travel. The Freedom Unlimited offers all the redemption options currently offered by the original Freedom card, including the ability to redeem at the register with retail partners via Chase’s mobile app.
The rewards structure is biggest difference between this new product and the original Freedom. While the original Freedom offers 5 percent back in various categories (which change every quarter) and 1 percent back on all other spending, the Freedom Unlimited gives you a steady 1.5 percent back on everything.
Is the regular Freedom card going away?
A Chase spokesperson has confirmed that the original Freedom is not going anywhere. The Freedom Unlimited is simply another option (and will be available starting this spring). Current Freedom cardholders can product-change to the Freedom Unlimited, or apply separately for a new card.
Should you replace your old-school Freedom card?
That depends largely on your spending patterns.
If you make use of the Freedom’s 5 percent categories (which, in years past, have featured restaurants, gas stations, grocery stores, and various department stores and online retailers), your rewards add up fast. Say you maximize just one quarter’s category (which would entail spending $1,500 within the category). You’d earn $75 in rewards. With the Freedom Unlimited, you’d need to spend $5,000 to get the same return.
However, with the original Freedom, you risk encountering categories that just aren’t a good fit. In fact, it’s certainly possible that an entire year’s worth of categories may not be a good fit. If that’s the case, you may prefer earning 1.5 percent on everything. The low-maintenance reward structure on the Chase Freedom Unlimited might also be a good option for those trying to meet sign-up bonus spending requirements on other cards and may not be able to concentrate category spending on the Freedom.
Making the best choice will involve doing the math on your yearly spend AND factoring in the categories.
For example, let’s say you’ll spend $25,000 per year (a little over $2,000 per month) on your Freedom card (whichever version you have). It all comes down to how much of that $25,000 would be in that year’s 5 percent bonus categories.
As you can see from the chart below, the original Freedom starts beating the Chase Freedom Unlimited if you can spend around $3,000 a year in the bonus categories. If you’ll have trouble meeting that goal, though, the Freedom Unlimited is the winner.
However, this graph represents a very specific example. If you fall behind in a bonus category, the Chase Freedom Unlimited comes up from behind. Also, remember that the Freedom’s bonus categories max out at $1,500 in spending a quarter, so the Freedom Unlimited may have an edge when it comes to big spenders.
Are there other cards worth considering?
The Freedom Unlimited is similar to several cards on the market. For example, the Capital One Quicksilver Cash Rewards card also earns 1.5 percent cash back on all spending. The Citi Double Cash, meanwhile offers 1 percent back on purchases and another 1 percent back when you pay purchases off.
If maximizing cash back is what’s important to you, pick any of the above.
It may pay to do more than compare numbers, however. Other issuers, such as Discover and American Express (a CreditCardForum advertising partner) have “card families” that include various options within the same rewards program. Chase appears to be growing its own card family with this new addition, which you may be able to use in tandem with its siblings.
With the Chase Freedom Unlimited, you are earning Ultimate Rewards points which, yes, can be redeemed for cash. If you have the Chase Sapphire Preferred ($95 annual fee, waived the first year), though, you can funnel the points earned with the Freedom Unlimited through the Chase Sapphire Preferred and unlock that card’s superior redemption options. One of those options includes transferring points into Chase’s partner airline and hotel programs – where they can be worth much more than 1 cent each.
These enhanced options are what cause rewards experts to assign a relatively high value to Chase Ultimate Rewards points –- and could make the Freedom Unlimited better for you than another issuer’s card that offers an identical rate of cash back.
The bottom line
If you’re trying to decide between the Freedom and Freedom Unlimited, which card is best for you is incredibly personal. You’ll need to run the numbers on your spending and factor in other cards you have. If the bonus categories match your spending, the original Freedom will probably give you more traction. If you’re looking for a catch-all card that gives you a boost on all spending (or just don’t want to worry about enrolling in bonus categories every quarter), the Chase Freedom Unlimited may be a more comfortable fit.
If the new card has you considering Chase for the first time, it offers something Chase hasn’t in the past – a card with a consistent rate of cash back on all purchases. So, rather than thinking of the Freedom Unlimited as a replacement for the original Freedom, you might think of it as another option – and a good one, for many.
Why we gave it 4 out of 5 stars
Because this card advertises cash back as its primary mode of redemption, we rated it based on our standards for cash back cards. However, keep in mind this product actually earns points in the Chase Ultimate Rewards program, which has other redemption options.
This card earned stars in most of our categories due to its elevated return on all spending and the simplicity of its program. We docked it a star for not offering many unique perks, compared to its competitors.
|Rewards-earning rate: This card meets our standard for no-annual-fee cards by offering above 1 percent cash back on all spending or above 3 percent in a bonus category. This card earns this star by offering 1.5 percent cash back on all spending.|
|Cash-back redemption value: This card meets our standards of having a cash-back redemption value of at least 1 cent per point.|
|Rewards simplicity or transparency: This card earns the star by having no caps on earnings and no category enrollment. You earn a straight 1.5 percent cash back on all spending.|
|Bonus-earning opportunities: The card offers an advertised sign-up bonus and a bonus-shopping portal.|
|Unique perks: This card doesn’t offer much in the way of unique perks. It’s a pared-down, simple product.|