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Chase Freedom Review: 5% Cash Back is King

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The Chase Freedom is one of the best rewards credit cards in the business, offering no annual fee as well as great cash back rewards. It offers 5% back on bonus categories that change every quarter and 1% elsewhere. The sign-up bonus is pretty attractive at: Get a $100 Bonus after spending $500 on purchases in your first 3 months from account opening. Since it’s a fairly easy credit card to qualify for, it’s great for rewards rookies and cash back connoisseurs alike.

At a glance
Annual fees None
Foreign transaction fee 3%
Rewards program Cash back
Signup bonus Get a $100 Bonus after spending $500 on purchases in your first 3 months from account opening.
Verdict: If you fit in with the Freedom’s bonus categories, go for it
Good for:
  • Someone who spends a lot on gas
  • Someone whose spending aligns with the Chase Freedom’s rotating bonus categories
  • Someone with a short credit history
  • Someone who has the Chase Sapphire Preferred (we’ll explain later)
Bad for:
  • Someone who doesn’t want the hassle of changing bonus categories
  • Someone who doesn’t fit in with the Freedom’s bonus categories

In this article:

The Chase Freedom basics
Freedom vs. the other 5% cash back credit cards
Where it shines
Where it falls short
Why I got the Freedom (and still use it)

The Chase Freedom basics

The Freedom is a 5% cash back card, which means it gives 5% back on a slate of bonus categories that changes every quarter up to $1,500 spent quarterly. For 2014, it gives bonus rewards on:

  • Q1 (January 1 – March 31): Gas stations, movie theaters and Starbucks stores
  • Q2 (April 1 – June 30): Restaurants and Lowe’s home improvement stores
  • Q3 (July 1 – September 30): Gas stations and Kohl’s
  • Q4 (October 1 – December 31): Amazon.com, Zappos.com and select department stores

Aside from the 5% cash back on bonus categories (up to $1,500 spent quarterly), it gives an unlimited 1% cash back elsewhere. It has no annual fee, and gives 15 months of 0% interest on both purchases and balance transfers. Whether you’re looking to make a big purchase and pay it off over time, or simply earn good rewards, this is the way to go.

There are a couple other perks to recommend the Freedom. We at NerdWallet have found that it’s pretty friendly to young adults, recent college grads and people who have short credit histories. If you have limited credit, they might start you off with a low limit, but they’re a great first (or subsequent) credit card. And second, the Freedom grants you access to the Chase Ultimate Rewards Mall, an online storefront that gives you up to 10% cashback on preferred Chase retailers. These include Barnes and Noble, Fossil, and Sears.com. If you shop online anyway, this is a great way to increase your savings.

Freedom vs. the other 5% cash back credit cards

The other 5% cards are the Discover it and US Bank Cash+. Here’s how they stack up:

US Bank Cash+The Cash+ can actually beat out the Freedom in most ways, but suffers for the lack of a signup bonus. The Cash+ gives an unlimited 5% cash back on two bonus categories (you choose from a list that changes quarterly), 2% on gas, groceries or drugstores, and 1% elsewhere. But even better, if you save up for $100 worth of cash back, you’ll get $25 extra, effectively raising your rate to 6.25% and 2.5% on the bonus categories. and 1.25% elsewhere. However, it doesn’t have a signup bonus or access to discounts such as you see at the Chase Ultimate Rewards Mall, so it’s better than the Freedom if you hold the card for a short period of time.

Discover itThe Discover it offers more or less the same program, with a $1,500 quarterly cap in bonus spending and an unlimited 1% rewards elsewhere. In the it’s favor is its lack of foreign transaction fees; on the other hand, Discover’s acceptance isn’t as good as Visa or MasterCard’s. Plus, the it has no signup bonus, while the Freedom offers: Get a $100 Bonus after spending $500 on purchases in your first 3 months from account opening..

 

 Where it shines

The Freedom is an excellent card for gas purchases, as it typically includes gas as a 5% bonus category for two quarters of the year. As with all the 5% bonus cards, it’s great if you align with the bonus categories; if not, you should probably look elsewhere.

Chase Sapphire Preferred Credit Card
Apply Now

on Chase's
secure website


Another particularly good reason to get the Freedom is if you already have (or are considering applying for) the Chase Sapphire Preferred. This card earns Ultimate Rewards Points, which are worth 1.25 cents each if you redeem for travel booked through Chase. The Freedom isn’t eligible for this perk, but you can transfer the points earned on the Freedom to your Sapphire Preferred account, and therefore take advantage of the points boost. If you do this,the Freedom effectively earns 6.25% rewards on bonus spending and 1.25% everywhere else. Not too shabby!

Where it falls short

As we mentioned above, there are cases where the Freedom is less than ideal. We’ll take an in-depth look at each one.

Someone who doesn’t want the hassle of changing bonus categories

Capital One Quicksilver Credit Card
Apply Now

on Capital One's
secure website

If you don’t like the idea of 5% bonus categories – and some people don’t want the hassle – you can consider the Capital One® Quicksilver® Cash Rewards Credit Card. Offering a flat 1.5% cash back on all purchases, the card sports a good start: One-time $100 bonus after you spend $500 on purchases within the first 3 months. It also has no annual or foreign transaction fee. No caps, no enrollment, no fuss.

Someone who doesn’t fit in with the Freedom’s bonus categories

Obviously, if you don’t spend money on the Freedom’s chosen bonus categories, then you won’t get much value out of the card. In that case, consider another 5% cash back card, or just go with the Quicksilver, mentioned above.

Why I got the Freedom (and still use it)

The Chase Freedom was my first credit card, and I applied because it was a no-fee cash back card (I wasn’t ready for the complexity of annual fees or point limits), it seemed easier to qualify for (they’re pretty forgiving of short credit histories) and it offered a better signup bonus than the other cards in the category.

Now that I’m older and wiser, I still keep the Freedom card at the front of my wallet. 5% cash back is hard to find, after all. And when used in conjunction with my Chase Sapphire Preferred, it earns me 6.25% cash back on Amazon purchases for this quarter, which makes me a happy camper.

Appendix: Select department stores

Most popular department stores:

  • JCPenney
  • Kohl’s
  • Macy’s
  • Nordstrom
  • Sears

This excludes, among others, Target, Walmart and membership warehouses (such as Costco) Full list:

  • Baskins
  • Bealls
  • Beiter’s
  • Belk
  • The Big Store
  • Bloomingdale’s
  • Bon-Ton, including
    • Boston Store
    • Carson’s
    • Elder-Beerman
    • Herbergers
    • Parisian
    • Younkers
  • Boscov’s
  • Bradley’s
  • Burke’s
  • Cayman’s
  • Cee & Cee Department Store
  • Charles
  • Christensen’s
  • Conway
  • Cook Brothers
  • Dillard’s
  • Flemington Department Store
  • Getz’s
  • Hudson’s
  • Jc’s 5 Star
  • Jeffery
  • Joe Brand
  • Loehmann’s
  • Lord & Taylor
  • Magic Mart
  • Max & Jill
  • Neiman Marcus
  • Rains
  • RH Renny
  • Saks Fifth Ave and Off 5Th
  • Sam Moon
  • Stanley Korshak
  • Uhan’s Department Store
  • Uniway
  • Von Maur
  • Weaver’s Store
  • nunya_bid

    the problem is, as always, the fine print. only certain merchants fall into the 5% categories. for instance, this quarter to date, i’ve spent $1k on dining, so i should have nearly 4000 bonus points ($40 in cash back reward) but i only have about 1500..that’s computing with the 4% above the std 1% reward. so, the bonus is kinda BS with no transparency as to how much bonus they give to which charges. the only info i can see is how many total points i have, not to which charges they’re attached. i might ditch this card and just use my sapphire preferred. such bull.

  • Rocky

    Called Chase to request for a smart card – the ones with a chip. They told me that, at present, this feature was only available to the residents of Elysium (Sapphire Card holders). I called Citibank and got me my smart card. Guess who is getting my business from this point on! Chase told me essentially what the nut said to the bolt – “Screw me!”

    • Chelsea

      They now have Freedom cards with the chip functionality, starting August 1st :)