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Chase Freedom Review: 5% Cash Back is King

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Chase Freedom Review: 5% Cash Back is King

With an annual fee of $0 and generous cash-back rewards, the Chase Freedom® is a good fit for rewards rookies and cash-back connoisseurs alike. It offers 5% cash back on rotating quarterly bonus categories and 1% elsewhere, and you can qualify even with less-than-excellent credit. On top of that, there’s an easy-to-snag sign-up bonus: Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening. Here’s what you should know before applying.

Chase Freedom Credit Card
Apply Now

on Chase's
secure website

At a glance
Annual fees $0
Foreign transaction fee 3%
Rewards program Cash back
Sign-up bonus Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening
Verdict: If the bonus categories fit your spending habits, go for it.
Good for:
  • 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® Card (we’ll explain later)
Bad for:
  • Someone who doesn’t want the hassle of changing bonus categories
  • Someone who wants to travel abroad
  • Someone looking for a low-maintenance cash-back card

In this article:

The Chase Freedom® basics
Where it shines
Where it falls short
Chase Freedom® vs. the other 5% cash-back credit cards
Should I get the Chase Freedom®?

The Chase Freedom® basics

The Chase Freedom® offers 5% cash back on bonus categories that change every quarter, up to $1,500 spent quarterly. For 2015, the bonus categories are as follows:

  • Q1 (January – March): Grocery stores, movie theaters and Starbucks stores
  • Q2 (April – June): Restaurants, Bed Bath & Beyond, H&M and Overstock.com
  • Q3 (July – September): Gas stations and more (in 2014, Kohl’s)
  • Q4 (October – December): Amazon.com and more (in 2014, 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. The card’s annual fee of $0 and introductory APR of 0% for 15 Months on purchases and 0% Intro APR for 15 months on balance transfers, and then the ongoing APR of 13.99%-22.99% (Variable), makes it easy to pay off a big purchase over time while earning competitive rewards.

Chase Freedom Credit Card

Chase Freedom®

Apply Now on Chase's secure website

Pros

  • Bonus cash back categories
  • No annual fee
  • 0% for 15 Months on purchases and 0% Intro APR for 15 months on balance transfers

Sign-up Bonus

Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening

Annual Fee

$0

Intro APR Promotions

0% for 15 Months on purchases and 0% Intro APR for 15 months on balance transfers

APR

  • APR: 13.99%-22.99% (Variable)
  • Cash Advance APR: 24.99%, Variable

Card Details

  • Named a Best Card for Cash Back by MONEY® Magazine
  • Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn a $25 Bonus after you add your first authorized user and make a purchase within this same 3-month period
  • 0% Intro APR for 15 months on purchases and balance transfers. After the intro period, a variable APR of 13.99-22.99%
  • Unlimited 1% Cash Back on every purchase
  • 5% Total Cash Back on up to $1,500 in combined purchases in bonus categories each quarter
  • You'll enjoy new 5% categories every 3 months like Gas stations, Restaurants and Amazon.com. It's free and easy to activate your bonus each quarter!
  • No annual fee and rewards never expire as long as your account is open

If you have less-than-excellent credit and are looking for a good deal on cash-back rewards, this card could be your best option.

Where it shines

The Chase Freedom® is an excellent card if your spending habits closely resemble the bonus categories. Here’s why you may want to get it:

The rotating categories often include places where people make everyday purchases. Each quarter includes broad categories, such as restaurants or gas stations, as well as more specific brands, sometimes including companies like Starbucks and Amazon.com. For many people, earning these rewards doesn’t require many spending acrobatics.

You can generally qualify for it without a long credit history. You may be able to get the Chase Freedom® even if you don’t have excellent credit, so it’s a great fit if you’re just starting out.

You can get even more value on merchandise. With this card, you can access the Chase Ultimate Rewards site, an online storefront that gives you up to 10% cash back on your online purchases.

It goes well with the Chase Sapphire Preferred® Card. The Chase Sapphire Preferred® Card earns Ultimate Rewards Points, which are worth 1.25 cents each if you redeem for travel booked through Chase. The Chase Freedom® isn’t eligible for this perk, but you can transfer the points earned on the Chase Freedom® to your Chase Sapphire Preferred® Card account to take advantage of the points value boost. If you use this rewards hack, the Chase Freedom® effectively earns 6.25% rewards on bonus spending and 1.25% everywhere else.

Where it falls short

Here’s why you might not want to get the Chase Freedom®:

The rotating rewards can be a hassle for some. With the Chase Freedom®, rewards categories change every three months, and that can be tedious to keep up with — especially if your spending habits don’t always align with the new categories. If you’re looking for a no-fuss card, you might be better off with one that offers flat-rate cash-back rewards on all purchases.

It’s not good for traveling abroad. Like most cash-back cards, the Chase Freedom® charges a foreign transaction fee. Because of this, it’s not the perfect card to take with you on your next international getaway.

You have to opt in to rotating awards every quarter. If you want to qualify for the Chase Freedom®’s 5% rotating rewards, you have to log on to your account and activate the rewards every three months. If you miss the deadline, you may be stuck with only 1% cash back on everything for a quarter. Generally, though, you’ll have until the 14th day of the third month in the quarter to sign up and earn retroactive rewards for that quarter, which is plenty of time for most people.

Chase Freedom® vs. the other cash-back credit cards

The Chase Freedom® isn’t the only solid cash-back card on the market. Here’s how it stacks up with competitors:

Chase Freedom® vs. U.S. Bank Cash+™ Visa Signature® Card

US Bank Cash+(TM) Visa Signature(R) Card Credit Card
Apply Now

on US Bank's
secure website

The U.S. Bank Cash+™ Visa Signature® Card  has slightly better long-term value than the Chase Freedom® because of its higher 5% spending caps. It offers 5% cash back on two bonus categories (you choose from a list that changes quarterly) for up to $2,000 each quarter, 2% on gas, groceries or drugstores and 1% elsewhere with no limit of maximum points you can earn. Plus there’s a signup bonus: Earn a new cardmember bonus of $100 after you spend $500 in net purchases on your card within the first 90 days of account opening*. If the Chase Freedom®’s bonus categories don’t quite match your spending habits, the U.S. Bank Cash+™ Visa Signature® Card may be a better fit.

Chase Freedom® vs. Discover it®-Double Cash Back your first year

Discover It Credit Card
Apply Now

on Discover's
secure website

The Discover it®-Double Cash Back your first year offers a similar rewards program to the Chase Freedom®, with a $1,500 quarterly cap on bonus spending and an unlimited 1% rewards elsewhere. It doesn’t charge foreign transaction fees, like the Chase Freedom® does, but Discover isn’t as widely accepted overseas as Visa and MasterCard, so it might not be a great card to travel with. The Chase Freedom® also offers a sign-up bonus, whereas the Discover it®-Double Cash Back your first year doesn’t.

Chase Freedom® vs. Citi®Double Cash Card

Citibank Citi® Double Cash Card Credit Card
Apply Now

on Citibank's
secure website

If you don’t want the hassle of opting into and keeping track of 5% bonus categories, you should consider the Citi®Double Cash Card, instead. Offering 1% back on all purchases when you make them and another 1% when you pay them off, the Citi®Double Cash Card is a low-maintenance card with high rewards. The card also boasts an annual fee of $0 and an introductory APR of 0% for 15 months on purchases and balance transfers, and then the ongoing APR of 12.99% - 22.99% Variable .

Should I get the Chase Freedom®?

If you’re looking for a no-fuss, flat-rate cash-back card, you might be better off with another offer. But if you spend in line with the Chase Freedom®’s 5% bonus categories, this card could potentially net you an extra $300 a year, assuming you max out your categories every quarter. If that sounds like a good deal to you, consider applying.

Erin El Issa is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @Erin_Lindsay17 and on Google+.

Image via iStock.

  • 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 :)

  • Annie

    The application process sucks, they are rude and do not get back to you on time. Then you will get denied for a stupid reason like your gov. ID is fake. Even though the ID was definitely not fake. Many friends have applied and have run into problems

  • Abe

    Hi Nerd, can you please explain the Sapphire, Freedom pairing?
    How can you earn 5% cash back AND have all the benefits of sapphire?
    is it only that you earn cash back through freedom purchases (usually not on travel) and then redeem them on the sapphire account? I’m confused by your description.

    Further, if you’re abroad and want to pay no foreign transaction fees youd have to use the sapphire card and then not earn any cashback.

    • Deke

      It sounds like you get the gist, but just to try and help clarify:
      If you only have the Freedom you earn Ultimate Rewards points, but you can only redeem them for cash. The Sapphire Preferred earns UR points too, but it also gives you the ability to redeem them on travel at a better rate (among other things). When you have both cards you can combine your UR points earned from each and redeem them for travel.

      Clear as mud?

      Personally, I think the Freedom card stands on it’s own pretty well as a cash back card. However, if you are looking at getting the Sapphire for travel, you might as well also get the Freedom to rack up extra points on those rotating categories.

  • vacuumation

    How easy is it to be approved for the Chase Freedom card?

    I have a “fair” credit score around 650. Currently have no debt accounts aside from 2 student loans. Haven’t opened a credit card in almost 10 years, when I opened a bunch right after college. Had those closed, including a few charged off. But have repaired on the marks on my report.

    I’m considering the Chase Freedom card as well as the Barclay Rewards card, which is also apparently an ideal starter card for those with “average” credit.

  • Rick D

    Terrible, terrible, terrible. The worst card I have ever had – their practices are not only rude but should be illegal. I have had a Chase Freedom card for a few years now. Last year, they had canceled a Walmart charge without notifying me. A week later, having not received my merchandise, Walmart informed me that the credit card had canceled it. I was lazy and let it go. Now we ordered a ticket for my son to study abroad overseas — $600. We were so happy we got a good deal. Chase canceled that. We had to settle for $850 a few days later. Customer service told me that it was their right to do so and that I had no recourse. They said that they could do that at any time. I have always had Mastercard and Amex, and they notify me if there is a potential fraud. Not Chase. They just cancel it. The reason for having a credit card is convenience, and I have spent over 3 hours on the phone with different reps and managers, all not only unhelpful, but rude. And at times I have had to wait over 20 minutes to get a rep.

  • Rick D

    Warning. Do you want a convenience credit card that
    runs a serious risk of being inconvenient?
    I have had a Chase Freedom card for a few years now. Last year, they had
    canceled a Walmart charge without notifying me. That was the second time they
    had done this. A week later, having not
    received my merchandise, Walmart informed me that the credit card had canceled
    it. I was lazy and let it go. Now we ordered a ticket for my son to study
    abroad overseas — $600. We were so happy we got a good deal. Chase canceled
    that. We had to settle for $850 a few days later. Customer service told me that
    it was their right to do so if the charge was suspicious (which they said could
    be nothing more than we had never ordered from that merchant before) and that I
    had no recourse. They said that they could do that at any time in the future. I
    have always had Mastercard and Amex, and they notify me if there is a potential
    fraud. Not Chase. They just cancel it. The reason for having a credit card is
    convenience, and I have spent over 3 hours on the phone with different reps and
    managers, all not only unhelpful, but rude. And at times I have had to wait
    over 20 minutes to get a rep. They told
    me that that was the way of protecting themselves. When I said that my other cards call or email
    me, they said that Chase was not interested in risking the cost. Terrible!
    Rude, poor customer service,long wait times. It may be worth it for some, but when you
    really need them, there is a difference.