Chase Freedom Review: 5% Cash Back is King
The Chase Freedom® is one of the best rewards credit cards in the business, with no annual fee and great cash-back rewards. It offers cardholders 5% cash back on rotating quarterly bonus categories and 1% elsewhere. There’s also a great signup bonus: 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|
|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 bonus categories, go for it|
In this article:
The Chase Freedom® basics
The Freedom is a 5% cash-back card, which means it gives 5% 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 and more (in 2014, Lowe’s home improvement stores)
- 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 has an annual fee of $0 and an introductory APR of 0% on purchases and balance transfers for 15 months, and then the ongoing APR of 13.99% - 22.99% (Variable). Whether you’re looking to make a big purchase and pay it off over time, or simply earn good rewards, this is a great card to have.
The perks don’t stop there for the Chase Freedom®. The Nerds have found that it’s pretty easy to qualify for if you’re a young adult, recent college grad or someone with a short credit history. Also, the Chase Freedom® grants you access to the Chase Ultimate Rewards site, an online storefront that gives you up to 10% cash back on your online purchases.
Chase Freedom® vs. the other 5% cash back-credit cards
Other 5% cards include the U.S. Bank Cash+™ Visa Signature® Card and Discover it®. Here’s how they stack up:
U.S. Bank Cash+™ Visa Signature® Card: The U.S. Bank Cash+™ Visa Signature® Card beats the Chase Freedom® in most ways, but suffers for the lack of a signup bonus. The U.S. Bank Cash+™ Visa Signature® Card 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 a bonus mall like Chase Ultimate Rewards.
Discover it®: The Discover it® offers a similar rewards program, with a $1,500 quarterly cap on bonus spending and an unlimited 1% rewards elsewhere. The Discover it® doesn’t charge foreign transaction fees, but Discover isn’t as widely accepted overseas as Visa and MasterCard. The Chase Freedom® also offers a signup bonus, whereas the Discover it® doesn’t.
Where it shines
The Chase Freedom® is an excellent card if your spending habits closely resemble the bonus categories. Otherwise, you can find better cash rewards elsewhere.
If you have the Chase Sapphire Preferred® Card, the Chase Freedom® is a great card to pair with it. 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
As we mentioned above, there are cases where the Chase Freedom® isn’t the best option for you. Here are two profiles of people who shouldn’t get the Chase Freedom®:
Someone who doesn’t want the hassle of changing bonus categories
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 gives high rewards without rotating categories or the need to opt in to them. The card also boasts an annual fee of $0 and an introductory APR of 0% on purchases and balance transfers for 15 months, and then the ongoing APR of 12.99% - 22.99% (Variable).
Someone who doesn’t fit in with the Chase Freedom®‘s bonus categories
If you don’t spend money in line with the Chase Freedom®‘s bonus categories, you won’t get much value out of the card. In this case, you may want to consider one of the other 5% cards that better fits your spending habits, or the Citi®Double Cash Card, as mentioned above.
Bottom line: If you spend in line with the Chase Freedom®‘s 5% bonus categories, it’s a great card — especially when used in conjunction with the Chase Sapphire Preferred® Card. Otherwise, you’ll want to go with a high cash rewards card, like the Citi®Double Cash Card, or another 5% rewards card with bonus categories that match your spending profile.
Appendix: Select department stores
Most popular department stores:
This excludes, among others, Target, Walmart and membership warehouses (such as Costco). Full list:
- The Big Store
- Bon-Ton, including
- Boston Store
- Cee & Cee Department Store
- Cook Brothers
- FLEMINGTON DEPARTMENT STORE
- JC’s 5 Star
- JOE BRAND
- Lord & Taylor
- Magic Mart
- MAX & JILL
- Neiman Marcus
- RH Renny
- Saks Fifth Ave and Off 5Th
- SAM MOON
- STANLEY KORSHAK
- UHAN’S Department Store
- VON MAUR
- WEAVER’S STORE