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.
|At a glance|
|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.|
In this article:
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 $5 or 3% of the amount of each transfer, whichever is greater, 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.
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
on US Bank's
on US Bank's
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
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
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.
Image via iStock.