Chase just announced the 2012 bonus categories for the Freedom, one of our favorite cards. As a refresher, the Chase Freedom offers 5% cash back on bonus categories that change quarterly, up to $1,500 in purchases each quarter, and an unlimited 1% back elsewhere. It also gives $100 as a signup bonus if you spend $500 in the first 3 months, and has no annual fee. You have to opt in to the categories every quarter; existing Chase cardholders can do so here.
The 2011 categories were pretty great: this quarter includes restaurants, movies, department stores and charity. Next year is pretty unimpressive. They offer out-of-season, niche rewards, and in Q4 have the gall to take merchants that already earn 10% rewards, and knock them down to 5%. Clearly, Chase placed its bets on the world ending in 2012.
Here are the 2012 categories at a glance:
- Q1 (January – March): Gas stations and Amazon.com
- Q2 (April – June): Groceries and movie theaters
- Q3 (July – September): Gas stations and restaurants
- Q4 (October – December): Hotels, airlines, Best Buy and Kohl’s
Now, here are the 2012 categories with snarky commentary:
- You traditionally see gas stations in the summer months, because really, how much driving do you do in the post-holiday wintertime? Gas makes an encore appearance in the third quarter, but this isn’t a particularly impressive offering.
- Amazon.com is a really good deal (5% back is better than the Amazon credit card, by the by). It can supply you with everything from clothes to electronics to 200 bags of green tea (hypothetically). If you’re a savvy shopper, you can find what you’re looking for in a physical store, then purchase it online and earn bonus rewards on a wide swath of purchases. This is one quarter where I can actually see myself maxing out on the bonus rewards.
- The best thing about getting rewards on groceries is that you can buy gift cards at supermarkets. Why is this helpful? Normally, if you go to Starbucks, you get 1% cash back (the default rate). But if you go to Safeway and buy a $20 Starbucks gift card, you’ve just earned 5% cash back on that purchase! You can effectively earn bonus rewards with any merchant that sells gift cards in grocery stores. Of course, the AmEx Blue Cash offers 6% on groceries (up to $6k/year), but that’s another story.
- You have summer blockbusters, end-of-fall Oscar season, and a deluge of rom-coms around February 14th. Spring, however, is not known for its film offerings. Eh.
- Gas stations again! But this time, it’s a lot more helpful: it’s the summer driving season, gas prices are high, and you’ll likely do a lot more traveling.
- The restaurant category is actually pretty inclusive. Courtesy of Chase’s website: “Merchants in the restaurant category include fast food restaurants to fine dining establishments, including coffee shops, donut shops, bars, pubs, and night clubs.” For all that they used the word “include” twice in one sentence, the restaurants category will give you your money’s worth.
- That said, it’ll be hard to reach $1,500 in spending on just gas and restaurants. The average American household spent $533 a quarter on gas in 2010, so unless you plan on spending $77 at restaurants a week, this will be a sub-optimal rewards quarter.
- Well, at least they’re sort of seasonally oriented this time, although again, you usually see hotels and airlines in the summer. While people do tend to travel for the holidays, they’re more likely to stay with friends and family than they would during a summertime destination vacation. Consider me unimpressed.
- The Best Buy and Kohl’s offers are not – repeat, not – exciting. That’s because the Freedom offers you access to the Ultimate Rewards Mall, an online storefront from which you click through to other online retailers. Doing so lets you earn up to 20% cash back on top of what you’d usually earn. For example, right now, they’re offering 10% cash back at Macy’s and Kohl’s (yes, double what you’ll get in 4Q12). If you access macys.com and kohls.com via the Ultimate Rewards Mall, you’ll get that additional bonus. So forgive me if I’m less than thrilled that Chase is giving us what we would have gotten anyway via the online mall.
All things considered, the 2012 bonus categories are not that great. The first quarter is redeemed by Amazon.com’s extensive inventory, but even then – gas in February? Who’s going to be roadtripping across the country while the Midwest is frozen solid? And the worst is the fourth quarter. The Ultimate Rewards mall can offer you 10% back or more at popular retailers, so why waste a bonus category on two specific merchants? You’d have gotten extra cash back at Best Buy and Kohl’s in any case, I’d imagine. This year, they gave 10% back at the former on Black Friday, and are still offering 10% back on the latter today. (Moral of the story: credit card malls can offer exciting and unexpected discounts).
That said, the Freedom is still a good card. It has no annual fee, so what do you have to lose? Chase is really nice, surprisingly: compared to FIA Card Services, their statements are paragons of clarity, and if you opt in late to the current quarter’s bonus categories, you’ll earn bonus points retroactively. A full 40% of the NerdWallet staff has the Chase Freedom, and for a reason. The Ultimate Rewards Mall alone has earned me over $50 cash back this quarter, to say nothing of the $75 I got for maxing out the 5% bonus category rewards and whatever else I’ll accumulate over the rest of the year.
And as a dewy-eyed youngster with a short credit history, I’m glad to have a no-fee credit card that a) actually earns me rewards and b) can stay open for a long time, thus boosting my credit score. For all that the 2012 bonus categories fail to impress, the Freedom still delivers great value with no fee.
|Annual Fee||Signup Bonus||APR , Variable*||APR Promotions|
|$0||Get a $100 Bonus after spending $500 on purchases in your first 3 months from account opening.||13.99% - 22.99% (Variable)||0% APR for 15 months on purchases and balance transfers|
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