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The Chase Freedom® and the Chase Freedom Unlimited® are becoming especially lucrative cards to use at grocery stores for new cardholders.
Nerd tip: The Chase Freedom® stopped accepting new applications in September 2020 and was effectively replaced by a new card, the Chase Freedom Flex℠. The same bonus offer applies to the new card. Cardholders with the "old" Chase Freedom® can continue using their cards as before.
As of July 24, 2020, the cards not only offer cash sign-up bonuses, but they're also paying a whopping 5% cash back on grocery store purchases in the first year you have the card, on up to $12,000 in spending.
The normal upfront sign-up bonuses for these $0-annual-fee cards are identical and as follows: Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening. If new cardholders fully max out either card’s additional supermarket bonus rewards, that's another $600 in cash back. (Groceries bought at Target and Walmart are excluded from the new offer, but grocery delivery services like Shipt and Instacart qualify.)
Put another way, that’s $420 more than you would have earned at grocery stores in the first year with the Chase Freedom Unlimited®’s normal ongoing 1.5% cash back on all non-bonus-category purchases. (The math in the first year for the Chase Freedom® depends on some other factors, including whether you can max out the card's other quarterly 5% bonus categories.)
No changes for existing cardholders
Nerd tip: In September 2020, the rewards structure changed for the Chase Freedom Unlimited®. Read about the changes.
Note that the bonus rewards on grocery store purchases are available only for new cardholders. For existing cardholders, nothing changes: The Chase Freedom Unlimited® earns 1.5% back on all purchases, and the Chase Freedom® offers 5% back in rotating bonus categories that you activate, on up to $1,500 in spending per quarter; all other purchases earn 1% back.
The cards’ other details remain the same. For example, both continue to feature an introductory APR offer on purchases.
Nerd tip: The Chase Freedom® and the Chase Freedom Unlimited® are cash-back cards, but they technically earn points in a currency called Chase Ultimate Rewards®, which are worth a penny each when redeemed for cash. If you don't already have one of these cards but you do have another Chase Ultimate Rewards®-earning product, this new offer could be even more attractive thanks to the ability to pool your rewards across multiple Chase cards, some of which offer increased reward value for eligible travel redemption.
» MORE: What is the 'Chase trifecta'?
How this fits with current trends
Chase’s move matches a trend among many credit card issuers, which are trying to make cards more relevant for customers whose spending habits have changed during the COVID-19 pandemic when they’re staying home more.
Many issuers are changing or adding rewards categories, at least temporarily, to match new spending patterns. Chase hasn’t said publicly how long these enhanced offers for new cardholders will last.
But even before the pandemic, the Chase Freedom Unlimited® had experimented with new offerings. For instance, in April 2019, the card replaced its cash sign-up bonus with a special offer to earn 3% cash back during the first year. That offer has since expired.
How this compares with another supermarket heavyweight
The Blue Cash Preferred® Card from American Express offers an industry-leading 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), among other rewards. Terms apply. If you maxed out that spending cap, you'd earn $360 annually on your groceries alone, not taking into account other rewards earnings. But the card carries an annual fee of $95.
» MORE: Best credit cards for groceries
Information related to the Chase Freedom® has been collected by NerdWallet and has not been provided or reviewed by the issuer of this card.o