Chase Freedom vs. Freedom Unlimited: Pick Your Style

They have similar names and some identical features. But the difference in rewards requires you to look inward.

Chase Freedom vs. Freedom Unlimited: It's a Tie

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The Chase Freedom® and the Chase Freedom Unlimited® have certain things in common. Both are cash-back credit cards with long 0% APR periods, no annual fees and names plucked from motivational posters.

But their rewards structures are quite different:

  • The Chase Freedom® offers 5% cash back in rotating spending categories on up to $1,500 in purchases per quarter (activation required). It offers 1% back on everything else. New cardholders can also earn this sign-up bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

  • The Chase Freedom Unlimited® earns 1.5% cash back on every purchase, with no spending caps. It, too, offers a bonus for new accounts: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. .

The cards offer many of the same perks, but the best card for you depends on your spending habits.

How do the cards' features compare?

A quick look at how the Freedom cards stack up:

Nerd tip: Both Freedom cards earn Chase Ultimate Rewards® points. (One point is worth one cent when redeemed for cash back.) But if you also have either the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve®, you can transfer the points you earn from your Freedom product to one of those Sapphire products. This lets you squeeze 25% or 50% more value out of them (depending on which Sapphire card you have) when you redeem for travel through Chase.

What kind of spender are you?

The choice between these cards comes down to how you spend money and how much appetite you have for managing your rewards:

Spending habits: Does you spend enough in the Chase Freedom® bonus categories to make the card worth the effort? Take a look at current and past categories here. If these kinds of categories represent a significant chunk of your budget, then the 5% card is a good fit. If your spending is all over the place, the Chase Freedom Unlimited® might be the better option.

Complexity: The Chase Freedom Unlimited® doesn't require any effort: You earn the same rate on every purchase, no matter how much you spend. The Chase Freedom® requires you to activate (and keep track of) bonus categories, and it knocks down your rewards rate once you hit the $1,500 quarterly limit.

Scenarios to consider

To compare the Freedom cards, NerdWallet calculated rewards earnings in three scenarios. For each, we assume the cardholder will spend $18,000 per year. That's roughly the amount the average household spends on purchases that could go on a credit card (for example, it excludes housing payments). It's also more than enough to max out the 5% bonus categories on the Chase Freedom® each quarter.

Scenario 1: The Chase Freedom® optimizer

This person times their purchases so perfectly that they manage to max out the 5% bonus categories every quarter. That means that they earn the sign-up bonus in the first year, plus 5% back on $6,000 in annual spending, and 1% back on the remaining $12,000 in both years.

  • Total cash back in the first year: $570

  • Total cash back in the second year: $420

  • Total cash back over two years: $990

Scenario 2: The Chase Freedom® realist

This person uses the Chase Freedom® regularly, but sometimes the bonus categories just don’t match where their money typically goes — and in other cases they don't spend anywhere near enough to max out the category. While they earn the sign-up bonus in the first year, they get 5% back on only $2,000 in annual spending, and 1% back on the remaining $16,000 during both years.

  • Total cash back in the first year: $410

  • Total cash back in the second year: $260

  • Total cash back over two years: $670

Scenario 3: The dedicated Chase Freedom Unlimited® user

This person doesn’t want to think about where and when they can earn 5% cash back, so the flat rate on the Chase Freedom Unlimited® is more their speed. They’ll earn the sign-up bonus in the first year and 1.5% back on all purchases.

  • Total cash back in the first year: $420

  • Total cash back in the second year: $270

  • Total cash back over two years: $690

Looking for no-fuss value? Go with the Chase Freedom Unlimited®

The no-nonsense Chase Freedom Unlimited® is the better choice if you want a card with simple terms.

It's better for the budgeter. Flat-rate cards such as the Chase Freedom Unlimited® are delightfully predictable. You don't need to tailor your spending to bonus categories to get a good rewards rate. That makes it easier to avoid overspending.

Say the Chase Freedom® is paying 5% back on purchases at Amazon.com. If you don't normally shop there, you might feel compelled to change your habits — and potentially spend more — to get the extra rewards.

It’s low maintenance. The Chase Freedom Unlimited® doesn't require you to activate categories every quarter. Basically, this card helps you earn robust rewards with less effort. It won't leave you Googling spending categories in the checkout lane.

It pairs well with other cards. The Chase Freedom Unlimited® is a go-along-get-along type of card. It's a great companion to the tiered reward cards in your wallet, such as co-branded airline cards, grocery cards and gas cards. You can take advantage of your tiered card's bonus categories and use the Chase Freedom Unlimited® to buy everything else. The Chase Freedom® is less versatile. And depending on the quarter, its bonus categories might clash with the kind of spending that your co-branded cards reward most.

Willing to spend time to maximize rewards? Go with the Chase Freedom®

The Chase Freedom® is your card if you like to squeeze the most value from every purchase.

It offers useful 5% categories. A tiered card is only as good as its bonus categories. And in that regard, the Chase Freedom® excels. It has regularly rewarded spending at such merchants as restaurants, grocery stores and gas stations. Here are this year's categories:

Chase Freedom® bonus rewards categories for 2020

Q1 (Jan. 1 - March 31)

• Gas stations. • Select streaming services. • Internet, cable and phone services.

Q2 (April 1 - June 30)

• Grocery stores. • Gym memberships and fitness clubs. • Select streaming services.

Q3 (July 1 – Sept. 30)

• Amazon.com. • Whole Foods Market.

Q4 (Oct. 1 – Dec. 31)

TBD (In 2019, department stores, PayPal and Chase Pay.).

These broad categories make it easier to reach your quarterly maximum. For example, if the current 5% category is grocery stores, you can use your card to buy a gift card for a restaurant you frequent from the supermarket. In effect, you're earning 5% back on restaurants, too.

If you can reach the quarterly caps on the Chase Freedom® without spending more than you normally would, it becomes much more valuable over time than the Chase Freedom Unlimited®.

Its limited-time offers tend to stand out. The rewards structure of the Chase Freedom® seems as though it was devised by a team of psychologists to boost cardholder joy. Depending on your shopping habits, they can make you feel like you just won the lottery. For the second quarter of 2019, for example, the Chase Freedom® brought back 5% cash back on home improvement store purchases for the first time since 2014 — just in time for families to spring-clean and get the yard ready for summer.

Why not both?

If you're having trouble choosing between the Chase Freedom® and the Chase Freedom Unlimited®, here's a simple solution: Get both.

These cards are often treated like rivals, but they work really well together. Use the Chase Freedom® for its 5% categories and the Chase Freedom Unlimited® to earn more than 1% back on everything else. You can even transfer your rewards between accounts and redeem them all in one go. If you do decide to get both, space out your applications by at least a few months to minimize the impact to your credit score.

Both cards offer excellent value on their own. But together, they become even more valuable.

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