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Chase Freedom is another great no-annual fee option from Chase. Technically, it is a cash-back card. However, when combined with an Ultimate Rewards earning cards such as the Chase Sapphire Preferred, Chase Sapphire Reserve, or Chase Ink Preferred, you can transfer your cash back into points.
The current offer for the Chase Freedom is a $200 bonus (or 20,000 Ultimate Rewards) after spending $500 in the first three months, as well as 5% cashback (or 5x Ultimate rewards) on the first $12,000 in grocery spend (not including Target or Walmart) in the first year. This is an elevated bonus compared to its normal offer and is only available on the Chase Freedom card until September 13, 2020. At that time, the Chase Freedom closes to new applications and a new card, the Chase Freedom Flex, will be available. This equates to an additional $600 or 60K points if you also have an Ultimate Reward earning card as mentioned above for a total sign-up bonus of $800 or 80K points.
Earn Rate and Redemption Potential
While technically the Chase Freedom is a cash back earning card, these points can be used for travel as long as you transfer the points to your Ultimate Rewards earning card. Chase Freedom earns points differently than the Chase Freedom Unlimited as it has what are referred to as “rotating categories”. Each quarter, Chase features different areas of spend where you will earn 5% on for the first $1,500 spent, equaling $75 or 7500 points. Some of the past categories include gas, wholesale clubs, department stores, streaming, etc. On all other areas of spend, you will earn 1%.
While you can earn cash back with the Freedom, you can also use your points for travel. This is even more valuable if you have the Chase Sapphire Preferred, Chase Sapphire Reserve, or Chase Ink Preferred. As the Chase Freedom, the Sapphire cards, and the Chase Ink Preferred are all part of the Chase Ultimate Rewards program, you can transfer points from the Freedom card to any of these other accounts. Once points are in a Sapphire or Ink Preferred account, you can transfer 1:1 to a variety of airline and hotel partners.
If you use points to book travel directly through the Ultimate Rewards travel portal, you benefit from an additional 25% (Sapphire Preferred and Ink Preferred) or 50% (Sapphire Reserve) bonus. For example, if you redeem $200 or 20,000 point signup bonus in the Ultimate Rewards travel portal, it is worth $250 (Sapphire Preferred and Ink Preferred) or $300 (Sapphire Reserve). Further, you can transfer the points to one of the above mentioned cards and then utilize the Pay Yourself Back feature to cash these points out at 1.25cpp or 1.5cpp rather than the 1cpp that is available if you cash them out directly from this card.
This card is one that has been in my wallet for awhile as it is an easy $300 or 30,000 points per year. Many debate whether this card is worth getting on its’ own and using a 5/24 slot or downgrading from another card (Sapphire Preferred or Sapphire Reserve). This decision can be greatly impacted based on whether you are operating in one-player or two-player mode.
To further complicate decisions, the 5% back on grocery spend on the first $12,000 in spend is a big draw for this card. As noted above, the equates to an additional $600 or 60,000 points in the first year. If you can max this out, this brings the sign-up bonus to $800 or 80,000 points (when transferred to an Ultimate Rewards earning account). While $12,000 sounds like a lot, many families can max this out easily, as it's an average of $1,000 monthly.
While the American Express Gold earns 4x Membership Rewards on grocery spend, it comes with a $250 annual fee. The current offer for the Chase Freedom Unlimited also presents a similar earn rate on grocery spend as well.
An $800 or 80,000 point sign-up bonus on a no annual fee card is incredibly enticing. As we continue to travel less than before due to the current pandemic, having more credit cards with no annual fees is definitely a win. Knowing I can cash points out at 1cpp, 1.25cpp, or 1.5cpp or have the flexibility of transferring to a travel partner, makes this card a winner.
As announced in early September, the Chase Freedom card is disappearing on September 13, 2020 and will be replaced with a Chase Freedom Flex card. While the new Freedom Flex card has many intriguing bonus categories, the most important analysis is: 1) you can no longer apply for a Chase Freedom after September 13, 2020; and, 2) you are eligible to sign up for a Chase Freedom Flex if you have a Chase Freedom. What does this mean for you? If you are currently 3/24 or less, you can sign up for a Chase Freedom before September 13 and then later sign up for a Freedom Flex!
The Chase Freedom will always have a spot in my wallet due to the ability to easily earn 30,000 points of $300 yearly by maximizing the rotating quarterly spend areas. Combining that ability to earn along with the increased sign-up bonus, makes this a very tempting offer. This card continues to be a solid cash back option, but the true value of the card increases when combining with an Ultimate Rewards earning card for either travel or the Pay Yourself Back feature. As mentioned above, applying for this card outright is often controversial, the increased offer makes it a much more appealing offer and one I would take advantage of if I did not already have the card myself. That being said, it is important to remember to be mindful of your 5/24 slots and to fully think through the best game plan for you.
Always feel free to drop a comment here or in our Facebook group to discuss your situation so we can help guide you and provide the best advice. Figuring out which credit cards to apply for can be complicated and we want every member to be successful in maximizing their earning potential.