If you want to earn cash back and score a good deal, you may want to consider the Chase Freedom. Read on for the reasons why this rewards credit card could be good for you — and why it has potential drawbacks.
With its $100 bonus offer, rotating 5% cash back categories, and introductory APR on purchases and balance transfers for 15 months, it's no surprise that the Chase Freedom is one of the most popular cashback credit cards with no annual fee.
10 Reasons to Get the Card
You spend at least $167 per month on your credit card: This card has a standout introductory offer. Spend just $500 within the first three months of opening the account, and you’ll get a $100 bonus. Other rewards cards have higher spending thresholds to score the bonus.
Tip: 23 Ways to Help Meet the $500 Minimum Spending Requirement
You want a 0% APR promotion: This card comes with a 0% APR introductory rate for 15 months on purchases and balance transfers. After the intro period, a variable APR, currently 13.99% - 22.99%, applies. The introductory rate can give you time to pay off a big purchase or consolidate your debt onto one card (balance transfers are subject to a 3% fee, with a minimum fee of $5).
You want to earn cash back: The Freedom card helps you earn cash back on virtually everything you buy. You earn at least 1% cash back on every purchase, with the potential to earn more in the rotating bonus categories.
You want even more cash back: While the card earns cash back every time you use the card, you can earn a higher percentage — 5% — total cash back on bonus categories (on up to $1,500 worth of purchases each quarter). These categories (like supermarkets, gas stations, Starbucks and Amazon.com) change every 3 months.
You’ll need to sign up to participate in the rotating categories every 3 months, but it’s easy to do. Chase gives you several ways to remind yourself to do it — but you will have to have your card handy or memorize the last four digits of the card to enroll.
You want rewards that are easy to redeem: You can redeem rewards for cash back ($20 or more) for your choice of a statement credit, direct deposit, or a paper check. You can also redeem through Chase Ultimate rewards for gift cards.
You want a credit card that works: The Chase Freedom is a Visa credit card. You’ll enjoy widespread merchant acceptance than you would with cards from American Express or Discover. This is an important differentiating factor if you frequently patronize smaller businesses.
Plus, it has a smart chip. A safer way to make payments in stores.
You don't want to pay an annual fee: The Freedom has no annual fee.
You have a spouse or someone you want to add as an authorized user: You can score a $25 bonus after you add your first authorized user to your account and that person makes a purchase within the first 3 months of opening the account.
You want rewards that do not expire: As long as your credit card account remains open, your cash back does not expire.
You like to shop online: If you shop through Chase's online shopping portal, you have the opportunity to earn even more cash back at select online retailers (extra cash back ranges from 1% to 15%, depending on the merchant). The list of merchants change from time to time.
To learn more about Chase Freedom, including the online application, visit Chase' secure website.
Remember, you need to spend at least $500 in the first three months to qualify for the $100 bonus.
Why You Might Look Elsewhere
But there are a few reasons why you might want to consider a different credit card.
You’ll need to pay attention to rotating categories: When you add this card to your credit card mix, you may want to do some thinking when you shop to make sure you’re getting the most rewards you can each time. For some people, such a prospect adds a fun dimension to shopping; for others, that may be a pain.
Plus, the most you can get back at the 5% level is $75 a quarter as the card stops giving you that higher amount after you've spent $1,500 on purchases that fall under the bonus categories. We don’t think that’s chump change, but some people may be turned off by a threshold.
It can tempt you into buying things you don’t need: By calling your attention to the bonus categories every quarter when you sign up, the card may prompt you to buy more at certain stores than your normally would, just to get the higher percentage of cash back.
You have to sign up each quarter: If that sounds like something you may not want to do, you may want a credit card that has a more consistent rewards program, with cash back or points on purchases that don’t change every 3 months.
You want to steer clear of a foreign transaction fee. If you do a lot of international travel, you may want to opt for a card with no foreign transaction fee: the Freedom charges a 3% fee on every purchase you make while traveling outside the United States.
Who It's Best For
Chase Freedom caters to people who love to get a deal and enjoy using credit cards to get cash back, rather than trying to figure out points or miles. It also offers percentages off certain popular stores when you make a purchase through its website (Ultimate Rewards), and because you always get at least 1% off your purchases, it makes for a great everyday card.
2015 CATEGORIES: REWARD CALENDAR
You earn bonus cash back on rotating categories throughout the year. You earn 5% total cash back in select bonus categories on up to $1,500 worth of quarterly purchases. If you spend over this limit, you go back to regular 1% rate until the three-month period ends. You earn an unlimited 1% cash back rate on other purchases.
The bonus categories for 2015 are:
Q1 (from January 1 to March 31, 2015): Grocery stores (not including Target® and Walmart® purchases), movie theaters and Starbucks® stores
Q2 (from April 1 to June 30, 2015): Restaurants, Bed Bath & Beyond®, H&M®, and Overstock.com®
Q3 (from July 1 to September 30, 2015): Gas stations and Kohl's®
Q4 (from October 1 to December 31, 2015): Amazon.com and more
(Additional categories or merchants will be announced before the start of each quarter.)
Remember, you need to activate the 5% cash back categories every time. You can activate the 5% cash back categories online, by text message, via email, by calling customer service, or in-person at a Chase bank.
In addition, you can earn extra cash back by shopping online through Ultimate Rewards Mall, Chase's online shopping portal.
Pros
Earn a $100 bonus after your first $500 of purchases within the first three months from opening your account
Earns up to 5% bonus cash back (on up to $1,500 in purchases) in new rotating bonus categories throughout the year
Earns 1% cash back on all other purchases
No annual fee
Cons
3% foreign transaction fee. If you plan to frequently travel internationally, you might want to consider a credit card with no foreign transaction fee instead.
HOW IT COMPARES
With so many credit cards offering cash back and low APRs to draw you in, how do you narrow down which works best for you? Well, it all depends.
Many of the cards on the market are similar on the surface, but a difference here and there could be what sways you, depending on your most immediate needs (what’s most important to you right now: a big signup bonus or a discount on a balance transfer?).
Let’s compare the Chase Freedom against other top cards that also provide cash back and other perks: the Discover It, Chase Sapphire Preferred, Chase Slate, and Citi Double Cash. Here's our assessment to help you make an informed choice based on which one serves your lifestyle and finances best.
We chose five factors to determine the advantages of each card:
Rewards
Introductory APR
APR after introductory period
Fees
Bonuses
CHASE FREEDOM RECAP:
Cash Back Rewards: 5% on quarterly rotating categories with $1,500 combined purchase cap; unlimited 1% on other purchases
Introductory APR: 0% APR for first 15 months on purchases and balance transfers
APR after Intro Period: 13.99% to 22.99%, based on creditworthiness
Fees: No annual fee; 3% balance transfer fee; 3% foreign transaction fee
Bonuses: $25 bonus after adding an authorized user and making a purchase within first 3 months; $100 back after you spend $500 in first 3 months of opening account
The Chase Freedom Card is a solid choice for the "everyman/everywoman" with its cash back program for everyday items, no annual fee, and 0% introductory rate for 15 months. Because of the foreign transaction fee, it might not be the best card for international travelers, but if you stay at home and use your card frequently, you'll be rewarded nicely.
Rotating bonus categories are often geared towards popular categories like gas stations or specific retailers such as Kohl’s and Bed Bath and Beyond. Plus, cash rewards only require a $20 minimum for redemption (some cards have a minimum of $25), and can be issued as a paper check, statement credit, direct deposit, or for Chase Ultimate gift rewards. And, as long as you don't close your account, your rewards never expire.
COMPARING CHASE FREEDOM TO DISCOVER IT
DISCOVER IT:
Cash Back Rewards: 5% on quarterly rotating categories with $1,500 combined purchase cap; unlimited 1% on other purchases
Introductory APR: 0% APR for first 12 months on purchases and balance transfers
APR after Intro Period: 10.99% to 22.99% based on creditworthiness
Fees: No annual fee; 3% balance transfer fee; no foreign transaction fee
Bonuses: All cash back earned the first year (for new card members only) will be doubled
There is no minimum for redeeming your cash back — a huge plus for card users who need the card for small-ticket items but who take a long time before they can reach $20-$25, which is what many cards require before redemption.
Why We Like the Discover It Card More Than Chase Freedom:
Chase Freedom vs Discover It: Discover has managed to gain favor with consumers in recent years. As the Wall Street Journal has noted, the company got the top spot in an annual customer-satisfaction survey of credit card companies by J.D. Power in 2014.
And it’s winning over cardholders with friendly conditions: The regular APR after the introductory APR period lapses is relatively low compared to other cards. Of course, you'll have to have excellent credit to obtain the lowest interest rate. But whatever APR you do get, know that Discover It won’t raise it if you do pay late occasionally. Another advantage of this card over the Chase Freedom: you'll get your FICO score online every month, free of charge.
You may also find that you can get even more rewards back when you make purchases through Discover Deals, Discover's online shopping portal. In terms of retailers, Discover has more options than Chase’s Ultimate Rewards portal and some online retailers offer higher percentages cash back using Discover's online shopping portal (as high as 20%).
The Downsides: Why We Still Like Chase Freedom:
Though merchants that welcome Discover in their stores have increased by leaps and bounds in the past decade, the Discover It card isn't accepted everywhere, so you'd be wise to have another card just in case.
Who Discover It Works Best For
Thanks to no foreign transaction fee, the Discover It is a solid card for those who travel abroad. It's also a good choice if you plan to make a lot of large purchases in the first year, as you'll get double the cash back you earned in the first 12 months after you open the account.
Tip: Best Credit Card for International Travel
COMPARING CHASE FREEDOM TO CHASE SAPPHIRE PREFERRED
CHASE SAPPHIRE PREFERRED:
Rewards: 2x points on travel and dining; 1 point per $1 spent on all other purchases
Introductory APR: None
Regular APR: 15.99%
Fees: $0 introductory annual fee for 1st year, then $95/year; no foreign transaction fee; 3% balance transfer fee
Bonuses: 40,000 bonus points after spending $4,000 in first 3 months of ownership; 5,000 bonus points after adding an authorized user and making a purchase in first 3 months
Chase Freedom vs Sapphire Preferred: If you love to travel and eat out, the Chase Sapphire Preferred may be right for you. While the Sapphire Preferred has a travel-friendly rewards program and no foreign transaction fees, it does have a $95 annual fee.
There are rewards for all cardholders, but frequent vacationers and business travelers will probably receive more perks with the Chase Sapphire Preferred card. It's also a solid choice for those who do a wide variety of dining and travel spending and prefer using a single card, as you'll get points for everyday purchases as well.
Why We Like the Sapphire Preferred Card More Than Freedom:
People who travel a lot, whether foreign or domestic, stand to get more in return for their purchases than regular users of Chase Freedom. Points are geared towards travel purchases, and there's a 1:1 point transfer to participating travel partners. This means that 1,000 Chase points/miles equal the same for partner miles/points, including British Airways Executive Club and Southwest Airlines Rapid Rewards.
And you'll get a fair amount of travel benefits, including trip cancellation/interruption insurance and auto rental collision damage. These perks can really add up, as a cardholder quoted in a Los Angeles Times article found out. He was reimbursed for travel expenses related to a baggage snafu and rental car insurance that totaled over $2,000.
The Downsides: Why We Like Chase Freedom More
There's no low introductory APR on purchases or balance transfers, which won’t win over consumers who carry a balance. You'll also have to have excellent credit to be approved for the Chase Sapphire Preferred card, so if your FICO score is low, you're already out of the picture.
And there’s pressure to make a lot of purchases — at least $4,000 worth — in the first 3 months of card ownership to earn the 40,000 bonus points, which translates into $500 of travel when redeemed through Chase Ultimate Rewards.
Who Chase Sapphire Preferred Works Best For
International and domestic travelers; consumers who dine out often.
COMPARING CHASE FREEDOM TO CHASE SLATE
CHASE SLATE:
Rewards: None
Introductory APR: 0% APR for first 15 months on balance transfers and purchases
Fees: 0% balance transfer fee for transfers made in first 60 days; $0 annual fee
APR after Intro Period: 12.99%, 17.99%, or 22.99%, depending on your creditworthiness; no penalty APR penalty for late payment
Bonuses: None
Chase Freedom vs Slate: If you have an existing balance to transfer, consider the Chase Slate. While the Chase Slate does not have rewards like the Freedom, the Chase Slate has a $0 introductory balance transfer fee for balance transfers made during the first 60 days.
Touted as the "Best Credit Card for Balance Transfers" by Money Magazine for two straight years, it can be argued that the Chase Slate is the balance transfer king. That said, while it's well suited for those carrying cards with a high APR who need a break on their interest rates, it doesn't serve as the best all-around card for everybody.
Why We Like the Chase Slate Card More Than Chase Freedom:
With both cards, if you transfer a balance from another card to the Chase Slate or Chase Freedom, you'll pay no interest for the first 15 months. But there’s a huge difference between the two: Chase Slate will not charge you a balance transfer fee if you make the balance within 60 days of opening your account.
Need to move $3,500? If you go with Slate over Freedom, you'll save $105 by not having to pay a balance transfer fee.
You'll also get your FICO score monthly, and through their Blueprint "Full Pay" plan, you can check off categories you know you'll pay in full each month (groceries, gas, etc.) and no interest will be accrued. Or use the "Finish It" plan, which allows you to give the date you expect to pay off your balance and you'll be billed each month for the amount you need to pay to make that happen. If you can’t pay off your total balance each month (which is the ideal way to go), you can at least isolate certain purchases this way.
The Downsides: Why We Like Chase Freedom Instead
There aren't any cash back rewards associated with the Chase Slate, so it's really not an ideal card for new purchases when there are so many rewards cards out there. It's more of a no-frills card for those who are already paying a high APR and need to reduce their rate.
Who Chase Slate Works Best For
Cardholders who usually carry a balance or want to make a huge dent in their debt with a balance transfer.
COMPARING CHASE FREEDOM TO CITI DOUBLE CASH
CITI DOUBLE CASH:
Cash Back Rewards: Cash back TWICE: 1% on eligible purchases and 1% when you pay
Introductory APR: 0% APR for first 15 months on balance transfers and purchases
APR after Intro Period: 12.99% to 22.99%, depending on creditworthiness
Fees: No annual fee; 3% balance transfer fee; 3% foreign transaction fee
Bonuses: No signup bonus
Why We Like the Citi Double Cash Card More Than Chase Freedom:
It's nice to get cash back twice.
The Downsides: Why We Like Chase Freedom More:
You'll lose the cash you earned if you don't make an eligible purchase or a payment within a year's time.
Plus, there's no signup bonus and no 5% cash back rotating bonus categories.
Who Citi Double Cash Card Works Best For:
Chase Freedom vs Citi Double Cash: This card attracts frequent credit card users who like the incentive of earning cash back on their payments. There’s a virtue involved with such an offer, this New York Times article notes, as it’s a rare card that actually encourages consumers to be smart with their credit card and pay it off every month. Citi Double Cash is also good for cardholders who don't want to bother with signing up for rotating categories each month.
HOW CHASE FREEDOM STACKS UP
All five credit cards are solid choices, with a fair amount of perks and specific rewards that are geared towards your particular needs. They will all reward you for your purchases. We still stand by Chase Freedom as the best all-around cash back card, but what’s our favorite may not fit your needs. Consider your spending habits and the benefits associated with each card before making your choice.
If you want hassle-free cash back with no rotating rewards categories and no enrollment required, American Express, a CreditDonkey advertiser, has a card with the same rewards categories year-round.
Bottom Line:
If you think bonus categories that change every quarter is a hassle, this card may not be for you.
For everyone else, especially those who prefer getting cash back rather than airline miles, the Freedom card is a first-rate way to earn cash back as long as you have excellent/good credit. And since the Chase Freedom has no annual fee, it's a cost-effective way to earn those rewards (assuming you pay off the balance every month).
2015 Chase Freedom Review: Is It a Good Credit Card? appeared first on CreditDonkey
Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through the Advertiser's affiliate programs.
Disclaimer: This content was first published on August 3, 2015. Information including APR, terms and benefits may vary, be out of date, or not applicable to you. Information is provided without warranty. Please check Chase website for updated information.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.