Chase Freedom Credit Card Review

chase freedom

The Chase Freedom credit card is one of the best rewards credit cards, offering 5% cash back on bonus categories that change every 3 months and 1% on all other purchases. You also get all their benefits for free because there’s no annual fee!

Chase Freedom is pretty friendly to people who are just starting off with credit cards, or those who have a short credit history. Although you may start with a lower credit limit, it is a great card to begin building your credit.

 

Chase Freedom at a Glance

Rewards Program
  • 5% cash back on bonus categories that change throughout the year, up to the quarterly maximum of $1,500.
  • 1% cash back on all other purchases
Annual Fees None
APR 0% Intro APR for 15 months on purchases and balance transfers; After Intro period, variable APR is 13.99% – 22.99%.
Foreign Transaction Fee 3%
Signup Bonus Earn a $100 bonus after spending $500 within 3 months after account opening

Verdict:

Good if you:
  • Spend a lot on gas (5% cash back for 6 months as of 2014)
  • Can align your spending with Chase Freedom’s rotating bonus categories to take advantage of the 5% cash back
  • Want to use the credit card in conjunction with another card in order to maximize your cash back (will discuss more below)
  • Have a short credit history
Bad if you:
  • Don’t spend on Chase Freedom’s bonus categories
  • Dislike the changing of bonus categories every quarter

Let’s first take a more in-depth look at the advantages of the Chase Freedom Credit Card.

10 Chase Freedom Credit Card Benefits

1)      5% Cash Back on Bonus Categories  – Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter. This means you can earn 5% on up to $6,000 of your spending every year, or $300! Categories change every 3 months and it is free and easy to activate. For 2014, Chase gives 5% cash back rewards on:

Q1 (January 1 – March 31): Gas stations, movie theaters and Starbucks stores
Q2 (April 1 – June 30): Restaurants (including Applebee’s, Chipotle, McDonald’s, Pizza Hut, etc.) and Lowe’s home improvement stores
Q3 (July 1 – September 30): Gas stations and Kohl’s
Q4 (October 1 – December 31): Amazon.com, Zappos.com and select department stores (including Macy’s, Kohl’s, JcPenney, Sears, Bloomingdale’s)

Freedom is a great credit card to use in conjunction with other cards if you want to maximize your cash back. For example, if you spend heavily on gas throughout the year, use Freedom during the 6 months when they offer 5% cash back on gas. During the other 6 months, gas will qualify as the regular 1% cash back, so you may want to consider using another credit card that is offering 3% cash back on gas, such as the The BankAmericard Cash Rewards.

To learn more about the Chase 5% cash back, click here

2)      1% Cash Back on All Purchases – Some credit cards may give you great rewards for only a few categories but below-average rewards on everything else. However, with Chase Freedom, not only do you earn 5% on purchases in bonus categories, but you are also guaranteed unlimited 1% cash back on all other purchases! You can easily make the Freedom card your default credit card or use it in conjunction with another card.

3)      Free $100 Bonus Sign Up – You receive a free $100 signup bonus after you spend $500 on your credit card within the first 3 months of account opening.

4)      10% Annual Bonus – When you have both Chase Freedom credit card and a Chase checking account, you get an extra 10% annually on the cash back earned on new purchases from the previous year.

5)      No Annual Fee and No Inactivity Fee

6)      0% Intro APR for 15 Months on Purchases and Balance Transfers – After the intro period, variable APR of 13.99% – 22.99%.

7)      Earn More Rewards While Doing Your Everyday Shopping – On top of the 1% cash back you earn on everyday purchases, earn even more when you shop online at over 400 popular stores through the Chase Ultimate Rewards Mall. Merchants include Best Buy, Macy’s, Target, Walmart, Bloomingdale’s, Groupon, Livingsocial, Home Depot, and more! For example, you get 3 extra points, or 3%, per $1 spent at Macy’s, 5 extra points spent at JcPenney, and 10 extra points spent at Snapfish.

You can also earn 2% cash back when you book flights and hotels through Chase Ultimate Rewards. It’s simple – just log on and pay with your Chase Freedom card. The extra cash back will appear automatically on your statement.

8)      Rewards, or Points, Never Expire – Rewards are earned as points, which can be redeemed for cash back. One point equals 1% cash back, or $0.01. For example, 2,500 points can be redeemed for a $25 statement credit or direct deposit.

9)      Redeem Rewards in Many Ways – The rewards program is not just cash back. You can redeem your points for:

  • Travel – Redeem your points for flights, hotels, and car rentals.
  • Merchandise – Use your points to buy electronics, movies, computers, and more
  • Experiences – Reward yourself with adventure and experiences, including live entertainment, sports games, concerts, and more
  • Gift Cards – Sometimes, you can even get more value out of your points when you redeem for discounted gift cards. For example, instead of redeeming 2,500 points for $25 cash back, you can get a $25 gift card using only 2,250 points! That’s an additional 10% off when you purchase discounted gift cards. Make sure you check “Sale Items” under gift cards to see what the current offers are.

10)      Low Threshold for Cash Back Redemption – Some cards only allow you to redeem rewards once you reach a certain threshold, often a high one. With Freedom, you can start redeeming your rewards once you reach $20. You can get your cash back in 3 different ways: a deposit to your Chase bank account, statement credit to your card, or a check by mail.

chase cash back

How Chase Freedom Compares to Other Credit Cards

Chase Freedom Disadvantages

Rotating bonus categories:
You may not like the idea of 5% rotating bonus categories and remembering the changing categories may be a hassle to you. You also have to activate your card each quarter in order to get the 5% cash back. However, the activation process is simple and can be completed through multiple ways in a matter of seconds. You also have 3 months to activate your card. As long as you activate before the end of the quarter’s deadline, you will receive the full 5% cash back on all bonus category purchases made throughout that quarter.

Limits to earning cash back:
One drawback of this credit card is that there is a limit on the 5% cash back on bonus categories of up to $1,500 in combined purchases each quarter. Even though you will still be eligible for 1% cash back after the $1,500 limit, this is a factor to consider in the card selection process. If you are a big spender on certain categories, you may want to look at alternatives so that you can earn more cash back rewards beyond the 1% cash back after you reach the $1,500 limit.  For example, if you a big spender on gas and you have reached your $1,500 limit during the 3Q, start using Discover It credit card for gas. Discover It also offers 5% cash back on gas stations from July 1 – September 30.

If you don’t even spend money on Freedom’s bonus categories, you won’t get much value out of that 5% cash back. If that’s the case, you may want to consider the Capital One® Quicksilver® Cash Rewards Credit Card, which offers a flat 1.5% cash back on all purchases. It also offers a one-time $100 bonus if you spend $500 within the first 3 months of account opening and has no annual fee. Unlike Chase which has a 3% foreign transaction fee, Capital One has no transaction fee.

The 5% cash back on bonus categories is only limited to a maximum of $1,500 each quarter. If you are a big spender on certain categories, you may want to look at alternatives or use the card together with another one to align each card’s bonus categories.