Update: The Chase Freedom card no longer offers a bonus of 10% on all purchases plus a 10 point per transaction bonus. Instead, both of those benefits have been replaced with a 10% annual bonus at the end of the year on all purchases.
Update: As of July 20, 2014, the Chase Sapphire Preferred Card no longer offers the 7% annual points dividend. View the current sign up offer here.
I’ve written before about the potential points bonanza from combining spending bonus categories on both the Chase Freedom and Chase Sapphire Preferred® Card, but I thought I’d write a little update since those categories change quarterly.
Like me, many of you might not pay too much attention to cashback cards in favor of focusing on points-earning cards instead because I find more value in earning points and miles that can be used for travel. With travel cards I generally get at least 3 cents per point in value, versus 1-2 cents usually earned with cashback cards.
However, the Chase Freedom card is a special case because rather than just giving you a cashback percentage on your purchases, you earn points which can then be redeemed for cashback checks…OR if you have a Chase Sapphire Preferred® Card or Ink Bold, you can transfer your points to your Ultimate Rewards account and then transfer to partners including United, British Airways, Korean Air, Southwest, Hyatt, Marriott, Ritz-Carlton, Priority Club and Amtrak. For a detailed post on why I love Ultimate Rewards, check here.
Here are the current details on the Freedom card itself:
Annual fee: $0
Sign up bonus: 20,000 points (which can be transferred to Ultimate Rewards partners) or $200 cashback with $500 spend within 3 months. There was a 30,000 points application link floating around, but it has been deactivated. You can always send them a secure message after applying asking for them if a 30,000 point offer is still available. Update: the current sign-up bonus for the Freedom card is 10,000 points or $100 cashback.
Earning: 1 point per dollar spent, with rotating categories that allow you to earn 5 points per dollar, up to $1,500 in spend per quarter, and up to 10% cashback when shopping at certain merchants through the Ultimate Rewards shopping mall.
Here are the bonus spend categories for 2012. Spend is capped at $1,500 per quarter for the 5x:
Q1, January 1-March 31: Amazon.com and Gas Stations. This ends on Saturday, so if you haven’t maxed out your spend, you can buy gift cards from Amazon or your local gas station to get the bonus.
Q2, April 1-June 30: Grocery Stores and Movie Theaters
Q3 July 1-September 30: Gas Stations and Restaurants
Q4, October 1-December 31: Airlines, Hotels, BestBuy and Kohls
So, it’s a pretty good mix of everyday and specialized categories and merchants. Just remember, you do have to activate your card each quarter to be eligible for the spend bonuses.
So let’s say you only use your Freedom card on the spend categories each quarter and you spend $6,000 total. You’d get 30,000 points (5%), which you could then transfer to United, British Airways, Korean Air, Southwest, Hyatt, Marriott, Priority Club, Ritz-Carlton or Amtrak. Plus factor in the 20,000 sign-up bonus points and you’ve got a total of 50,000 points - all with no annual fee. That’s enough for two roundtrip coach tickets from the West Coast to Hawaii using Avios, or at least two nights in any Hyatt property in the world (even the top properties require just 22,000 points for a free night redemption). Or hey, simply take the cash back and walk away with an extra $500.
DOES IT MAKE SENSE FOR ME?
I don’t have the Freedom card myself yet because there have been other Chase cards higher on my priority list (like the Hyatt Visa which got me two free nights in a suite), but I have definitely been thinking about it for my next credit card application round. In my circumstances, I’d use the Freedom card for everyday spend in those bonus categories, and then the Chase Sapphire Preferred® Card for dining, travel spend (which includes hotels, taxis, parking, subway, etc) not in the Freedom bonus categories and internationally since the Chase Sapphire Preferred® Card doesn’t charge foreign transaction fees.
If you are just starting out with credit cards, getting a Freedom card can make a ton of sense because it helps establish a good relationship with Chase (the king of credit card rewards) and the points you accrue now can be converted into even more valuable points later when you build up your credit score to get a Chase Sapphire Preferred® Card or Ink Bold.
If you recently got the Chase Sapphire Preferred® Card, the general rule is to wait one month between Chase applications, but I know people have gotten approved for both at the same time when they called the reconsideration line. Not bad, since two applications from the same issuer will only be 1 hard inquiry on your credit. I don’t think this will work for everyone, but if you have strong credit and a good relationship with Chase, I suspect it’s more than possible.
There’s one final piece of the Chase Trifecta (the Chase Exclusives program which gives bonuses for having a checking account as well) that I’ll cover in a future post. In the meantime, feel free to share your experiences maximizing Ultimate Rewards points!
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