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Changes to the Chase Freedom 10% Bonus And What It Means For Your Points Strategy

by on March 7, 2013 · 44 comments

in Chase, Credit Cards

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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.

As you should know by now, using a combination of Chase credit cards including the Sapphire Preferred along with the Ink Bold and Ink Plus cards – all of which earn Ultimate Rewards that you can transfer to the programs nine travel program partners – in conjunction with the Chase Freedom card that is tied into the Chase Exclusives program with a checking account can be one of the most lucrative ways to rack up valuable travel parts.

Though the bonus structure has changed, the Freedom is still a lucrative card.

Though the bonus structure has changed, the Freedom is still a lucrative card.

Part of what made that combination so powerful is that by having Chase checking accounts (which are free if you have a direct deposit set up or $1,500 average daily balance) through the no-longer-available Chase Exclusives program, you used to be eligible for an additional Freedom bonus of 10% on all purchases plus a 10 point per transaction bonus. So even a $1 pack of gum would earn you 12 points – 1 point for the purchase, 10 points for the transaction and a 10% bonus.

Update: The Chase Freedom card no longer offers a bonus of 10% on all purchases plus a 10 point per transaction bonus additional 10% Cash Back. Instead, both of those benefits have been replaced with a 10% annual bonus at the end of the year on all purchases.

As I mentioned, the Chase Exclusives program for Freedom cardholders has been discontinued for new cardholders, and even those folks (myself included) who got in before the program ended have been noticing some changes to it lately.

Namely, that we will no longer receive a 10% points bonus for each purchase nor the 10 points per purchase bonus either. Instead, both of those benefits have been replaced with a 10% annual bonus at the end of the year on all purchases – sort of like the Sapphire Preferred’s annual 7% points dividend.

However, the previous 10% bonus, which was awarded with each monthly statement, only applied to points earned on normal purchases that earned 1 point per $1 spent, while the new 10% annual bonus also applies to the Chase Freedom’s lucrative quarterly 5x points bonus spending categories.

Chase Freedom Categories

As a reminder, you can find the current bonus spending categories here, but they include gas stations, drugstores and Starbucks until March 31, 2013, and each quarter you earn 5 points per $1 you spend at merchants in those categories up to a quarterly max of $1,500 (or 7,500 points).

While I’m sad to see the 10 points per transaction and monthly 10% bonus go away, at least we still have the annual 10% dividend and it applies to the card’s lucrative bonus spending categories as well – which makes it a good alternative. Not great, but still good.

Strategy

So what does all this mean for your Ultimate Rewards points strategy?

If you have no Chase cards right now, but want to create the most power points-earning combination, I’d recommend first getting the Sapphire Preferred card which currently has a 40,000-point bonus) after $3,000 spend within 3 months and the $95 annual fee waived the first year.

You can also apply for either the Ink Bold or Ink Plus cards, both of which has a 50,000-point bonus after $5,000 in spend within 3 months. You can get two cards on the same day – just make sure you can spend the $8,000 within three months (here are some ways to maximize spend) and if you need ideas on how to handle it, then wait at least one month before applying for the next card.

You can then apply for the Ink Plus and Freedom on the same day since the Freedom currently comes with 10,000 bonus points after $500 spend within 3 months and has no annual fee.

Then when it comes to spending, max out those Chase Freedom quarterly category spending bonuses for a total of 30,000 points each year (7,500 points x 4 quarters) and you will get an extra 3,000 points from the 10% annual dividend. I value Ultimate Rewards points at 2 cents each, so there’s $60 in value right off the bat, making this a no-brainer for a no-fee card.

When it comes to your other spending, make sure you are maximizing the specific bonus spending categories of your other Chase cards including the Sapphire Preferred’s 2x points on travel and dining, and the Ink Bold and Ink Plus’s 5x category spending bonus at office supply stores and 2x points on gas stations and hotels.

Remember, you can transfer your Freedom points to your Sapphire Preferred/Ink Bold accounts (or to anyone else’s) by logging into ultimaterewards.com -> Manage Ultimate Rewards -> Combine points.

When it comes to an overall, long-term points strategy, you’ve got to think big picture and that includes not only using several credit cards, but your overall banking profile. I’ve been a Chase customer for a long time (they have great coverage in major cities like New York, Los Angeles and Miami) and have multiple accounts with them, and that’s why they keep giving me these lucrative credit card sign-up bonuses.

Not only that, but I love their online banking software, including the ability to deposit checks by taking a picture of them on your mobile phone, pay people electronically, and the fact that they have some of the best travel credit cards and most lucrative bonuses on the market these days, which is one reason that I’ll be sticking with them and they’ll remain a central part of my points strategy.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Bryce

    When did these changes go into effect? I just received my statement and it looks like it always has.

  • Joel

    Just to be clear — the 10 points per transaction “bonus” ends April 1, 2013, for those currently receiving this benefit.

  • NH03311

    I am not sure that this statement is correct: “Remember, you can transfer your Freedom points to your Sapphire Preferred/Ink Bold accounts (or to anyone else’s) .” There is enough anecdotal evidence that people have been running into trouble for transferring their UR points to other people’s accounts

    From the FAQ

    Are there any restrictions to point transfer?

    You may transfer as many points as you want in 1,000-point increments to a participating partner’s frequent travel program.
    Transfers to unauthorized third parties or any other abuse of the Ultimate Rewards program may result in suspension or termination of the ability to participate in the program and forfeiture of points already earned.
    Note: For Korean Air SKYPASS transfers, you can only complete one point transfer transaction per day.

  • Josh_brooks

    Do you still need the bank account to get this bonus?

  • Leigh

    Actually, they’re rolling it out at different times to different customers. The first round of letters sent to some customers has an April 1 date for the change. Remaining customers who have not yet received a letter will get one later, with a later date for the change. (According to Chase when asked by someone who has not gotten any letter yet)

  • Corky

    Does the new benefit extend to all Freedom cardholders, not just those grandfathered in from Chase Exclusives?

  • Ryan

    I’ll still make good use of the 5% categories, but all non-bonus category spend will go to my Starwood AMEX (where I used to put this type of spend under $100 on my Freedom).

  • Sherylz

    Thanks for this info. I haven’t recieved any notification from Chase on the 10 point bonus and 10% going away yet, so I was wondering why I hadn’t heard this yet

  • Eggss4

    Bryce, same here. First I’ve heard of this, which is kind of strange.

  • Jtgray

    Hmm….with Sapphire bonus at 7% not much better than freedom at 10%, I suppose I’ll start looking for another checking account option with a decent sign up bonus and perhaps other benefits.

  • Eddy

    Isn’t the bottom line for those of us losing the benefit to use the Freedom card for the quarterly bonus categories and nothing else?

  • Eric W

    I had the Chase trifecta. I’m sad to see that they are changing the terms. I didn’t get any email about this. Weird.

  • Ced

    Data Point: in 2012 I earned 826 UR points via the 10% bonus and 2690 via the 10 points bonus. Switching to that new method and using overall 8208 points earned at 1x + 21304 at 4x (i.e on top) the new method would have given me a bonus of 2,951 UR points vs. the 3,516 I actually received.

    Why? Probably because I used the card on so many small purchases (under $10), that’s the real loss. By shifting these elsewhere and using the Freedom on the 5x categories one will spend $6,000 a year to earn 30,600 UR points at 5.1 overall.

    Not bad but definitely a loss, no doubt about it. Which card are you guys switching the small purchases to?

  • NY25

    Does anyone know if the new 10% bonus is going to apply to the bonus points earned for ultimate rewards mall purchases? If that’s the case, it seems like it makes sense to use the Freedom instead of the Sapphire Preferred for those purchases.

  • Rasputin_KY

    I haven’t gotten anything yet. When I do, I will close my checking account with Chase. I opened it only to get in on the Chase Trifecta. Since most of my <$10 is on fast food, CSP works better with 2.14% cash back rather than just 1.1% with Freedom.

  • Jtgray

    Technically a 10% bonus on points is better than 7%, so it might still be a good idea to also use the freedom for all purchases not in the sapphire 2x or 3x bonus categories.

  • Ced

    The CSP is not the only other card in the universe though. What’s worth more? 1.1 UR point or 1.0 SPG point?

    I tend to think the latter and it’s probably not even close.

  • Jtgray

    Yeah, you are probably right. I would say though one UR point pretty much trumps all other points besides SPG.

  • vortix

    My observations for those of you that have a Chase Better Banking account just to maintain eligibility for the Chase Exclusives program:

    - With the “new” Chase Exclusives program, it is no longer worthwhile to focus spend on small transactions.

    - Instead, it is only worthwhile to focus spend on the quarterly 5x categories.

    - If you max out your $1500 5x category spend, that works out to 30,000 UR points earned over the course of a year (a great value).

    - Under the “new” Chase Exclusives program, you would earn 3,000 bonus UR points on top of your 30,000 points.

    - I value 3,000 UR points at appx. $60.

    - $60 = 4% return on the $1,500 minimum balance required in your Chase Exclusives account to avoid monthly maintenance fees (though admittedly there are other ways, i.e. $500 monthly direct deposit, to avoid monthly maintenance fees).

    Bottom line: if you A) max out the 5x categories, B) value UR points at 2 cents each, and C) can’t earn better than 4% interest on the $1,500 minimum balance, it is worthwhile to keep the checking account open. Otherwise, it may be worth considering closing the checking account and skipping out on the Chase Exclusives program completely.

  • vortix

    Same question here – TPG…can you clarify this (or post a link to the new Chase Exclusives T&Cs)?

  • vortix

    “Remember, you can transfer your Freedom points to your Sapphire Preferred/Ink Bold accounts (or to anyone else’s)”…

    Sort of….please remember that the Chase T&Cs technically require direct UR -> UR transfers to happen between spouses (for personal cards) or co-workers (for business cards). There have been reports on Flyer Talk of people having their UR accounts shut down for transfers to 3rd parties.

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  • http://twitter.com/rubiety Ben Hughes

    He’s not talking about transferring them to 3rd parties, just transferring them to a airline-mile-transferrable Ultimate Rewards count is still under your name. I transfer all of my Freedom “Ultimate Rewards” (non-transferrable to airlines) into my Chase Ink Ultimate Rewards, which are transferrable to airlines. My name on both accounts.

  • http://www.facebook.com/mark.andrew.gross Mark Gross

    Current/former military can get a Chase checking account without keeping a minimum balance, for what it’s worth. I agree with Ryan; from now on all my non-category spend will go on SPG. Purchases through the UR Mall will go through Freedom IF points earned count toward annual bonus.

  • Abhi

    For Chase Sapphire 2x points – are seamless.com delivery orders treated under the dining category?

  • JL100

    Too bad Chase doesn’t allow their checking accounts in NC – don’t really understand why, would love to get one since I have my mortgage and credit cards with them.

  • Gerry

    For those grandfathered in, what happens if you add/substitute a trifecta-qualifying card? For example, I’ve been planning to apply for the Freedom MC and CSP MC in my next app party. Will the remaining bonus term(s) be grandfathered to them?

  • Bender

    +1
    Reports of that on FT. I’ve refrained since, not worth losing the UR ability.

  • David

    I just spoke with Chase and they report that pre-existing customers will be unaffected by the changes to the Exclusives program. Have you actually been affected, TPG?

  • Kopid905

    With a Chase Freedom card, is it possible to see somewhere how much you have spent toward the quarterly category? I always just have a rough guess.

  • Rob P

    Your statement will show the standard 1 point per dollar and the Bonus points from 5% categories, which is listed as 4 more bonus points per dollar. So divide the bonus category by 4 and you’ll know what you’ve spent during the statement period.

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  • http://twitter.com/grainsofrain juubee

    Do the annual bonus dividend post at the beginning of each year?

  • Hunter

    They technically wouldn’t allow a checking account in DC since they have no branches here. But I went to a branch in Texas while on vacation, opened up a checking account there, and then switched over my address to DC and everything worked fine.

  • Brmass15

    Any chance Chase brings back the 30k UR sign up bonus for new Freedom accounts?

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  • http://www.facebook.com/mark.sanchez.7771 Mark Sanchez

    I just checked my UR statement and I still have the 10 points bonus per transaction according to my end of April statement.

  • hardworkingcs

    For someone that has a Freedom card, but cancelled the checking accout, can I sign-up for a new checking account and still get the Exclusives program (of either flavor, the old 10/10 or the new 10% annual) added to my Freedom earnings? Or, am I totally out of luck now? Thanks.

  • Phil

    Just received the letter a day or two ago, telling me the changes will go into affect sometime in August. A real shame. I’m tempted to switch to a capital one cash back card that gives 1% and then 50% of that at the end of the year (so 1.5% total). Not sure whether that outweighs the category rewards of chase freedom. The only category I really max out is the restaurant one.

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  • Jasanna

    Thanks for this! My husband just got a Chase Freedom because his prior card was a student one and the credit line wasn’t high enough for a Sapphire. So I have a sapphire and he has a freedom. Hopefully after, he can get the sapphire as well. Wish we had chase banks here where we are!

  • jocelyn

    when in august? i have a freedom card and just opened a chase checking and was told the change is currently in effect.

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