Chase Freedom Ends 10% Annual Bonus & Other Changes

Update: Some offers mentioned below are no longer available.

(The Chase Freedom is no longer open to new applicants)

On the heels of the recent Chase Sapphire benefit changes (like the addition of primary auto rental insurance and the elimination of the annual 7% points dividend), Chase is making some major changes to the Chase Freedom program as well. However, unlike the changes to Sapphire Preferred (which were a mixed bag), these appear to all be negative.

Per the Chase Freedom site, the new changes are as follows:

For Chase Checking Customers: After the closing date on your December 2015 billing statement, you will no longer earn the 10% annual bonus that you get on the cash back you’ve already received for new purchases. If you have an open Chase checking account on that date, you will receive your final 10% annual bonus award in early 2016.

This is bad - if you max out the $6,000 a year in 5x categories, you earn 30,000 total Ultimate Rewards points. The 10% bonus in that case would be 3,000 UR points, which I value at 2.1 cents apiece, so that's a yearly loss of $63 in value (and that's only if you max out the 5x categories).

Getting cash: You can continue to redeem your rewards points for cash through a statement credit or direct deposit into an eligible checking or savings account. Paper checks will no longer be available after November 15, 2014. (Same change as Sapphire Preferred- no big deal).

Earn on travel: You will continue to earn an extra point for each $1 of airfare and hotel accommodations booked through the Ultimate Rewards Travel Center until December 31, 2015. After that, you will no longer earn an extra point. Chase says they may periodically offer you ways to earn bonus points through the program. (Same change as Sapphire Preferred - disappointing, but there are other portals to buy and earn extra points from).

Phone booked round-trip ticket redemption: You can continue to use your points for travel with no blackout dates. However, after October 25, 2014, all options to redeem for airline tickets based on a fixed amount of points will be discontinued. All travel redemptions will be calculated based on the actual cost. This too is bad - you used to be able to get up to 1.34 cents per point via this method; after the change is implemented, that will drop to 1 cent.

My Analysis

The major negative here is that Chase is removing the extra 10% annual bonus that you get on cash back. It was only last year that Chase modified the Chase Freedom 10% Bonus by removing the 10% bonus on all purchases and the 10 point per transaction bonus. They replaced it with the 10% annual bonus at the end of the year on all purchases; however that bonus is now going to be removed as well.

These changes are all varying degrees of bad, and I hope Chase decides to add some perks back to the card before they all go into effect. In the meantime, I'd consider the American Express Everyday card, which (like Freedom) has no annual fee, and earns full Membership Rewards points rather than a cash back equivalent.

The Amex Everyday also earns 2 points per dollar at supermarkets and 1 point per dollar spent elsewhere. In addition, if you make 20 or more purchases in a billing cycle, this card earns a 20% points bonus on all purchases that month (the bonus is retroactive, so you'll earn it on the first 20 purchases as well as any future purchases that month). Taking out the rotating 5x categories and without the 10% bonus, the Freedom card will only earn 1 point per dollar spent, with no fixed category bonuses and no transfer partners (unless you also have a Sapphire Preferred or Ink Bold/ Plus, in which case you can combine points from your Freedom card with Ultimate Rewards points, and then transfer to one of the 11 Ultimate Rewards partners). I imagine the marketing team for the Amex Everyday card is cheering these changes, but as a longtime Chase Freedom cardholder, I'm not happy about the loss of benefits.

What are your thoughts? Does Freedom still have a home in your wallet, or will you look into other no-fee options?

Hat Tip: TPG Reader Daniel