Chase cash-back showdown: Chase Freedom vs. Chase Freedom Unlimited
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Update: Some offers mentioned below are no longer available. View the current offers here – Chase Freedom Unlimited
The Chase array of personal credit card products ranges from the premium Chase Sapphire Reserve all the way to the “cash-back” Chase Freedom and Chase Freedom Unlimited cards. With so many options, picking the right card can be difficult. Thanks to Chase’s 5/24 rule (which means that you’ll automatically be rejected for most Chase cards if you’ve opened 5 or more cards in the last 24 months), it’s important to have a clear strategy about which Chase cards you want to add to your wallet.
Today, we’re looking at two of Chase’s no-annual-fee credit cards — the Chase Freedom and Chase Freedom Unlimited. Both earn points that by themselves can only be redeemed as cash back at 1 cent per point. However, you can pair either card with Chase Ultimate Rewards cards such as the Chase Sapphire Preferred Card to turn those points into full-fledged Ultimate Rewards points. Then you can redeem the points for a bonus through the Chase travel portal or by transferring them to partners.
Related reading: Maximizing the Chase Trifecta
Let’s dive into the details of each card to see which makes more sense for you.
The Freedom and Freedom Unlimited often get thrown around interchangeably because of the numerous similarities between them. In fact, other than the earning rates, the two cards are identical. Here are how they stack up:
|Card||Chase Freedom||Chase Freedom Unlimited|
|Sign-up bonus||Earn $200 (20,000 points) when you apply directly through Chase after spending $500 in the first three months||Earn $200 (20,000 points) when you apply directly through Chase after spending $500 in the first three months|
|Earning rate||Earn 5% back (5x points) on your first $1,500 spent in rotating quarterly bonus categories. After that, earn 1% (1x) on all purchases||Earn an unlimited 1.5% cash back (1.5x points) on all purchases|
|Redemption options||Redeem points as cash back, OR transfer them to Ultimate Rewards points if you also hold a premium Chase card (Chase Sapphire Reserve, Chase Sapphire Preferred Card or Ink Business Preferred Credit Card)||Redeem points as cash back, OR transfer them to Ultimate Rewards points if you also hold a premium Chase card (Chase Sapphire Reserve, Chase Sapphire Preferred Card or Ink Business Preferred Credit Card)|
|Perks||0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.99 – 23.74% applies.||0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.99 – 23.74% applies.|
|Foreign transaction fee||3%||3%|
The information for the Chase Freedom and Ink Business Preferred cards has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Chase has offered a few different welcome bonuses on the Freedom Unlimited in the past (including 3% back/3x points on your first $20,000 in purchases made during the first year), but at the moment the two cards are offering an identical bonus of $200 (or 20,000 points) after spending $500 in the first three months — but only when you apply directly through Chase’s website. That spending requirement is quite low, making this a relatively attractive bonus for two no-annual-fee cards. Scrolling down the chart, we can see that the cards really are identical except for their earning structure, right down to the intro APR offer and the 3% foreign transaction fee.
When to get the Chase Freedom
Although the two cards are incredibly similar, there are some situations where it makes more sense for you to get the Chase Freedom over the Unlimited.
Related reading: Check out our full Chase Freedom review
Your spending habits change throughout the year
The Chase Freedom offers 5%/5x rotating categories that change each quarter. If you maximize those categories, you can earn $300 bonus cash back in points each year on those bonus categories alone (or $600 in total value if you also have a Chase Ultimate Rewards card to pair with it). Although the categories don’t repeat exactly in each quarter of each year, there are spending categories you’ll tend to see repeated, including gas stations, wholesale clubs, grocery stores, drug stores and restaurants. More novel categories are often thrown in as well, such as streaming services, gym memberships, assorted online retailers like Amazon, home improvement and more.
For example, the Q2 2020 categories are grocery stores, gym memberships, fitness clubs and select streaming services — all great while we’re all staying at home. If you are someone who has changing spending habits, or a card lineup that can accommodate shifting spend onto this card to maximize categories, this could be the better option.
Related reading: Best cash-back cards for each spending category
You already have a card for nonbonus spending
The Chase Freedom Unlimited is a great card for expenses that don’t fall under other bonus categories. But it’s a bit redundant to have a 1.5%/1.5x flat-rate credit card if you already have a flat-rate card such as the Citi® Double Cash Card or Capital One® Venture® Rewards Credit Card.
In that case, the rotating categories of the Freedom will make a better addition to your wallet.
Related reading: Best cards for everyday spending
When to get the Chase Freedom Unlimited
On the other hand, there are scenarios where the Freedom Unlimited could provide more value.
Related reading: Check out our full Chase Freedom Unlimited review
You won’t maximize rotating categories
If you are maximizing the Freedom bonus categories, that’s a solid $300 in rewards (or 30,000 points) each year. But if you aren’t going to use those categories each quarter, you’ll be better off with the flat 1.5%/1.5x on every purchase.
Let’s say you only end up using the rotating categories about half of the time. That’s around $150 (or 15,000 points) per year in rewards. If you are spending around $835 per month on the card (regardless of categories), you’ll end up better off with the Chase Freedom Unlimited. Of course, the less you think you’ll use the categories, the lower the spending threshold that you’ll still end up on top with the Chase Freedom Unlimited.
You are planning on using it as your primary card
You’re only earning rewards on a select number of categories with the Chase Freedom. It’s an ideal card to pair with others, but it leaves a lot of potential rewards on the table if it’s your only credit card. If you are a beginner who doesn’t have other cards yet, the Chase Freedom Unlimited is where I would suggest starting out. You’re getting guaranteed rewards across every purchase without having to remember to activate categories.
The Chase Freedom Unlimited is also a great card to pair (in fact, it makes up one-third of our Chase Trifecta), but it’s pretty interchangeable with the Chase Freedom in that respect. But for those who are putting most of their spending on this card across many spending categories, a flat rate is a better option than rotating categories.
I’ll admit that I created a false dichotomy here — you don’t necessarily have to choose one over the other. If you have multiple 5/24 slots left with Chase and want both of these cards, by all means consider holding both. You can put bonus spending on the Freedom, taking advantage of the 5x whenever you can, and use the Freedom Unlimited for a nice 1.5x return on all nonbonus spending.
Related reading: Maximizing the Chase Quartet
Whether you opt for the Freedom or Freedom Unlimited (or both), these cards fit well into just about every type of credit card strategy. If you’re new to the world of points and miles and have a more limited credit history, these cards are easier to get approved for than premium cards such as the Chase Sapphire Reserve. They can also help you build a strong relationship with Chase while earning valuable rewards (just resist the temptation to redeem them for cash back until you get a Sapphire later). Even if you’re a more advanced award traveler, you can get a lot of value out of these cards. The Chase Freedom Unlimited is one of the best cards for everyday spending with its 1.5x return, and with no annual fee, the Chase Freedom is worth keeping around for the 5x bonus categories as well.
Additional reporting by Ethan Steinberg.
Featured image by The Points Guy.
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
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