Credit card showdown: Chase Freedom vs. Chase Freedom Unlimited

Aug 3, 2020

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No matter what kind of cardholder you are, Chase probably has a credit card that can fit your needs. Chase’s array of personal credit card products ranges from the premium Chase Sapphire Reserve all the way to the “cash-back” Chase Freedom (No longer open to new applicants) and Chase Freedom Unlimited cards. With so many options, picking the right card can be difficult.

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Thanks to Chase’s 5/24 rule (which means that you’ll automatically be rejected for most Chase cards if you’ve opened five 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.

Comparison overview

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
Annual fee $0 $0
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) 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 (activation required). After that, earn 1% (1x) on all purchases Earn 5% back (5x) on the first $12,000 spent on groceries (excluding Walmart and Target) for your first account year

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, then a variable APR of 14.99 – 23.74% applies. 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99 – 23.74% applies.
Foreign transaction fee 3% 3%

The information for the Chase Freedom and Chase Freedom Unlimited has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

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.

Comparing earning rates and current bonuses

The Chase Freedom offers 5% back on the first $1,500 spent on rotating categories. During Q3 2020, the designated categories are Amazon.com and Whole Foods Market. The Chase Freedom is currently offering the “best Freedom bonus,” according to Chase’s site, with $200 back after you spend $500 in the first three months — although, you do have to apply through Chase for this offer.

The Chase Freedom Unlimited offers 1.5% back on your spending. But right now, cardholders can also earn a $200 bonus after spending $500 in the first three months and 5% on the first $12,000 spent in the first year on eligible grocery purchases. That means this current welcome bonus is worth up to $800 total in cash back, or $1,600 in value according to TPG valuations if you also have a premium Chase card.

Currently, the Chase Freedom Unlimited is undoubtedly offering the superior sign-up offer. Over the course of your first year, you can earn up to $300 in cash back with the 5% bonus categories on the Freedom and $200 from the sign-up bonus — $500 in total cash back or $1,000 if you have a premium Chase card — the Chase Sapphire Reserve, the Chase Sapphire Preferred or the Ink Business Preferred — to pair with the Freedom. Compared to the $1,600 in bonus earning you can get in the first year of the Freedom Unlimited, the latter certainly comes out ahead.

When to get the Chase Freedom

(Photo by John Gribben for The Points Guy)
The two cards are similar, but have different rewards structures that can make one more valuable than the other depending on your spending habits. (Photo by John Gribben for The Points Guy)

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 Q3 2020 categories are Amazon and Whole Foods Market — both great categories if while we’re all staying at home and potentially spending more on online shopping and groceries. 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 non-bonus 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% 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

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

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% 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. Add in the current offer for 5% on groceries, and the Chase Freedom Unlimited is an awesome beginner credit card.

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.

Remember, you can have both

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 5% whenever you can, and use the Freedom Unlimited for the 5% back on groceries in your first year and a nice 1.5% return on all non-bonus spending.

If you are going to get both cards, I recommend getting the Chase Freedom Unlimited first. We don’t know how long this current sign-up bonus will last, and you do not want to miss out on it. While the Freedom also has a slightly elevated offer right now if you apply through Chase, it’s only $50 more than the previous standard bonus, and it’s been around for a hot minute at this point. When timing your applications, your safest bet is to grab the Chase Freedom Unlimited first.

Related reading: Maximizing the Chase Quartet

Bottom line

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 1.5% return, and with no annual fee, the Chase Freedom is worth keeping around for the 5% bonus categories as well.

Additional reporting by Ethan Steinberg. 

Featured image by The Points Guy. 

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Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

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