Chase Freedom vs. Chase Freedom Unlimited: Which Card Is Right for You?

Dec 25, 2019

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Chase offers an impressive array of personal credit card products, ranging from the ultra-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 incredibly important to have a clear strategy about which Chase cards you want to add to your wallet.

comparing the chase freedom and chase freedom unlimited

The Freedom and Freedom Unlimited often get thrown around interchangeably because of the overwhelming similarities between them. In fact, other than the earning rates the two cards are identical. Here are how the two cards stack up:

Chase Freedom Unlimited® Chase Freedom®
Annual fee N/A N/A
Sign-up bonus Earn $150 (15,000 points) after spending $500 in the first 3 months Earn $150 (15,000 points) after spending $500 in the first 3 months
Earning rate Earn an unlimited 1.5% cash back (1.5x points) on all purchases Earn 5% back (5x points) on your first $1,500 spent in rotating quarterly bonus categories such as gas stations or department stores. After that, earn 1% (1x) 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 16.49 – 25.24%. 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 – 25.24%.
Foreign transaction fee 3% 3%

While 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), at the moment the two cards are offering an identical bonus of $150 (or 15,000 points) after spending $500 in the first three months. That spending requirement is quite low, making this a relatively attractive bonus for a no-annual-fee card. Scrolling down the chart, we can see that the cards really are identical except for their earning structure, right down to the 0% intro APR offer and the 3% foreign transaction fee.

earning rate

The main difference between these cards lies in the earning structure. The Chase Freedom Unlimited earns an unlimited 1.5% back on all purchases, while the Chase Freedom earns 5% back on your first $1,500 spent in rotating quarterly categories, and 1% back on everything else. The rotating categories for 2019 have included gas stations and drugstores in the first quarter and grocery stores in the second quarter. It’s worth noting that you have to register your Freedom card every quarter in order to earn 5x on the bonus categories, but that process is incredibly simple and Chase will send out multiple reminder emails when it’s time to do so.

I think a lot of people are drawn to the Chase Freedom because the 5x bonus categories sound flashy, but the math doesn’t really back it up. There’s a reason I recommend the Freedom Unlimited as a starter card to my friends instead of the Freedom. Let’s take a look at a few different scenarios to see why the Freedom Unlimited is better for most people year after year.

Scenario #1: You max out your 5x on the Freedom every quarter of the year. This means you earn 7,500 bonus points a quarter (5 points x $1,500 spend), or 30,000 a year (7,500 x 4).

Scenario #2: You max out three of the quarterly bonus categories, but don’t spend anything on the fourth. Maybe you’re out of town, or the category that quarter is one you don’t spend in.

Scenario #3: You’re not a big spender, but you still manage to earn 80% of the available 5x bonus each quarter of the year. That means you spend $1,200 on each 5x category, and earn 6,000 points a quarter, or 24,000 points a year.

The table below summarizes these options, as well as how much you would have had to spend during each year on the Freedom Unlimited to come out ahead with its 1.5x earning rate.

Scenario Yearly Points Earning With Chase Freedom Breakeven First Year Spending With Freedom Unlimited
#1: Maxing out all 4 quarterly bonuses 30,000 $20,000
#2: Maxing out 3/4 of the quarterly bonuses 22,500 $15,000
#3: Earning 80% of each quarterly bonus 24,000 $16,000

As you can see above, even if you earn every available bonus point with the Chase Freedom, it takes just over $1,500 in monthly spending to come out ahead with the Freedom Unlimited thanks to the cards unlimited 1.5% cash back/1.5x points earning. I’ll assume that most people (myself included) aren’t able to max out every quarter, which is something you’ll need to consider when deciding for yourself.

upgrading your redemption option

It’s rare that you’ll see me getting this excited about a family of cash-back credit cards, but the Chase Freedom and Freedom Unlimited have the potential to be so much more than that, with both cards offering identical redemption options. Your cash back will be issued in the form of “points” that are worth 1 cent each, but you can potentially get twice as much value from them.

Chase lets you pool points between cards, so if you also hold a premium Chase Ultimate Rewards-earning card (those that carry annual fees, such as the Sapphire Reserve, Sapphire Preferred or Ink Business Preferred) you can transfer your points there and turn them into full-fledged Ultimate Rewards points. TPG values Ultimate Rewards points at 2 cents each thanks to Chase’s impressive list of hotel and airline transfer partners, meaning you really can do much better with these cards than simply settling for cash back.

Further Reading: Ultimate guide to points pooling and sharing

who are these cards for?

Whether you opt for the Freedom or Freedom Unlimited (or both), these cards fit well into just about every type of award travel strategy out there. 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 and can help you build a strong relationship with Chase while also 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 Freedom is worth keeping around for the 5x bonus categories as well. In fact, the Freedom Unlimited is so valuable that it’s earned a place in the “Chase Trifecta,” the valuable trio of Ultimate Rewards earning credit cards that offer the ultimate combination of bonus categories, redemption options, and travel perks. The Freedom Unlimited was the second credit card I ever applied for, and it’s still one of the cards in my wallet that gets the most use year after year.

Why not get both?

I’ll admit that I created a bit of 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 non-bonus spending.

This same logic applies if you have another card you prefer to use for everyday spend. While the Freedom Unlimited is one of the most rewarding options for non-bonus spending, cards like the Blue Business® Plus Credit Card from American Express and the Capital One® Venture® Rewards Credit Card give it a run for its money. If you wouldn’t be using the Freedom Unlimited heavily, the Freedom becomes a much better choice. If you think you can max out all four bonus categories, an extra 30,000 Ultimate Rewards points a year would be very nice to have.

Bottom Line

Unless you’re fully able to max out all four of the Freedom’s annual bonus categories, most people will come out ahead picking the Freedom Unlimited instead. These two cards’ real value comes from their long-term earning potential. Between that and the 5/24 rule, it’s incredibly important for you to run the numbers and have a clear strategy in place before you decide which of these cards to apply for.

Chase Freedom Unlimited®

SIGN-UP BONUS: $150 after spending $500 on purchases in the first 3 months.

TPG'S BONUS VALUATION*: $150

CARD HIGHLIGHTS: No annual fee + earn 1.5% cash back on all purchases

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 - 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5.
  • No annual fee
  • No minimum to redeem for cash back
  • Cash Back rewards do not expire as long as your account is open
Intro APR on Purchases
0% Intro APR on Purchases for 15 months
Regular APR
16.49% - 25.24% Variable
Annual Fee
$0
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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