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It’s hard to believe it’s already been two years since the Chase Freedom Unlimited first launched. This card’s become a staple in many award travelers’ wallets, thanks to its strong return on everyday, non-bonus spending and its power when paired with Ultimate Rewards-earning cards. If you’ve just opened this card or are considering adding the Freedom Unlimited to your wallet, this guide will help you decide when it’s the best choice to use for a purchase, and when another credit card could serve you better.
The Chase Freedom Unlimited currently forgoes the standard sign-up bonus formula. Instead of an offer for $150 back after you spend $500 in the first 3 months from account opening, there’s a bonus based on your first card-membership year: Earn 3% back on all purchases in your first year up to $20,000 spent. So if you maxed this out without a having an Ultimate Rewards-earning card, you’d earn $600 back.
The Freedom Unlimited earns you 1.5% cash back (after you meet $20,000 in the first year, and from your second account year on) on everyday spending and has no annual fee. Given the lack of bonus categories, this card makes the most sense for spending where you wouldn’t otherwise earn a category bonus, since you’ll get a maximum of 1.5% cash back no matter what or where you buy.
As always, it’s worth taking a minute to mention Chase’s 5/24 rule. The issuer will deny your applications for most of its credit cards if you’ve opened five or more credit cards (from any issuer) over the last 24 months. For this reason, we generally recommend prioritizing Chase credit card applications over apps for cards from other issuers, since once your five “slots” are filled, you’ll be out of luck for the time being.
Not Your Average Cash-Back Credit Card
It’s important to note that that the Freedom Unlimited — like its no-annual-fee sibling, the Chase Freedom — is not your average cash-back card. If you don’t hold any other Chase cards, the points these two cards earn you are awarded in the form of cash-back points. But if you also hold a card that earns full-fledged Ultimate Rewards points, like the Chase Sapphire Preferred Card or Ink Business Preferred Credit Card, their points can be transferred to a variety of travel partners, including British Airways, Hyatt, Marriott and United.
So 1.5% cash back on all purchases with the Chase Freedom Unlimited equals 1.5 Ultimate Rewards points per dollar — a 3% return based on TPG’s latest valuations. (This also means you’ll get a 10% return on bonus category spending with the original Chase Freedom.) So if you maxed out the Freedom Unlimited’s 3x welcome offer by spending $20,000 in your first year, you’d earn 60,000 Chase points, worth $1,200.
Note that you don’t need one of these more expensive cards to start earning Ultimate Rewards points; you just need to hold one when you want to transfer points an airline or hotel program. If you don’t also have a card that earns Ultimate Rewards points, the Freedom cards simply earn cash back that you can redeem to offset any purchases.
With all that in mind, when should you use the Chase Freedom Unlimited Card to get the best return on your spending?
When It Makes Sense: Earning UR Points on Everyday Spending
If there’s one clear use case for this card, it’s non-bonus-category spending — things like shopping at most retail stores, purchasing appliances or paying your taxes. In terms of return on everyday purchases, the Freedom Unlimited and its 3% return is hard to beat among personal credit cards.
However, to get the 3% return from the Chase Freedom Unlimited, you need to hold (or plan to hold) an Ultimate Rewards-earning card like the Chase Sapphire Preferred or Chase Sapphire Reserve. Otherwise, you won’t be able to transfer to Chase’s 13 travel partners; your rewards will be limited to flat cash back or points worth 1 cent each toward merchandise, gift cards or travel reservations made through the Ultimate Rewards travel portal. So without a UR-earning card enabling you to transfer rewards from your Chase Freedom Unlimited to a partner, you’d be getting a more modest return of 1.5%.
When It Doesn’t Make Sense: Earning Cash-Back Rewards, Bonus Category Spending, Purchases Abroad
First of all, note that the Freedom Unlimited has a 3% foreign-transaction fee, so you won’t want to use it on purchases made abroad. For international travel, make sure you have a credit card that waives foreign-transaction fees so you don’t rack up hundreds of dollars in easily avoidable charges. That issue aside, when should you use another credit card instead of the Freedom Unlimited?
Sure, 1.5% cash back on all purchases is better than nothing, but you can do better — which is why you shouldn’t use the Chase Freedom Unlimited as a strictly cash-back card. For example, the Citi® Double Cash Card earns you 1% back on everything at the time of purchase, plus another 1% back as you pay your bill. For other options, see our post on the best cash-back credit cards.
The Freedom Unlimited Card’s strong point is 1.5% cash back (or 1.5x Ultimate Rewards) on every purchase, but it can’t compete when it comes to bonus category earning potential since it offers no elevated categories of its own. Even among cash-back cards, there are several better choices than the Freedom Unlimited when it comes to expenses that earn bonus points or cash back, including the previously mentioned Chase Freedom. There’s also the Discover it Card, which, like the Freedom, earns you 5% cash back on up to $1,500 in purchases in rotating quarterly categories and even earns you double cash back on everything during your first cardmember year.
As for non-cash-back cards that earn you the best return on bonus category spending, the list is long. Here are some of the highlights for each category:
- Airfare: The Platinum Card® from American Express — Earn 5x points on flights purchased directly from the airlines — equal to a return of 10% based on TPG’s valuations. This card is currently offering a welcome bonus of 60,000 points after you spend $5,000 in your first 3 months of card membership, though you may be targeted for a 100,000-point offer via the CardMatch tool. There’s an annual fee of $550 (see rates & fees), and the card has a mile-long list of high-end perks like airline lounge access and annual credits. For other solid options for airline purchases, see this post.
- Groceries: Amex EveryDay Preferred Credit Card from American Express — Earn 3x points at US supermarkets (on up to $6,000 in purchases per year), plus get a 50% points bonus when you use your card 30 or more times on purchases within a billing period. That means you can get a return of up to 9% on grocery store purchases (again, based on TPG’s monthly valuations). This card currently offers a welcome bonus of 15,000 points when you make $1,000 in purchases in the first three months. Another strong option for groceries is the American Express® Gold Card, which earns 4x points at US restaurants on the first $25,000 spent per year (then 1 point per dollar). That equals an 8% return on spending. See our guide for other credit cards to use for grocery purchases.
- Dining: Chase Sapphire Reserve — Earn 3x points on all dining and travel purchases — a 6% return — with no cap to the amount of bonus points you can earn, and earn 1 point per dollar on everything else. The Citi Prestige Card now offers 5x points on dining, equal to an 8.5% return based on our valuations. And the previously mentioned Amex Gold is also a great option, specifically for purchases at US restaurants, where it earns 4x points (equal to an 8% return). See our guide for other credit cards to use for dining purchases.
- Office Supplies: Ink Business Cash Credit Card — Earn 5% back on the first $25,000 spent in combined purchases each account anniversary year at office supply stores and on internet, cable and phone services (then 1% back). This card works the same as the Freedom and Freedom Unlimited, in that the cash back can be redeemed as transferable points if you also have an Ultimate Rewards-earning credit card. So you could get a 10% return on office supplies with this card. See our guide for other credit cards to use for office supply purchases.
The Chase Freedom Unlimited Card can be a great option for everyday spending — especially when you can earn 1.5x Ultimate Rewards on everything — but it isn’t necessarily the best option for cash-back rewards or bonus category spending. This no-fee card is worth a space in your wallet if earning Chase Ultimate Rewards points is part of your award-travel strategy, but make sure to evaluate when it will get you the best return on purchases.
For rates & fees of the Amex Platinum, click here.
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TPG'S BONUS VALUATION: $600
CARD HIGHLIGHTS: No annual fee + earn 1.5% cash back on all purchases after you meet the $20,000 cap
- New Offer! Double Cash Back: Earn 3% cash back on all purchases in your first year up to $20,000 spent. After that 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 17.24-25.99%. Balance transfer fee is 3% of the amount transferred, $5 minimum
- No minimum to redeem for cash back
- Cash Back rewards do not expire as long as your account is open
- Free credit score, updated weekly with Credit Journey℠
- No annual fee