When should you use the Chase Freedom Unlimited credit card?

Dec 31, 2019

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It’s hard to believe it’s already been nearly three years since the no-annual-fee Chase Freedom Unlimited credit card first launched. This card has become a staple in many award travelers’ wallets, thanks to its strong return on everyday, non-bonus spending and its power when paired with the three Ultimate Rewards-earning cards — the Chase Sapphire Preferred, the Chase Sapphire Reserve and the Ink Business Preferred Credit Card. The information for the Chase Freedom Unlimited and Ink Business Preferred has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

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 Basics

The Chase Freedom Unlimited credit card has no annual fee, which makes it a no-brainer to keep in your wallet. You’ll earn a $150 cash back bonus for signing up for this card when you spend $500 on purchases within the first three months.

The Freedom Unlimited earns 1.5% cash back on every purchase. 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 the same fixed amount of cash back no matter what or where you buy. If you hold another credit card that earns bonus points for each dollar spent on travel or dining out, use that card instead for those purchases.

As always, it’s worth taking a minute to mention Chase’s 5/24 rule. Chase will deny your applications for most of its credit cards if you’ve opened five or more credit cards — from any issuer — within the 24 months prior to your current application. For this reason, TPG generally recommends prioritizing your Chase credit card applications first, then applying for cards from other issuers after you’re over your 5/24 limit. That’s because once your five “slots” are filled, you can’t pick up any new Chase credit cards for two full years.

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

But if you also have a credit card that earns full-fledged Ultimate Rewards points, such as the Chase Sapphire Preferred Card or Ink Business Preferred Credit Card, you can convert that 1.5% cash back earned on the Chase Freedom Unlimited into 1.5 Ultimate Rewards points per dollar — a 3% return based on TPG’s latest valuations of Ultimate Rewards points at 2 cents apiece. (This also means you’ll get a 10% return on bonus category spending with the original Chase Freedom.) So your $150 to $200 sign-up bonus would be worth 7,500 to 10,000 Ultimate Rewards points.

You don’t need one of these more expensive cards to begin earning Ultimate Rewards points; you just need to hold one when you want to transfer points to an airline or hotel program.

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 Points on Everyday Spending

The Freedom Unlimited and an Ultimate Rewards-earning card make a power duo. (Image by The Points Guy)

If there’s one clear use case for this card, it’s for spending in non-bonus categories. We’re talking purchases like shopping at most retail stores, purchasing appliances or paying your taxes.

Remember TPG values Ultimate Rewards points at 2 cents apiece, and you earn 1.5 UR points on every dollar you spend. But to maximize that 1.5x return, you need to hold — or plan to hold — an Ultimate Rewards-earning card such as the Chase Sapphire Preferred or Chase Ink Business Preferred. Otherwise, you won’t be able to transfer points to Chase’s airline and hotel partners; your rewards will be limited to flat cash back or points worth just 1 cent each toward merchandise, gift cards or travel reservations made through the Ultimate Rewards travel portal.

So to summarize again: Without a Ultimate Rewards-earning card that allows you transfer rewards from your Chase Freedom Unlimited to a partner, you’d be getting a more modest return of 1.5% cash back on the Freedom Unlimited.

When It Doesn’t Make Sense: Earning Cash Back Rewards, Bonus Category Spending, Purchases Abroad

First of all, note that the Freedom Unlimited charges a 3% fee on foreign transactions, so you won’t want to use it on purchases made abroad. For international travel, make sure you have a credit card with no 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 than that, especially if you don’t have an Ultimate Rewards-earning card. So definitely don’t use the Chase Freedom Unlimited strictly as a cash-back card. For example, the Citi® Double Cash Card earns you 2% cash back (1% back on everything at the time of purchase, plus another 1% back as you pay your bill). There’s also the Discover it Cash Back, which, like the Freedom, earns you 5% cash back on up to $1,500 in purchases in rotating quarterly categories once you enroll. Discover will also match the cash back you’ve earned at the end of your first year. The information for the Citi Double Cash card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Interested in cash-back credit cards? These are the best cash back credit cards

Generic card, groceries, supermarket, cashier
You can do better than the Freedom Unlimited when it comes to maximizing grocery purchases. (Photo by GeorgeRudy/Getty Images)

Don’t use the Chase Freedom Unlimited for these purchases

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 purchases in your first three months of card membership, although you may be targeted for a 100,000-point offer via the CardMatch tool (offer subject to change at any time). There’s an annual fee of $550 (see rates and fees), and the card has a mile-long list of high-end perks such as airline lounge access and annual credits.

Related: The best credit cards for airfare purchases

A great competitor in the airfare category is the Chase Sapphire Reserve, especially if you already hold other Chase credit cards. As mentioned above, holding the Sapphire Reserve will allow you to convert rewards from cards such as the Freedom Unlimited into Ultimate Rewards points for better value. An even more affordable option is the Chase Sapphire Preferred, which also allows you to convert Freedom Unlimited earnings into Ultimate Rewards points but only costs $95 a year to the Chase Sapphire Reserve’s $550 annual fee.

Groceries at U.S. supermarkets

American Express® Gold Card. Earn 4x Membership Rewards points on dining worldwide and U.S. supermarkets on up to $25,000 in eligible purchases per year (then 1x point). Additionally, you can earn 3x points on travel booked directly with airlines or through amextravel.com, and you’ll earn 1 point per dollar on everything else. This card also comes with great additional benefits including an up to $120 annual dining credit; up to $100 airline fee credit; baggage insurance and more.

Related: These are the best credit cards for groceries

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 on dining, where it earns 4x points (equal to an 8% return). The information for the Citi Prestige card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

American Express® Gold Card. Earn 4x Membership Rewards points on dining worldwide and U.S. supermarkets on up to $25,000 in eligible purchases per year (then 1x point). Additionally, you can earn 3x points on travel booked directly with airlines or through amextravel.com, and you’ll earn 1 point per dollar on everything else. This card also comes with great additional benefits including an up to $120 annual dining credit; up to $100 airline fee credit; baggage insurance and more.

Related: These are the best credit cards for dining

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. The information for the Ink Business Cash has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related: These are the best credit cards for office supplies

Bottom Line

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-annual-fee card is worth a slot 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 and fees of the Amex Platinum, click here.

Featured image by The Points Guy.

Chase Sapphire Preferred® Card

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.

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
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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