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I think the Chase Freedom Unlimited is one of the best starter credit cards, especially for those with limited credit history. This no-annual-fee card is relatively easy to get approved for and offers solid earning rates on all your purchases with no bonus categories to keep track of.
It’s marketed as a cash-back card with points worth 1 cent each, and it recently changed its bonus offer from a fixed bonus value, to 3x points on up to $20,000 in purchases in the first year of holding the card. After that, the card will earn 1.5x on all purchases. But If you hold a Chase Ultimate Reward-earning card like the Chase Sapphire Preferred Card, you can combine your points and turn them into full-fledged transferrable Ultimate Rewards points. TPG values Ultimate Rewards points at 2 cents each, so this instantly doubles your return.
Many people might opt to get the Sapphire Preferred or Chase Sapphire Reserve first, but I’d argue that even though it doesn’t offer a clearly defined sign-up bonus, the Freedom Unlimited should still find a spot in your wallet sooner rather than later. This is because it’s restricted by Chase’s 5/24 rule, meaning that you’ll be automatically rejected if you’ve opened 5 or more cards in the last 24 months. Five cards might seem like a lot if you’re just starting your points journey, but once you cross that mark it’s hard (and costly) to get back under 5/24 and become eligible for Chase cards again.
What this means is that there are two separate questions to consider when applying for a Chase card: Do I want this bonus/want this card for its long-term benefits, and do I like it enough to use one of my 5/24 slots on it. Today we’ll try and answer those questions.
Is The Freedom Unlimited Worth a 5/24 Slot?
The first question is whether you should want this card in the first place, and the answer should be an unequivocal yes. When I’m talking to a friend about building a credit card strategy, even if they’re ready to commit and jump in headfirst, I’ll still often recommend starting with the Freedom Unlimited even before a Chase Sapphire card. There are a few reasons why, the most important of which is that the Freedom Unlimited is much easier to get approved for. Nothing deflates the excitement of a new award traveler more than getting rejected for the first credit card they apply for.
Many people come into this hobby with little experience using credit cards. The Freedom Unlimited is an easy introduction, and a great way to learn the mechanics of actually using and paying off a credit card. You can learn those lessons with any card, but with the Freedom Unlimited you can focus on the basics without also juggling rotating bonus categories or annual bonus caps in the back of your mind.
This card is revered in the travel rewards community because of the role it plays in forming the “Chase Trifecta,” the maximum earning combination that comes from pairing the Freedom Unlimited with the Chase Sapphire Reserve and Ink Business Preferred Credit Card. While those last two cards contribute redemption bonuses and strong bonus categories, the Freedom Unlimited does the heavy lifting by guaranteeing you a minimum return of 1.5x (3%) on all your everyday purchases. With the current sign-up bonus, you can get a minimum of 3x points (6% return) for the first 12 months.
Believe it or not, that means the no-annual-fee Freedom Unlimited is the most rewarding card in the Chase Trifecta. The Sapphire Reserve earns 3x on travel and dining and the Ink Preferred earns 3x on your first $150,000 of spending in travel, shipping, internet, cable, phone services and advertising purchases made with social media sites and search engines. But the Freedom Unlimited earns 3x on all those purchases and everything else. The only downside is that it does have a 3% foreign-transaction fee. But for purchases in the US it’s about as good as you’re going to get.
One of the biggest hesitations people have with getting the Freedom Unlimited is that its traditional sign-up bonus of $150 (or 15,000 points) doesn’t feel large enough to justify using a 5/24 slot. But if you spend $1,666 a month on your Chase Freedom Unlimited during the first year to maximize the 3x on the first $20,000 spent, you’ll walk away with a whopping 60,000 Ultimate Rewards points, which is more than the bonus on the Chase Sapphire Reserve.
Consider Product-Changing Instead
If you see the long-term value of holding the Chase Freedom Unlimited but are either over 5/24 or not willing to waste one of your limited spots on this card, you do have another option. You can product change any core Chase card (like a Sapphire or Chase Freedom) to the Freedom Unlimited, as long as the account has been open for more than one year.
This is especially useful for people who got both the Sapphire Preferred and Sapphire Reserve before Chase banned that. Downgrading one to the Freedom Unlimited will save you money on the annual fee and help you earn more points. Just remember to keep at least one paid Ultimate Rewards-earning card in your wallet (a Sapphire or an Ink Preferred), or you won’t be able to transfer the points earned on your Freedom Unlimited to hotel and airline partners.
The new Chase Freedom Unlimited bonus, offering 3x points on every purchase you make for the first year up to $20,000, is emblematic of a shift in the credit card industry to reward customers who spend more, not just those who open more accounts. Not only is this an incredibly valuable bonus opportunity if you’re able to put a decent amount of spend on the card, but the Freedom Unlimited is also a great addition to any long-term Chase Ultimate Rewards earning strategy.
Know before you go.
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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