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Is Chase Freedom’s 5% Cash Back Right for You?

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Chase Freedom Review

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The Chase Freedom card is one of the most popular rewards credit cards offered due to its valuable rewards program and low fees. So why has this card been so successful? Let’s take a look.

What Is the Chase Freedom?

Chase Freedom®

Apply Now
on Chase's secure website
Card Details
Intro Apr:
0% for 15 months on purchases

Ongoing Apr:
15.99% - 24.74% Variable

Balance Transfer:
Intro: 0% for 15 months

Annual Fee:
$0

Credit Needed:
Excellent-Good
Snapshot of Card Features
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Enjoy new 5% categories each quarter like gas stations, restaurants and drugstores
  • Unlimited 1% cash back on all other purchases – it’s automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.99-24.74%. Balance transfer fee is 5% 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
  • No annual fee

Card Details +

This card features 5% cash back on up to $1,500 spent each quarter at eligible merchants, and 1% cash back on all other purchases. For example, for the first quarter of 2017 (through March 31) the bonus categories are for gas station and local commuter transportation purchases. To receive the 5% cash back on eligible purchases, cardholders must go online and activate the bonus categories by a predetermined date during the quarter. Thankfully, the activation can be done throughout most of the quarter, and once completed, it applies to previous purchases during the quarter. In fact, you can even activate the bonus categories by email, text message, over the phone, at a Chase branch or even at a Chase ATM.

Points are earned in Chase’s Ultimate Rewards program, and are worth one cent each toward gift cards, merchandise, travel reservations or cash back. There is no limit to the amount of points you can earn, and points never expire. In addition, bonus points are also available through the bank’s online shopping portal. There is no annual fee for this card, but there is a 3% foreign transaction fee imposed on all charges processed outside of the U.S.

Is There a Sign-Up Bonus?

Chase is currently offering new cardholders a $150 bonus if they spend $500 using the card within their first three months of opening an account. As with any credit card offer, check with the issuer to see the latest deals as they are subject to change.

Chase Freedom’s Advantages

Cardholders who can utilize the bonus categories can earn hundreds of dollars in cash back each year. The bonus categories typically include popular types of purchases such as grocery stores, restaurants and gas stations. This card also offers unlimited 1% cash back, so you earn rewards on all of your purchases, not just those in the bonus categories.

Chase Freedom’s Disadvantages

Some cardholders do not like having to keep track of bonus categories of spending that change each quarter, and some cardholders find it burdensome to have to activate the 5% categories, rather than being automatically enrolled. Earning 1% cash back on purchases outside the bonus categories is no longer considered very competitive, now that there are other cards offering 1.5% to 2% rewards as cash back or travel statement credits.

New card members get a 0% introductory APR for 15 months on purchases and balance transfers. After that, the standard APR is a variable 15.99% – 24.74%, depending on your creditworthiness at the time of the application. Finally, there is a 5% balance transfer fee, and a 3% foreign transaction fee.

Is the Chase Freedom a Good Match for You?

This is a great card for people who like to play the rewards game, but don’t want to pay an annual fee. Yes, it’s kind of a game to sign up for the bonus categories each quarter, and then remember to use your Freedom card to make eligible purchases. Cards that have annual fees may offer more valuable rewards, but this is a card for those who are modest spenders who might not be charging enough purchases to justify paying to use the card. Finally, the 15 months of 0% APR financing, while not among the longest such offers available, can be very valuable to those who are carrying a balance, and those who may need to do so in the near future.

Here’s something to keep in mind before you apply for the Chase Freedom – or any credit card, for that matter: Check with the issuer to be sure you meet their credit guidelines. If you’re not sure of your credit standing, now is a good time to check it. Credit.com offers two credit scores for free and updates them every 30 days so you can watch for any changes.

If you meet the issuer’s general credit requirements, fully understand the card’s terms and find it will meet your needs, this card could be a good fit for you. If your credit standing doesn’t meet the issuer’s requirements, you may want to take steps to work on your credit and apply when your scores are higher.

Wondering what other potential cash back credit cards you should consider for your wallet? You can find our favorites.

Chase Freedom FAQ

Can you create a reminder to activate the bonus categories?

Yes, you can create activation reminders for text or email by going to chase.com/freedom.

If I choose to receive my rewards as cash back, how is the money received?

You can receive the cash back as a statement credit to your account, or as a direct deposit to a linked bank account.

How do I know what the eligible categories are?

Chase lists some of the eligible categories in advance on its Freedom Calendar, and you find out the finalized list when you activate your bonus categories.

How does Chase know what category a purchase is in?

Every merchant that accepts credit cards has to choose a merchant code to represent the type of business they are in. Since this is up to the discretion of individual merchants, it’s possible that some charges may not appear in the category you think they will.

At publishing time, the Chase Freedom card is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.


This article has been updated. It was first published April 27, 2016.

 


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