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The cash back credit card market continues to heat up with the introduction of the Chase Freedom UnlimitedSM credit card. In the race to acquire new customers, banks are introducing increasingly lucrative products. Cash back credit cards can be an excellent way to put some extra money in your pocket, so long as you don’t give into temptation and spend more than you should.
With Freedom Unlimited, you can earn unlimited 1.5% cash back on every purchase. The card does not charge an annual fee and there is no minimum redemption amount for the cash back: you can redeem at any time and for any amount. You can also earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
We like the simplicity of this product. There are no caps, opt-in requirements or minimum redemption rules. If you want a good return and little hassle, this could be a good addition to your wallet.
There are opportunities to get even more from this new credit card if you can use it in combination with your existing Chase Freedom or Chase Sapphire Preferred credit cards. Just beware, the card does charge a foreign transaction fee of 3% of each transaction in U.S. dollars. In this review, we will explain:
- The key features
- The best ways to use the card
- How the card stacks up versus the competition
- Our Final Verdict
Here are the key features of the Chase Freedom Unlimited card:
- Unlimited 1.5% cash back on every purchase – it’s automatic
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.24-23.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum
- Redeem for cash – any amount, anytime
- Cash Back rewards do not expire as long as your account is open
- No annual fee
Here is an example of how the cash back can add up. If you are able to spend $1,000 a month on your credit card ($12,000 a year), you could earn:
- During the first year: A $150 bonus offer (for spending $500 in the first three months) and $180 of cash back (1.5% of your annual spend). That is $330 of cash back in the first year.
- Thereafter: After the first year, you would continue to earn $180 of cash back every year.
Best Ways to Use The Card
The best part of Chase Freedom Unlimited is its simplicity. Some people are willing to work hard for a deal. They will carry multiple credit cards to maximize the cash back that they earn. They eagerly opt-in to bonus offers and even create spreadsheets to keep track of their rewards. If that sounds exhausting, Chase Freedom Unlimited could be a better option for you. There are no rotating categories, no caps and no requirements on your end. You will earn a solid 1.5% cash back on all of your spending all of the time. And you don’t have to do anything other than carry this card in your wallet and use it for all of your purchases.
But there are some ways to get even more from this credit card with a little extra work. If you already have a Chase Sapphire Preferred credit card, you will have more redemption opportunities with the Freedom Unlimited card. Why? If you have a Sapphire Preferred card, it means that the 1.5% you earn will turn into 1.5 Ultimate Rewards points for every $1 you spend on your credit card. Those points can be combined with the points that you earn on your Sapphire Preferred credit card. Even better, you can use those points in the following additional ways:
- Redeem for travel: Chase offers 20% off travel when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. Imagine you want to buy a $300 airplane ticket. That would require 24,000 Ultimate Reward Points. With a Chase Freedom Unlimited credit card, it would take $16,000 of spend to earn enough points for the ticket. By using your Ultimate Rewards points for travel, you are actually earning 1.9%.
- Transfer to an Airline or Hotel Partner: With Ultimate Rewards, you have great flexibility. You can transfer points to your frequent flier account with airlines (including United Airlines and Southwest Airlines) and hotels (including Marriott and Hyatt). If you do a lot of business travel already, this is a nice way to top up your account.
If you already have and use the Sapphire Preferred card, Freedom Unlimited could be a great addition. With Sapphire Preferred, you earn 2x points for every $1 spent on dining and travel, and you earn 1x point for $1 spent in all other categories. You can boost all other categories to 1.5 points per $1 with Chase Freedom Unlimited.
If you already have the original Chase Freedom credit card, you do not have to give it up. You are allowed to keep both. You can continue to enjoy the bonus categories of Chase Freedom in addition to the unlimited 1.5% cash back on every purchase of Chase Freedom Unlimited.
Freedom Unlimited versus the Competition
The best part of Chase Freedom Unlimited is its simplicity. But here are a few places where the card loses out to competition.
If you want to avoid foreign transaction fees: Chase Freedom Unlimited charges foreign transaction fees. If you plan on traveling abroad, you might want to consider the Capital One Quicksilver card. With Quicksilver, you can also earn 1.5% cash back, but there are no foreign transaction fees.
If you spend a lot in one category: you might find a better deal with a different credit card. For example, Fort Knox Credit Union offers a credit card that pays 5% on gas. PenFed offers a credit card that pays 4.25% on airfare. You can find the cards that pay the highest bonus rates here.
If you want to earn 2%: With Freedom Unlimited you earn unlimited 1.5% cash back. Citi Double Cash currently offers 1% + 1%. You earn 1% when you spend and 1% when you make a payment. If you take the redemption as a deposit into your checking account and pay the balance in full and on time every month, you would be earning 2%. The downside is that Citi Double Cash has a higher minimum redemption requirement of $25 and no sign-on bonus. Chase Freedom Unlimited has a nice $150 bonus. In our earlier example (with the person spending $1,000 a month), you would earn $330 on Chase Freedom Unlimited in Year 1 compared to only $240 on the Citi Double Cash credit card.
Our Final Verdict
Chase Freedom Unlimited is simple, transparent and easy to use. You will earn 1.5% cash back on every purchase – it’s automatic! If you already have a Sapphire Preferred or the original Freedom credit card, adding this no fee card to your wallet is a no brainer.
If you want a solid credit card to earn good returns, this is a good option. Its biggest competition is Citi Double Cash, which can generate 2% cash back when used properly. However, Citi offers no sign-on bonus and has a higher minimum redemption requirement. In the first year, you will likely be better off with Chase Freedom Unlimited. And we have doubts about the ability of Citi to continue to pay 2% cash back. Given the bonus, long-term sustainability of the product and ability to leverage Ultimate Rewards, we believe Chase Freedom Unlimited could be a solid choice.