The Chase Freedom is one of the best no-annual-fee cards around because of its quarterly 5X bonus categories. The bonus category for quarter two (April through June) of 2016 is grocery shopping and you can now activate your account for the bonus. Keep in mind that even if you activate before April you won’t earn the 5X bonus for purchases made before April.
Note that for this bonus category Wal-Mart and Target are excluded but wholesale clubs such as BJ’s and Sam’s Club are included. The fine print also indicates that gas, fuel, wholesale club specialty service purchases such as travel, insurance, cell phone and home improvement are all excluded.
The Chase Freedom Can Be More Than A Cash-Back Card
Though at first blush the Freedom seems like a simple cash-back card it is a bit of a chameleon. If you have another Ultimate Rewards card like the Chase Sapphire Preferred or Ink Plus you can actually transfer the points from the Freedom account to the other account, turning them into full-fledged Ultimate Rewards points. This essentially turns the Freedom into a valuable travel rewards card.
Once your Freedom points have been converted to full-fledged Ultimate Rewards points you can transfer them to a variety of frequent flyer and hotel loyalty programs. When you do so, you can sometimes earn two, three or even four cents of value per point. That means purchases in a quarterly bonus category that earn 5X points can actually end up getting you a 10, 15 or even 20% effective rebate.
If you already have the Chase Freedom, click here to activate the bonus category.
If you don’t have the Freedom, check out this list of 7 reasons you may want to get it and a reason to skip applying.
The Seven Reasons to Get the Chase Freedom Card
1. The $150 signup bonus for the Freedom card is the best it’s been recently.
Oftentimes there is no signup bonus or a reduced signup bonus for the Chase Freedom card, so if you’re interested in the card in general, it makes sense to apply now while this strong bonus is offered.
2. The spending requirement for the signup bonus is low.
For many cards the spending requirement for a signup bonus is $2,000 or more. This card only requires $500 in spending to get the signup bonus. That means meeting the spend requirement will likely not involve any spending you wouldn’t have otherwise performed. As an example, you could buy a $500 gift card at a grocery store between April 1st and June 30th, meeting the spending requirement, triggering the $150 cash back bonus, and you would receive another $25 back because your purchase was in the 5% quarterly bonus category.
A return of $175 on $500 of purchases is a whopping 35% net return!
3. The Chase Freedom card is often regarded as a simple cash back card but it can provide much greater value and flexibility than apparent at first.
I hit on this early in the post…here are some more details.
The Freedom’s rewards are advertised as straight cash back. However, if you have another card of the Ultimate Rewards type (e.g. Chase Sapphire Preferred, Chase Ink Plus) you can actually transfer the points earned with the Freedom card to the other Ultimate Rewards account.
That is key because with those other accounts you can use Ultimate Rewards points in valuable ways, such as transferring them to travel partners such as Southwest, United, Hyatt, British Airways, Amtrak, Singapore Airlines and more, or redeeming for travel directly at 1.25 cents per point. Patty and I do this all the time. The point transfer options are great for couples planning a honeymoon or major trip!
With a valuation of 2 cents per point for the fully-flexible Ultimate Rewards points, you’re getting an astounding 10% back on your combined $1,500 in purchases in the bonus categories. In cases where you’re getting more than 2 cents of value per Ultimate Reward point you’re getting an even greater net return than 10%.
If you want to keep it simple, you can just stick with the Freedom card and get cash back. If in the future you get a Sapphire Preferred or Ink Plus card, then you also have the option to transfer your Ultimate Rewards points to your other account to reap the greater value described here.
4. The Chase Freedom card has no annual fee.
This is a card you can get and keep without worrying about renewal/annual fee date.
5. The card has great rotating quarterly 5X bonus categories.
Every quarter there are bonus categories for which the return is 5 cents per dollar spent. For purchases in these categories you’re getting 5% back in cash or an even greater return if you supplement this card with another Ultimate Rewards card from Chase (see above).
Getting 5% cash back on essential items like gas and groceries is hard to beat.
This quarterly rotating bonus category approach is similar to Discover’s approach but the Chase Freedom is a Visa card so it’s more widely-accepted than Discover.
6. You can get another $25 bonus easily.
When you add a friend or family member as an authorized user to your account and he/she makes a purchase within three months of card approval, you get another $25 cash back.
7. Approval for the Chase Freedom card usually requires only a moderate credit score.
Some other high-value cards will only be approved for applicants with very good credit but approval for the Freedom card is often granted to applicants with moderate or limited credit history.
I recommended the Freedom to a family member with no significant credit history. She was approved for the card and used it to build credit history which then enabled her to get other valuable cards.
You May Want to Skip Applying for the Chase Freedom Card if…
If you’ve opened 5 or more credit cards in the past 24 months, Chase may not approve your application for the Freedom card. Though I have yet to see any acknowledgement by Chase of this policy there are a ton of reports of Chase declining applications for the Chase Sapphire Preferred, Freedom and Ink Plus if the applicant has opened 5 or more credit cards in the past 24 months. If that description fits you, you may want to instead consider other Chase cards or cards from other banks like CitiBank or Barclays.
Patty and I each have had a Chase Freedom card for years and have been very pleased with the returns it offers. We’ve been using it this quarter for gas purchases and it will be our go-to card for our grocery shopping in the second quarter. As long as the card carries no annual fee, we’ll happily keep it.
As always, feel free to use The Honeymoon Guy’s Credit Card Tracking Spreadsheet to keep track of your credit card applications.
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