While points and miles are nice, everyone needs a good all-purpose cash-back card in their wallet. Cash-back cards generally ensure you are rewarded for every purchase and with something you can always use: cold hard cash.
Chase Freedom® and Chase Freedom Unlimited® are both strong choices for a cash-back credit card. They have no annual fee, an introductory 0% APR period and flexible redemption options. If you'd rather use your cash-back rewards for purchases or travel, the Chase Freedom® and Chase Freedom Unlimited® cards let you do that, too.
At first glance, the cards look almost identical, but there is a key difference in how each card awards cash back. Keep reading for more about that difference as well as all the details you need to know about the cards' terms and benefits.
What is the difference between Chase Freedom® and Chase Freedom Unlimited®?
The most notable difference between Chase Freedom® and Chase Freedom Unlimited® is the percentage of cash back you receive. Everything else about the cards' perks and terms are identical, as of this writing.
Both cards give you unlimited rewards, but the benefits are structured differently. With Chase Freedom Unlimited®, cardholders get 1.5% cash back on every purchase in every category. There is no limit to how much cash back you can earn, and rewards never expire so long as your account remains open.
The Chase Freedom® card works a little differently. It provides 5% cash back in quarterly bonus categories. For instance, in the last quarter of 2019, the bonus categories offered 5% cash back on purchases at department stores as well as those made with PayPal or Chase Pay®. Gas stations, grocery stores and select streaming services were among the bonus categories from earlier in the year. Cardholders have to activate the categories each quarter and only $1,500 in combined quarterly purchases from bonus categories are eligible for the 5% cash back. All other purchases receive unlimited 1% cash back.
New cardholder cash-back bonus
This welcome bonus awards $150 to new cardholders who spend $500 on purchases within the first three months of opening an account. A great little cash-back boost to get the rewards-earning ball rolling.
Cash-back redemption options
Cash back can be used to shop on either Amazon or the Apple Ultimate Rewards Shop. What's more, you can use it through the Chase Ultimate Rewards® travel portal where it can be used to book flights, hotel rooms and rental cars with partnering companies. There's also the option to redeem your cash back for gift cards.
Of course, you can elect to receive cash rewards as well. Cardholders can have the money applied as a statement credit or directly deposited into a linked bank account.
With both Chase Freedom® and Chase Freedom Unlimited®, cash back never expires so long as an account is open. Plus, there is no minimum amount required to redeem cash back and redemptions can be made in any amount.
Interest rates and fees
Rewards are only one factor to consider when selecting a cash-back card. You also want to weigh whether the fees are competitive.
Chase Freedom® and Chase Freedom Unlimited® come with no annual fee and an introductory 0% APR offer. For the first 15 months after you open an account, you won't pay any interest on your purchases or balance transfers. After that, the cards have a variable interest rate that is tied to the prime rate. Currently, it ranges from 16.49% - 25.24% Variable, and the exact rate depends on your credit. There is a 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5, but this is pretty normal compared to other cards with similar balance transfer offers.
One drawback to these cards is that they both charge foreign transaction fees. You'll pay 3% of the total cost of your purchase in U.S. dollars if you buy something in a foreign currency with either card. That means these might not be the best cards for overseas travel. The great news though is that neither carries an annual fee, so they're excellent cards to hold alongside others in your wallet. Especially a card like Chase Sapphire Preferred® Card, which has no foreign transaction fees, and a 25% boost on rewards value when points are redeemed for travel through Chase Ultimate Rewards®. See our guide to Chase Ultimate Rewards® to learn more.
Should I get Chase Freedom® or Chase Freedom Unlimited®?
As you'll see, the major difference is how rewards are calculated. That means your choice of card may boil down to whether you want to activate and keep track of bonus categories or prefer the simplicity of a flat cash-back rate for all purchases. Or, you could always consider holding both. Why not when neither charges an annual fee? That way you could earn 5% in rotating categories up to the quarterly maximum, and then 1.5% on everything else, instead of just 1%. It's something to think about, and also something we discuss in further detail in our guide to Chase Ultimate Rewards®.