A new credit card has moved into the flat-rate cash-back rewards sphere and it’s bringing with it a number of features and perks that definitely got our attention.
The Chase Freedom Unlimited® card arrived in spring 2016 with a lot of the features you’ve come to appreciate in the Chase Freedom® card, like a $0 annual fee and a sweet offer of 0 percent intro APR on purchases and balance transfers for 15 months, then 17.24 - 25.99% Variable after that.
But Chase Freedom Unlimited® also carries with it a few notable (and enticing) differences: Namely, no rotating categories, no quarterly enrollments, no cap on what you can earn. Instead, the Chase Freedom Unlimited® card offers users the chance to earn unlimited 1.5 percent cash back on every purchase – it's automatic. No hoops, no hassles, no questions asked.
For those of you who aren't convinced that new and different is always good, don't fret. Chase Freedom Unlimited® isn't replacing Chase Freedom®; you can still earn that 5 percent cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate that the Chase Freedom® credit card offers if rotating categories are something you’re willing to keep up with. In fact, it’s possible the Chase Freedom® and Chase Freedom Unlimited® cards could work well together in your wallet (we'll explain below).
So, if you're looking to embrace a change, here are a couple of other key points about Chase Freedom Unlimited®:
The simplicity of racking up rewards with this card is perhaps its most appealing feature, but it’s far from the only reason the Chase Freedom Unlimited® card could be a welcome addition to your wallet. Flat-rate cash-back credit cards aren’t a new idea, but there are some aspects of the Chase Freedom Unlimited® card that make us sit up and take notice.
To start, the unlimited 1.5 percent cash back on every purchase is a fairly high return. For comparison, the Chase Freedom® card offers unlimited 1 percent cash back on all other purchases outside the bonus categories. Plus, once you spend $1,500 each quarter in the featured 5 percent categories, your cash back rewards revert to that 1 percent level.
With Chase Freedom Unlimited®, you start at 1.5 percent and you’ll never cap out.
And then there are the redemption options.
One hundred points equals $1 and at 1.5 points earned per dollar spent, you'll accumulate 100 points after you spend $67. Many cash-back reward cards restrict when you can cash in your points – as in, you need to accumulate enough points to redeem them in $25 increments or something similar. With Chase Freedom Unlimited®, there are no thresholds to meet in order to redeem your points for cash. Those redeemed points can equal cash deposited directly into an eligible checking or savings account or, since they are Chase Ultimate Rewards® points, they can be used to purchase travel, gift cards, products or services.
There's a lot of value to be found with Chase Freedom Unlimited®, particularly for cardholders who prefer their rewards earning to be a simple, non-rotating process. That said, if you are a big spender in particular categories, such as gas or groceries, you could likely earn more with a card tailored to your particular spending habits. Even a card like the Chase Freedom®, which offers that 5 percent cash back in quarterly rotating categories, could really benefit you.
The other drawback, and this is a big one for the jet-setting crowd, is the 3 percent fee per foreign transaction. If you’re someone who travels internationally, you'd certainly benefit from a card that doesn't charge foreign transaction fees.
Chase Freedom Unlimited® vs. Bank of America® Cash Rewards credit card
Neither card has an annual fee, but the Bank of America® Cash Rewards credit card has a new offer. With the Bank of America® Cash Rewards credit card, you can now maximize your cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings.
Now earn 3% cash back in your choice category and 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases), and unlimited 1% on all other purchases. You can update your choice category for future purchases once each calendar month using the mobile banking app or online banking, or do nothing and it stays the same.
What all this means is that you now have a lot of flexibility when it comes to cash rewards. You're not limited to just gas stations, grocery stores and wholesale clubs. You might be better off deciding which of the Bank of America® Cash Rewards credit card categories you want to target for maximum rewards.
Chase Freedom Unlimited® vs. Blue Cash Preferred® Card from American Express
You will have to pay a $95 annual fee for the Blue Cash Preferred® Card from American Express card, but you also have the opportunity to earn 6 percent cash back on up to $6,000 in U.S. supermarket purchases annually (then 1 percent after reaching the cap), 3 percent at U.S. gas stations and 1 percent on all other purchases (Terms apply. See Rates and Fees). Once again, if you’re a big supermarket spender (but not so big you spend well above the $6,000 cap), you could stand to earn substantially more with the Blue Cash Preferred® Card from American Express.
Chase Freedom Unlimited® vs. Wells Fargo Cash Wise Visa® Card
On the surface, the Chase Freedom Unlimited®card and the Wells Fargo Cash Wise Visa® Card are nearly identical. They both have no annual fee, they both earn unlimited 1.5 percent back on all purchases (or 1.8 percent with Wells Fargo for the first year when making purchases with a qualified mobile wallet), and they both offer 0 percent intro APR on purchases and balance transfers. Though minor, there are still a few notable differences.
Chase Freedom Unlimited® card's 0 percent APR intro period lasts for 15 months, whereas the Wells Fargo Cash Wise Visa® Card card only lasts for 12. Also notable are the sign up bonuses. For example, Wells Fargo Cash Wise Visa® Card cardholders receive a $200 cash rewards bonus once spending $1,000 with the card within three months of opening an account, while Chase Freedom Unlimited® account holders receive a slightly reduced bonus of $150. However, new Chase members only need to spend $500 versus $1,000 within three months to receive this bonus.
Because the two cards offer such similar perks, looking at rewards rates and benefits alone might not be enough to help you decide between them. Instead, if your decision comes down to these two cards, you'll want to look further into each issuer's benefits, and consider all of the extra perks you could receive as a cardholder, such as up to $1,000 of annual cell phone protection (Wells Fargo) or purchase and extended warranty protection (Chase).
This card is designed for people who aren't willing to keep up with rotating cashback categories, but who do spread their spending out among multiple categories and like the flexibility of Chase Ultimate Rewards® points to be redeemed as cash or for various products and services.
It's likely not the best choice for people who use their card for international travel or who relish the opportunity to strategically use their credit cards to rack up maximum rewards in categories that change quarterly.
(See Rates and Fees of the Blue Cash Preferred® Card from American Express)