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August 12, 2017

Review: Chase Freedom vs Freedom Unlimited

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Does Chase Freedom or Freedom Unlimited make more sense? Read this in-depth comparison of these cashback cards to learn which is better. The answer may surprise you.

The Chase Freedom and Chase Freedom Unlimited are two of the most popular cash back cards.

Both have no annual fee, a generous sign-up bonus, and tempting cash reward structures. The difference is that one card gives you 5% cash back in rotating bonus categories, while the other is a flat 1.5% cash back on everything.

Which one is better for you? We'll do a full run-down comparing the two cards so you can make your own choice.

Overview

Before we get into the meat of the comparisons, let's do a quick rundown of how the cards work:

 

Chase Freedom

Chase Freedom Unlimited

 

Interest Rates and Fees

Introductory APR for Purchases0% introductory APR for 15 months0% introductory APR for 15 months
Introductory APR for Balance Transfers0% introductory APR for 15 months0% introductory APR for 15 months
Purchase APR15.99% to 24.74% Variable based on your creditworthiness and other factors15.99% to 24.74% Variable based on your creditworthiness and other factors
Balance Transfers APR15.99% to 24.74% Variable based on your creditworthiness and other factors15.99% to 24.74% Variable based on your creditworthiness and other factors
Annual Fee$0 annual fee$0 annual fee
 

Benefits and Features

Cash Back DealIntroductory Bonus Cash Back: Earn a $150 bonus after spending $500 on purchases in your first 3 months from account opening.Introductory Bonus Cash Back: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
Cash BackCash Back Rewards: Unlimited 1% cash back on all other purchases.Cash Back Rewards: Unlimited 1.5% cash back on every purchase - it's automatic!
Bonus Cash BackBonus Cash Back: 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. Unlimited 1% cash back on all other purchases.
Bonus Categories for 2017:
Q1 (January 1 – March 31, 2017): Gas stations and local commuter transportation (not including parking, tolls, and Amtrak® purchases)
Q2 (April 1 - June 30, 2017): Grocery stores (not including Walmart® and Target® purchases)
Q3 (July 1 – September 30, 2017): Restaurants and movie theaters
Q4 (October 1 – December 31, 2017): TBA
 

Chase Freedom: Pricing information including interest rates, benefits and fees was obtained on July 17, 2017 from published websites and is believed to be accurate, but not guaranteed.

Disclaimer: The information for the Chase Freedom has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

  • Chase Freedom gives you 5% cash back in quarterly rotating categories on up to $1,500 in combined purchases every quarter. All other purchases earn 1% cash back.

  • Chase Freedom Unlimited gives you 1.5% cash back on all purchases, with no cap on how much you can earn.

In this review, we will take a more in-depth look at the similarities and differences, as well as why you may like one over the other.

Why Either Card Is Good Choice

  • $150 bonus: Both cards offer a $150 bonus after you spend just $500 on purchases in your first 3 months from account opening. This is a generous bonus for cards with no annual fee.

  • $25 bonus for adding an authorized user: Both cards give you the opportunity to earn an extra $25 when you add your first authorized user and they make a purchase within the same first 3-month period.

  • 0% introductory APR for 15 months: Both cards offer 0% introductory APR for purchases and balance transfers for the first 15 months. After that, there is a variable APR of 15.99% - 24.74%. Note: the balance transfer fee is 5% of the amount transferred, $5 minimum.

    The promotional APR is a great way to get a break on high interest rates if you are planning to make some larger purchases or have debt to pay off. Just be sure to pay off any balances before the intro period ends.

  • No annual fee.

Tip: Both cards are in the Ultimate Rewards family. You get the cash back as UR points, which can then be used as statement credit, direct deposit, or gift cards. And another huge plus: if you have one of the premium UR cards (Chase Sapphire Preferred, Sapphire Reserve, or Ink Business Preferred), you can also combine your points, which will allow you to use the points for more value on the Chase travel portal, or be transferred 1:1 to airline and hotel partners.

Why you may prefer Chase Freedom

This is a popular card for good reason. Here is why you may like the Chase Freedom:

  • 5% cash back bonus categories. This is the main draw of Chase Freedom. 5% bonus categories are a huge deal. It's hard to find cards that offer more than this, especially with no annual fee.

    This is how it works: Every quarter (every 3 months), there are bonus categories that will earn 5% cash back, while all other purchases earn 1%. You can get 5% cash back on up to $1,500 in combined purchases in the bonus categories, which equals up to $75 bonus cash back every quarter. After that, you go back to the 1% cash back rate.

    Calendar: The bonus categories are usually popular spending categories. For example, for 2017, we have:

    • Q1 (January 1 - March 31, 2017): Gas stations and local commuter transportation
    • Q2 (April 1 - June 30, 2017): Grocery stores and drugstores
    • Q3 (July 1 - September 30, 2017): Restaurants and movie theaters
    • Q4 (October 1 - December 31, 2017): Holiday TBA

  • You don't mind changing up your spending to match the bonus categories. You can get a lot more rewards with the 5% bonus categories, but you would need to manage your spending. For example, maybe you'll eat out more often from July to September, and cook more at home the rest of the year.

  • You're organized. You must remember to activate the bonus categories each quarter. Or else you won't get the 5% bonus. You can do so online, by phone, or at a Chase bank.

For a lot of people, the 5% bonus potential is just too tempting. But for others, it's too much work. If this sounds like you, read on.

Why you may prefer Chase Freedom Unlimited

Chase Freedom Unlimited
Apply for Chase Freedom Unlimited
If your spending is very varied, you may find that you'll get more rewards with Chase Freedom Unlimited. Here are some reasons why it may be better for you:

  • Flat 1.5% cash back on every purchase. This is a higher than average 1% cash back amount. And the amount you can earn is unlimited.

  • Your spending is varied and consistent. Every month, you tend to spread your spending between shopping, eating out, gas, groceries, movies, etc.

  • The cash back is automatic. You don't have to activate anything. And you don't want to keep track of dates and rotating categories.

Both Do Have Downsides

Beware of these potential downsides for both cards.

  • Foreign transaction fee: Unfortunately, both cards charge a 3% foreign transaction fee. So if you're planning on traveling abroad, make sure you also have a card without this fee.

  • Balance transfer fee: There is an intro 0% APR for balance transfers for 15 months, BUT there is a transfer fee of 5% (or minimum $5). This can add up to quite a bit. Transferring a balance of $3,000 will mean a transfer fee of $150.

    If you want to pay off debt and have a large balance to transfer, consider Chase Slate instead. It has no transfer fee promotion for transfers made during the first 60 days as well as an intro 0% APR for 15 months (after that, a variable APR, currently 15.99% to 24.74%).

Which Chase Freedom is Better

So how much would you need to spend in bonus categories per quarter to come out ahead with the Chase Freedom? We did some math:

Let's assume an average spend of $1,000 a month on your credit card.

  • For Chase Freedom: Let's say you manage to spend $375 in the bonus categories every quarter ($125/month), and $2,625 on everything else. This is a total of $3,000 spent each quarter, or $1,000/month.

    You would earn: ($375 x 5%) + ($2,625 x 1%) = $45 cash back per quarter

    $45 cash back each quarter means $180 a year.

  • For Chase Freedom Unlimited: You just spend an average of $1,000 a month.

    You would earn: ($1,000 x 1.5%) x 12 months = $180 a year.

In this scenario, you'd get the same cash back amount with both cards. This means that to come out ahead with the Chase Freedom, over 12.5% of your spending needs to be in bonus categories every quarter.

If you usually spend $1,000 a month, over $125 of that needs to be in the bonus categories. Do you think you can do that?

Bottom Line

It is hard to beat the 5% cash back that Chase Freedom offers, but only if you can spend enough in the rotating categories. Otherwise, the flat 1.5% cash back offered by Chase Freedom Unlimited is more versatile.

Chase Freedom Unlimited
Apply for Chase Freedom Unlimited
At Chase's Secure Site
Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
0% for 15 months
0% for 15 months
15.99% - 24.74% Variable
$0

Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: The information for the Chase Freedom, Chase Sapphire Reserve, and Chase Slate has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

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