Chase Freedom Review: Rewards with No Annual Fee

Chase Freedom Visa - $100 Bonus Cash Back + 0% Intro APR Earn $100 Bonus Cash Back after you make $500 in purchases in your first 3 months 0% Intro APR for 12 months on balance transfers and 6 months on purchases 5% Cash Back on up to $1,500 spent at gas stations and on Amazon.com from 1/1/12 - 3/31/12. You'll enjoy new 5% categories every 3 months like grocery stores, restaurants and even airlines. It's free and easy to activate your bonus each quarter! Unlimited 1% Cash Back on all other purchases Up to an additional 10% Cash Back when you shop online at select merchants through Chase No annual fee and rewards never expire Intro APR for Purchases Intro APR for Balance Transfer APR as low as Annual Fee 0% 0% 11.99% - 22.99% (Variable) $0

Named “Best Overall Card” by CBS MoneyWatch for 2011, the Chase Freedom credit card is a straightforward rewards credit card. It does lack some of the bells and whistles that come with premium credit cards but it is also annual fee free, making it a low cost alternative to some of the other rewards cards.

It’s important to note that you may be able to get a lower rate with another credit card. So, if you’re someone who tends to carry a credit card balance, you may want to take the approved interest rate into consideration before opening the card.

Benefits

One the biggest benefits of the Chase Freedom card is its rewards program, which provides cardholders the ability to accrue points that can be redeemed for a variety of rewards including cash back, gift cards, merchandise and travel. Here is a breakdown of the program:

Rewards

Cardholders have the opportunity to earn an unlimited number of points. Points accrue at 1 point for every $1 that is purchased with the credit card.

Calendar

Each quarter, cardholders have the ability to get bonus rewards when purchasing items in a featured bonus merchant category like grocery stores, restaurants, department stores and home improvement stores. When cardholders use their Chase Freedom at these categories, they earn 5% on those purchases.

Enrollment is necessary each quarter to take advantage of the 5% bonus. Cardholders do have the ability to enroll in e-mail or text message reminders to help ensure they remember to enroll for the bonus.

Categories

What is nice about Chase’s rewards program is that the cardholder has the flexibility to choose what type of rewards they would like each time they redeem their points. Instead of having to always earn cash back or travel rewards, cardholders get to choose from the following each time: cash back, merchandise (ranging from categories like electronics to office products), gift cards, travel (including airfare, hotel, tours, cruises and airport parking) and experience rewards. Experience rewards include access to sporting events, concerts and chef prepared dinners.

Cash Back

There are three options that cardholders can make when they choose to redeem their points for cash back; they are: donate to charity, pay yourself back or get cash.
With the donation option, cardholders must choose from a short list of charities provided by Chase. The donation is then sent by check to the selected charity.

With “pay yourself back”, cardholders choose a specific purchase they would like paid off with their rewards points. The minimum amount that can be redeemed is $20, which equals 2000 points. And it can take up to 2-3 business days to process and post the credit to the account, this means that cardholders should plan ahead if they are trying to avoid interest charges for their purchase. Also, it is important to note that these credits do not count toward minimum payments.

The third option is the traditional option that most people think of with cash back cards. The cash is redeemed to the cardholder by electronic deposit into a Chase bank account or via a paper check if they prefer to deposit it into an account at another institution. The cash back option is available in increments of $10, with 1000 points equaling $10. If the cardholder is hoping to get their check as quick as possible, there is an option to pay $10 for rush shipping.

Shopping

Cardholders can earn up to an additional 10% when they shop online at the Ultimate Rewards Mall through their Chase rewards account. Cardholders simply sign into their online banking and click on the links to popular merchant websites to get the easy point bonus.

Mall

With the Ultimate Rewards Mall, cardholders have access to popular merchants in a variety of categories including: apparel, accessories, babies and kids, health, music and movies, computers and electronics, entertainment, flower, food, office and school, sports and recreation, and even travel. The bonus point offers are clearly labeled so cardholders know how many points they will be earning with every dollar they spend.

As with any online shopping, this option can be dangerous for those who seriously enjoy shopping. It’s easy to go a little crazy with the spending when you aren’t physically handing a credit card to a cashier. The opportunity to earn extra points won’t pay off if it results in paying interest on merchandise that you didn’t really need!

Redeem

Chase has made the redemption of the rewards simple for cardholders. Through the rewards website, cardholders are able to see their available points as well as their rewards history so they can see how they have used their points in the past. They then are able to choose from the various categories and even book their travel.

If utilizing points for travel, there are some instances where you will have to call the Chase travel agents to complete the transaction. Calling the travel agent phone line is required for booking inclusive hotels and if you need assistance booking airfare and other items for children. All travel changes and cancellations also need to be made via the phone.

One nice feature of rewards redemption is that cardholders do not have to pay any out-of-the pocket fees. They will not have to pay for sales tax and, if they choose standard shipping, there are no shipping charges. Rush shipping is available, which will cost a fee.

Also, if a cardholder is utilizing rewards for an upcoming trip or for a gift and does not have enough rewards to cover the entire balance, they are able to pay for the remainder of the balance with their credit card. Of course, you will want to shop around before making this choice as you may be able to get the item for less elsewhere. If that is the case, utilizing points for a gift card to the merchant selling the product would be the best bet.

Balance Transfer

Cardholders also have the opportunity to complete balance transfers with the Chase Freedom card. And there is a 0% introductory APR (annual percentage rate) for the first 12 months of the account being open. This is a good deal – while many credit cards these days come with a 0% introductory APR for purchases most do not have this type of deal for balance transfers.

However, once the initial 12 month period is finished, the balance transfer rate will be adjusted to 11.99% to 22.99% based on your creditworthiness. You will want to keep this in mind if you are transferring balances from a low rate credit card and do not anticipate paying off those balances in the first 12 months.

There is also another cost to balance transfers. As with most credit cards, there is a balance transfer fee that will be in effect whether or not you are in the 12 month introductory period. The fee is either $5 or 3% of the amount of each transfer, whichever is greater.

Even with the fee, there is still the opportunity to save quite a bit of money. You just need to be disciplined and do your due diligence to make sure that the balance transfer makes sense for your situation.

Write to Meghan Clark at meghan@creditdonkey.com

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Disclaimer: This content is not provided or commissioned by Chase. Opinions expressed here are author's alone, not those of Chase, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through Chase Affiliate Program.

Disclaimer: This content was first published on August 3, 2011. This content may have been updated on October 22, 2011. Information including APR, terms and benefits may vary, be out of date, or not applicable to you. Information is provided without warranty. Please check Chase website for updated information.