Chase Freedom vs. Chase Freedom Unlimited

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Freedom is a beautiful thing, and it’s even more beautiful when it comes with cashback opportunities, no annual fees, and a nice signup bonus attached to it. That’s what you get when you sign up for the Chase Freedom credit card from Chase Bank.

But wait a minute. Is that the Chase Freedom card you’re talking about or the Chase Freedom Unlimited card? Now that we’ve sufficiently confused you, let’s try to sort things out. Chase offers two flavors of Freedom, and while the benefits may seem similar, there are distinct differences between the cards. Let’s check out these two stellar credit cards to find out which one is the right Freedom fit for you.

As you can see, the benefits are very similar between the two Freedom cards. Both have no annual fees (nice!), and both provide you with a good signup bonus of $150 worth of bonus points when you spend $500 within the first three months of owning the card.

In fact, the only real difference you’ll find between the two credit cards is the rewards points earn structure. You see, while the Chase Freedom card offers you higher yields on rotating categories quarterly, the Chase Freedom Unlimited card gives you an unlimited (hence the name) flat rate rewards program. And that’s a big difference for most cardholders.

Is Your World Flat or Round?

If you aren’t familiar with the two types of rewards programs, I’ll give you a break down so you can decide which Chase Freedom credit card is best for you.

  • Flat rate

A flat rate rewards program offers you the same amount of rewards points for every qualifying purchase you make. That means whether you are eating at an international restaurant, buying a pair of shoes at Walmart, or filling up your tank, the rewards percentage you earn is the same across the board.

If you don't like running around after categories, figuring out which category is ranking highest at this particular time, or juggling multiple credit cards to get the most out of their points program, then this is the rewards structure for you. It lets you just swipe your card wherever, whenever, for whatever you want, and you know that you are automatically earning rewards. One card and one rate for all purchases. It's simple, it's easy, it's uncomplicated. Like the way that sounds? Then, you'll want to opt for the Chase Freedom Unlimited credit card.

  • Categories

On the other side of the range, the Chase Freedom card is a categories earn structure. That means you'll get more rewards points for certain categories than others. In this case, the Chase Freedom card offers 5% cash back on rotating categories for the first $1,500 spent within those categories. The categories are changed every quarter, and after the initial $1,500, you'll earn a 1% flat rate even in those categories. All other purchases simply earn a flat rate of 1% back per dollar spent.

There’s a little more thinking and planning involved with a categories rewards structure. You have to keep on top of the rotating categories. That involves checking in with Chase each quarter (or really checking your email because Chase is awesome about sending you reminders to opt in each quarter) to see which categories are being highlighted for the upcoming time period. It also means paying a bit more attention when you go to pay. You can’t just pull out any card and make your purchase. You have to consider where you are shopping, whether or not that store falls into the rotating categories for that quarter, and pay accordingly.

It may sound like it's a lot of work, but if you play your cards right, this could be a lucrative option for you. Basically, you'll make a lot more in rewards money (five times more in fact!) going the categories route if you spend most frequently in the categories that are highlighted for that quarter. It’s hard to argue with five times more rewards! Since the beginning of 2018, so far the categories have been gas station purchases, mobile payments, grocery shopping, Walgreens purchases, and Lyft purchases. Here’s a concrete example:

Let's say you have a two-hour commute every day to work, which means you fill up your tank frequently. For simplicity's sake, we'll say you're spending $1,500 a quarter on gas. Here’s how your points earnings would work with each of the Freedom cards:

  • If you fill up using the Chase Freedom Unlimited card, you’ll earn 1.5% for every dollar you spend. That’s 1.5% x 1500 = 22.5.
  • If you fill up using the Chase Freedom card, you’ll earn 5% on that same $1,500. So, that’s 5% x 1500 = 75.

As you can see, you’re earning significantly more points when you use the Chase Freedom card over the Unlimited card. The one caveat is that gas stations need to be one of the rotating categories for that quarter in order for you to receive those bigger dividends. In theory, the rotating categories are always frequent purchases, so you can maximize your points earnings no matter which category is chosen each quarter, but there’s no guarantee. When the categories are right, though, you’ll churn out almost four times more points power with the Freedom card.

Decisions, Decisions

So, which one is the better rewards program? At the end of the day, it’s really a personal preference. Some people love the idea of racking up major rewards points in their favorite categories, while others prefer to just set and forget. Since both cards are the virtually the same except for the rewards program, go with the style that fits your personality more. If you like to be more relaxed and earn a slow and steady point flow, then opt for the Chase Freedom Unlimited Card. If you don’t mind keeping tabs on categories, then go for the gold and get 5% on your major purchases.

By the way, you can redeem points for cash or through the Chase Ultimate Rewards program which gives you up to 50% more value per point than cash redemption. Caveat: this only works if you have one of the premium Chase credit cards (i.e., Sapphire, Sapphire Preferred, or Ink Business Preferred). Plus, you can combine points with your premium Chase card, so you get a tremendous value for your points. Basically, don’t settle for a cash payout because your points are worth more than double when you use the Ultimate Rewards.

Twice the Freedom? Twice the Fun!?

There's one last option you might consider. Since there are no annual fees to worry about, why not sign up for both Freedom cards and get the best of both worlds? This way, you can earn the 5% on rotating categories from the Freedom card, and then use the Unlimited card for everything else. It's the best way to maximize your earnings and simplify your spending. Talk about freedom!

*Chase only approves people who have fewer than 5 credit card signups in the last 24 months though, so make sure you fit that criteria before signing up for both cards.

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