Chase Freedom Credit Card Review: Is It Right for You?
The Chase Freedom is a cash rewards card that utilizes a flat 1% cash back rate as well as quarterly 5% bonuses on certain purchases.
Among cash back cards, the Chase Freedom shares with the Discover it Cash Back the distinction of being the only two popular cash back cards that use a rotating 5% rewards calendar. When used the right way, you can earn excellent rewards via these categories.
However, it takes a certain level of credit card savvy to take advantage of how the Chase Freedom’s rewards work.
In this review, we’re going to help you understand the mechanics of this card by outlining how its rewards work, what its rates and fees are and how it compares to other cash rewards cards. At the end of the review, we’ll give you our observations about the card’s pros and cons. We’ll also let you know who we think is a good fit for this card.
Pros: 5x rotating rewards category can produce $75 in rewards per quarter.
Cons: Yearly rewards are significantly lower than the best cash back cards, APR is higher than all other major non-Chase cards.
Estimated Yearly Cash Rewards: $425
|Sign-Up Bonus||Annual Fee||Regular APR|
|$150||$0||17.24% to 25.99%|
|Rewards Rate: 5x rewards on rotating categories, 1x rewards on everything else|
As you use your Freedom card to make purchases online and brick-and-mortar stores each day, Chase calculates which rewards rate the purchase gets and how much cash back you get.
Then, they deposit the cash back in the form of points. These points have a cash value of $10 per 1,000 points. So, a rewards balance of 15,000 points is worth $150. You can choose to withdraw your points whenever you’d like. Options for redemption include adding the cash back as a credit to your credit card statement. You can send that balance to a Chase banking account, too.
You can view your rewards balance by logging into your Chase account.
Even though Chase automatically calculates your rewards with every purchase you make, it’s important to understand how the 5% categories work. Chase has a rewards calendar they provide that shows you what the current quarter’s 5% rewards are and what the past quarters in the calendar year have been. Here’s a screenshot of a recent rewards calendar:
As you can see, the rewards categories tend to address common purchases. In this particular example, you get 5% back on groceries and home improvement purchases. Groceries is a key category, as families tend to spend more on groceries than all the other typical categories you’ll see.
The Bureau of Labor Statistics estimates that the average household spends around $4,363 a year on groceries, which is about $1,090 per quarter, or around $55 in cash back rewards.
If you spend more than the average amount on groceries, then the rewards amount goes up. However, Chase caps rewards spending at $1,500 per quarter. Once you surpass that in the 5% categories, the rewards rate drops to 1%.
Because these categories change from quarter to quarter and because families tend to spend different, we believe the average range of yearly rewards you earn between the 5% bonuses and the 1% on everything else will average out to about $425 per year.
As we’ll show you in the comparison section of this review, this yearly cash back total is below average.
Another reward you’ll get with the Freedom is a $150 sign-up bonus. If you can spend $500 in the first three months of owning your card, Chase will send an extra $150 to your rewards balance. The bonus could up to eight weeks to show up on your rewards balance.
Pro tip: You’ll need to manually activate the 5% rewards. Chase makes it easy to remember by sending you notices via email.
Regardless of how well the Chase Freedom’s rewards perform against other cash back cards, $425 is a great perk just for using a credit card.
However, you can neutralize your free cash by racking up balances and paying interest on them. This is why it’s important for you to understand how much this card can cost you. Because of that, we’ll list the Freedom’s rates and fees and then talk about how they could impact you:
- Interest rate for purchases and balance transfers: 17.24% -25.99%
- Interest rate for cash advances: 27.24%
- Penalty interest rate: None
- Balance transfer fee: $5 or 3%, whichever is greater
- Cash advance fee: $10 or 5%, whichever is greater
- Foreign transaction fee: 3%
- Late/returned payment fee: Up to $38
- Annual fee: $0
Based on the research we’ve read from sites like CreditCards.com, we’ve learned what the average credit card user looks like. This assessment is key to your understanding of how the Chase Freedom can help you and hurt you when it comes to interest rates and fees.
We know that the average credit score in America hovers around 700 and that, according to CreditCards.com, the average balance for someone with that score is around $8,000 dollars.
What this means is that, over time, what you spend exceeds what you earn. You don’t have the extra cash to pay your credit card bill, so balances carry over each month. Those balances build and build and, as they do, Chase charges you interest.
The following table shows you how much interest you’ll pay for five average daily balances. We’ve included three APR’s: The Freedom’s lowest and highest rate plus a middle rate that you may get based on your scores:
|Balance Amount||17.24% APR||20.24% APR||25.99% APR|
The key takeaway here is that your yearly rewards, on average, will be around $425. No matter which APR you get—higher credit scores get lower APR’s—the interest you’ll pay on as little as a $2,000 balance for one year will exceed your rewards.
The one way to make the card’s interest rates work for you instead of against you would be to take advantage of 0% APR the card offers.
Chase will allow you to make purchases for the first 15 months you own the card without interest charges. This 0% rate even applies to balances you don’t pay in full every month. Also, any balances you transfer from another card will have 0% interest for the first 15 months you own the card. However, Chase will charge you 3% of the balance amount in order to make the transfer.
We’ve alluded to how the Chase Freedom compares to other cards earlier in this review. In this section, we’ll present you with an in-depth chart comparing the important features of cash rewards cards. Afterward, we’ll provide our analysis:
|Chase Freedom||Bank of America Cash Rewards||AmEx Blue Cash Preferred||Discover It Cash Back||Citi Double Cash||Capital One Quicksilver||Chase Freedom Unlimited|
|Intro cash offer||$150 after $500 spend||$200 after $1,000 spend||$200 after $1,000 spend||Match on first-year cash back (avg. of $425)||None||$150 after $500 spend||Match on first-year cash back up to $20,000 (avg. of $300)|
|Rewards rate||1% with 5% quarterly bonuses||3%/ 2%/ 1%||6%/ 3%/ 1%||1% with 5% quarterly bonuses||2%||1.5%||1.5%|
|Yearly rewards on $30K spending||$425||$422||$605||$425||$600||$450||$450|
|Intro APR||0% for 15 months on purchases and balance transfers||0% for 12 months on purchases and balance transfers||0% for 12 months on purchases and balance transfers||0% for 14 months on purchases and balance transfers||0% for 18 months on balance transfers||0% for 15 months on purchases and balance transfers||0% for 15 months on purchases and balance transfers|
|Permanent APR||17.24%–25.99%||16.24%–26.24% (Penalty APR up to 29.99%)||15.24%–26.24% (Penalty APR up to 29.99%)||14.24%–25.24%||14.49%–24.49% (Penalty APR up to 29.99%)||16.24%–26.24%||17.24%–25.99%|
The first two categories here tend to be the most popular because they offer free cash. And, in that vein, we believe that the Chase Freedom is below average. The sign-up bonus is lower than every card except the Citi Double Cash and its yearly rewards are tied with the Discover it Cash Back and just $3 away from the Bank of America Cash Rewards.
The Freedom’s best APR is higher than every card on the list, too, which makes us believe that those with excellent credit scores (720 and up) may want to choose the Discover card. The card’s lowest APR is a full 3% lower than the Chase Freedom. Over the course of one year, a 3% difference in APR could save you $240 in interest on an $8,000 balance.
The one strength the Chase Freedom offers in this comparison is its 0% APR offer. At 15 months, it’s longer than the Bank of America, Discover and Blue Cash Preferred Card from American Express cards and equal to the Chase Freedom Unlimited and Capital One Quicksilver.
In our opinion, we believe that the Chase Freedom has a limited number of strengths. The greatest one is the card’s 15-month, 0% APR offer. If you have balances on other cards that rack up interest, leveraging this offer can save you hundreds of dollars in interest payments.
Aside from that, we see the other cards we listed above providing better all-around benefits. The Freedom’s best APR is higher than its competitors and its sign-up bonus is the lowest along with the Quicksilver. Also, it’s near the bottom in yearly rewards.
In our opinion, there are other cards that offer a more well-rounded arsenal of rewards and reasonable interest rates.
One of the cards that comes to mind is the Discover it Cash Back. The card’s first-year bonus is around $425 dollars and its yearly rewards are $425. Also, it’s got the lowest APR of the group and you won’t pay a late fee the first time you pay late.
However, choosing the right card has a lot to do with your financial habits and which types of purchases you make more often or less often than the average. Our rankings of the best cash back cards of 2019 will help you see which of the cards we listed above is the right fit for you.
1 out 3 people found this review helpful
Bad credit card
Stay away from this credit card. I disputed a charge on my credit card, and they reversed the charges without giving me the opportunity to explain. I think they reversed the charges because they get a commission from the vendor. I will cancel this credit card and get a better card. I do not recommend this one to anybody.
Bottom Line: No, I would not recommend this to a friend