Chase Freedom®’s bonus categories are revealed each quarter so there’s always new opportunities to earn extra rewards. If you don’t plan out your monthly spending in advance and are looking to maximize rewards without paying an annual fee, this card can be a great asset for your wallet.
Cardholders who use the Chase Freedom credit card earn 5% cash back on up to $1,500 in spending across its revolving roster of bonus categories offered each quarter (then 1%). Plus with newly added benefits, cardholders can take advantage of 5% cash back on Lyft purchases through March 2022, making this a competitive card for rideshares.
Below, CNBC Select breaks down the Chase Freedom credit card’s rewards, benefits and fees to help you decide if it’s the right card for you.
5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 1% cash back on all other purchases
$200 cash back after you spend $500 on purchases in your first 3 months from account opening
0% for the first 15 months on purchases and balance transfers
16.49% to 25.24% variable on purchases and balance transfers
Balance transfer fee
3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a $5 minimum. After, 5% ($5 minimum).
Foreign transaction fee
- No annual fee
- Long intro 0% APR period for purchases and balance transfers
- Rewards can be transferred to a Chase Ultimate Rewards card
- Generous welcome bonus
- Opportunity to earn up to 5% cash back in select categories upon activation
- Bonus categories must be activated each quarter
- Cash-back program limits 5% cash-back earnings to $1,500 a quarter
- 3% fee charged on foreign transactions
- Estimated rewards earned after 1 year: $538
- Estimated rewards earned after 5 years: $1,892
Rewards totals incorporate the cash back earned from the welcome bonus
Discover it® Cash Back, the Chase Freedom® offers 5% cash back in rotating categories on up to $1,500 in combined purchases after you activate the bonus every quarter. After you reach the limit, it’s 1% on all purchases. If you maximize your spending in these categories, you could earn $75 cash back each quarter on top of the 1% cash back you earn in all the other categories. There is no minimum to redeem cash back.
For January to March 2020, cardholders earn up to 5% cash back from purchases made at gas stations, select streaming services and internet, cable and phone services.
Eligible streaming services include: Disney+, Netflix, Hulu, Sling, Vudu, FuboTV, Apple Music, SiriusXM, Pandora, Spotify, YouTube and ESPN+. You can view here Chase’s full list of participating merchants.
The remaining categories will be announced throughout the year. Other quarterly bonus categories could include wholesale clubs like Costco, which didn’t make it last year but may appear for 2020. Department stores, such as Bloomingdale’s, Nordstrom and Macy’s, may also come back on this year’s Chase Freedom 5% cash-back calendar.
The card also has a generous welcome bonus of $200 cash back after you spend $500 on purchases in your first three months from opening an account. That’s like earning 40% back.
CNBC Select calculated how many rewards the average American can earn if they optimize the way they use their Chase Freedom card. We worked with the location intelligence firm Esri, who provided us with a sample annual spending budget of $21,852.
The budget includes six main categories: groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961).
Here’s a breakdown of how much cash back you can roughly earn in each category, annually:
- Groceries: $100.38
- Gas: $71.82
- Dining out: $33.65
- Travel: $21.54
- Utilities: $49.59
- General purchases: $61.17
- Total: $338.15
Cardholders can earn an estimated $538 in cash back the first year (including the cash back from the welcome bonus) and a total of $1,892 over five years.
The rewards don’t expire as long as your account is open, and they can also be transferred to a Chase Ultimate Rewards® card, such as the Chase Sapphire Preferred®, which allows you to redeem rewards for travel through the Ultimate Rewards portal and receive 25% more value.
The Chase Freedom has similar perks to the Chase Freedom Unlimited®. (Check out CNBC Select’s Chase Freedom Unlimited review.)
Both cards offer a 0% APR for the first 15 months on purchases and balance transfers (then 16.49% to 25.24% variable APR) and a three-month complimentary DashPass membership through DoorDash. Cardholders can also benefit from purchase protection and extended warranty protection.
The Chase Freedom has no annual fee, but there is a 3% fee charged on foreign transactions. (Check out CNBC Select’s best credit cards with no foreign transaction fees.)
There is a 3% balance transfer fee when you transfer a balance during the first 60 days your account is open, with a $5 minimum. After the first 60 days, it goes up to 5% ($5 minimum).
It’s smart to use a cash-back card on a daily basis, but if you really want to maximize your rewards you should take the time to review all the different cash-back cards available to see which best matches your lifestyle and if a 5% cash-back credit card is right for you.
While a 5% cash-back card, like the Chase Freedom, can be beneficial on its own, you can earn even more rewards by pairing it with a flat-rate cash-back card.
For example, for everyday purchases you could use the Citi® Double Cash Card, one of CNBC Select’s top choices for best cash-back cards, which earns an effective 2% cash back: 1% when you buy and 1% when you pay for purchases. Then, you could use a 5% cash-back card, like the Chase Freedom, for bonus category purchases.
To determine which credit cards offer the best value, CNBC Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.
CNBC Select teamed up with location intelligence firm Esri. The company’s data development team provided the most up-to-date and comprehensive consumer spending data based on the 2018 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri’s data team created a sample annual budget of approximately $21,852 in retail spending. This budget is comprised of the most common spending categories, including groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
CNBC Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.
While the five-year estimates we’ve included are derived from a budget similar to the average American’s spending, you may earn a higher or lower return depending on your shopping habits.
For balance transfer calculations, we used a Bankrate calculator to tally the interest rates and fees you could incur if you transferred $6,194, the average balance Americans carry on their credit cards in 2019, according to Experian.
If the average consumer with a $6,194 balance on their credit card pays $200 each month, they will spend $2,012 in additional interest, assuming the average 16.97% APR, according to the Fed. And it will take them 42 months — more than three years — to pay off that debt.
Information about the Chase Freedom® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.