Is the Chase Freedom Unlimited Your Best Credit Card Option?

Chase recently introduced a new credit card to its line: the Chase Freedom Unlimited. It’s got some unique benefits among standard rewards credit cards, which makes it a good option for many consumers. Here, we’ll dig into the benefits of this card, as well as some potential drawbacks.

The Rewards

The first thing most people want to know about new rewards cards is just what those rewards entail. The Chase Freedom Unlimited doesn’t disappoint.

This card offers a flat 1.5% cash back on every purchase, automatically. There’s no signing up for bonus categories each quarter. And there’s no remembering which categories you should use the card for. And, as you can probably guess from its moniker, this card allows for unlimited cash back that doesn’t expire as long as your account is open.

As with many new cards on the market, Chase is offering this one with a potential bonus. To earn the $150 bonus, just spend $500 on purchases within the first three months of opening your account.

  • ring-mastercardAlternative Option – The Barclaycard CashForward™ World MasterCard® offers cardholders a 1.5% cash back rewards rate on all purchases AND a 5% redemption bonus every time cash back is redeemed.  This means the effective cash back rate is 1.575%, a touch higher than the Chase Freedom Unlimited (and it has a $200 cash rewards bonus!)

You can earn an additional $25 bonus if you add an authorized user and make your first purchase within that first three-month period.

The Introductory APR

It’s getting more common, luckily, to see rewards cards that also have an introductory APR period. The Chase Freedom Unlimited is no exception. As of this writing, the card offers 0% APR for the first 15 months on both purchases and balance transfers.

While that introductory APR on balance transfers may be tempting if you’re trying to get out of debt, this may not be your best card for the job. The balance transfer fee is the larger of $5 or 5% of the amount transferred, which is a bit higher than other 0% cards that offer a 3% balance transfer fee. Plus, if you eat up your whole new credit limit with a balance transfer, you won’t be able to take advantage of the cash back option as easily.

Other Details

As with most cards offered by Chase, this one comes with a bevy of additional benefits that are worth considering. These include:

  • No Annual Fee: This is certainly a strong benefit for a rewards-earning card like this one, but you won’t pay an annual fee ever.
  • Zero Liability Protection: You won’t be held liable for any unauthorized charges made with your card or account.
  • Chip-Enabled Security: Protect against those possible fraudulent charges with this additional layer of security, usable everywhere there is a chip card reader.
  • Purchase and Price Protection: When you use your card to make new purchases, you’re protected against damage and theft on those purchases for up to $500 per claim, for a total of $50,000 per account. You can also be reimbursed the difference if you find a better deal on a purchase you made with your Chase card within 90 days of that purchase. Reimbursement is available for up to $500 per item, and up to $2,500 per year.
  • Auto Rental Collision Damage Waiver: Get built-in insurance when you put your rental car fees on your Chase card, for extra peace of mind.

Redeeming Your Rewards

The Chase Freedom Unlimited card makes it easy to redeem your rewards. You can use any amount of cash back at any time. Use your cash back against your credit card balance, or have it transferred to your bank account.

Alternatively, you can treat your cash-back bonus like points, and use those points in Chase’s Ultimate Rewards program.

One option, though, is to use your card to transfer your bonus points to an airline or hotel partner through the Ultimate Rewards program. The Frugal Travel Guy cites this as a more value-added option than just redeeming that 1.5% for cash back.

To transfer your rewards, though, you may need to use a second Chase product, such as the Chase Sapphire Preferred card. Then, you can transfer points to a variety of airline programs.

For instance, Frugal Travel Guy notes that you can transfer 1.5 Ultimate Rewards points for 1.5 Southwest Points, which are worth around 1.4 cents per point. This means you’ll actually get 2.1% cash back on your Freedom Unlimited rewards. You can similarly boost the value of your rewards by transferring to United, Hyatt, or other high-value travel rewards programs.

Who is It For?

This new card is likely to have mid-range to high credit score requirements, so don’t apply if you’re rebuilding your credit. In that case, check out a secured card or cards that cater specifically to customers with lower credit scores.

If you’re in that range, though, this card still may not be your best option. If you’re not planning to transfer your rewards to a travel program through Ultimate Rewards, you can probably do better than a flat 1.5% cash back. The Citi Double Cash Card, for example, offers double cash back or the Barclaycard CashForward™ World MasterCard® offers 1.575% cash back and a $100 cashback bonus.

However, if you like Chase’s rewards program and plan to use it, this can be a great secondary credit card to use. For instance, the Chase Freedom offers 5% cash back on up to $1,500 in purchases in each quarterly bonus category, but only 1% unlimited cash back after that.

So you could plan to your use your Chase Freedom only for purchases within that bonus category. Then, use your Chase Freedom Unlimited for everything else. Combine all your points through Ultimate Rewards to get high-value rewards from your favorite travel program, or let them accumulate into valuable cash rewards.

And, of course, if you just like Chase or already bank with them, and you’re looking for a credit card you can use without thinking about bonuses and such, the Chase Freedom Unlimited is a great option to consider.

Topics: Credit Cards

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