Review of the Chase Freedom® Visa With 5% Cash Back Bonus

Last Revised: 1/10/2013;

While the Chase Freedom® Card probably can’t start a revolution, it does provide a whopping 5% bonus cashback on rotating spend categories each quarter.  Additionally, the Chase Freedom® card comes with a modest spend target bonus-$100 if you spend $500 within the first 3 months of card activation (a pretty easy bonus to hit).

However, as with many credit card programs, it’s important to read the fine print to really understand the limitations of this offer. Specifically, the Chase Freedom® card has in place specific spend caps which limit the amount of 5% cash-back rewards you can earn each quarter. Read more below if you want to find out the details.

Finally, the Chase Freedom credit card comes in both the Visa and Mastercard flavors, although all the terms and rates are identical.

Key Features of the Chase Freedom® Visa/MC Credit Card
Rewards Program Chase Ultimate Rewards
Base Rewards 1 points per $ of spend
Est. Value of Points $0.01 per point
Bonus Rewards Additional 4 points per $1 of spend on seasonally rotating categories (detailed below). Bonus rewards are earned on up to $1,500 of spend in bonus categories per quarter.
Other Rewards
  • Earn 2 points per $1 of spend when you make airfare purchases using the Chase Travel Booking Tool.
  • If you link your Chase Freedom® Card to your Chase Checking Account, earn an additional 10% bonus on all core 1% cash back rewards (for an effective 1.1% cash back rate).
  • Also, if you have a Chase Checking Account, you will earn 10 rewards points on every purchase.
Spend-Target Bonus You will earn 10,000 points ($100) once you reach $500 in total card spend within the first 3  months of card activation.
Redemption Rewards redeemed as points; 1 point=$0.01 cashback.
Bal Transfer Promo 0% intro APR for 15 months on balance transfers made within 1st 30 days of account opening (after 15 months, reverts to standard variable APR).
Purchase APR Promo 0% intro APR for 15 months on purchases (after 15 months, reverts to standard variable APR)
Annual Fee None
Bal Transfer Fee $5 or 3% of the amount of each transfer, whichever is greater.
Foreign Transactions 3% of each transaction in USD.

A Detailed Look At Earning Points With Chase Freedom®

The Chase Freedom® Credit Card offers a standard 1% cashback bonus on all purchases, and an additional 4% cashback bonus on a pre-defined group of spending categories that change each quarter (making it a 5% cash-back card on those specific categories).  For example, in Q1 2012 (1/1 thru 3/31), the categories eligible for the 5% cashback bonus are gas stations and

GetDebit Insight: The Chase Freedom® card has specific spending limits each quarter that limit the cash back bonus that can be earned on the 5% cash-back categories.  The limit is $1,500 of spend per quarter for the 5% cash-back categories.  For example, if in the 3rd quarter of 2012 you spend $1,500 on combined dining and gas stations, you would earn $75 cash back (5% of $1,500).  However, if you spend $2,000 on these same categories, you would only earn a total of $80-$75 (5% of $1,500) plus another $5 ($500 of spend at the standard 1% cashback).

The table below provides a summary of the eligible 5% cashback bonus categories for 2012 for the Chase Freedom® card, along with the spending caps for each quarter and the maximum cashback that can be earned based on those caps. We also have kept the old 2011 categories in the table as well, as it’ll give you a good idea over time of the types of categories you can expect Chase to promote on an ongoing basis (and we can also watch over time to make sure the spending caps and number of categories don’t decrease).

Chase Freedom® Credit Card Spending Caps by Quarter For 2012
Quarter 2013 Categories and Spending Caps 2012 Categories and Spending Caps 2011 Categories and Spending Caps
Jan-Mar Gas stations, drug stores, and Starbucks® ($1,500 cap) Gas stations and ($1,500 cap) Supermarkets and drug stores ($1,500 cap)
Apr-Jun TBD Grocery stores and movie theaters ($1,500 cap) Home improvement, lawn & garden, home furnishings ($1,500 cap)
Jul-Sep TBD Gas stations and restaurants ($1,500 cap) Gas stations, air travel, hotel stays ($1,500 cap)
Oct-Dec TBD Hotel stays, air travel, Best Buy®, Kohl’s ($1,500) Dining, dept. stores, movie theaters, charities ($1,500 cap)
Total Annual Spending Cap TBD $6,000 $6,000
Value with 5% cashback TBD $300 $300

Under these terms, the Chase Freedom® 5% cashback bonus is, at a maximum, worth around $300 per year.  This assumes you successfully max out the spend limits each quarter.  After you exhaust the 5% bonus, Chase Freedom® reverts to the standard 1% cash-back rate for the remainder of each quarter.

Extra Earnings Opportunities by Linking Your Chase Freedom® Credit Card Account with A Chase Checking Account

If you open a Chase checking account and link it to your Chase Freedom® Account (you can do this through any Chase branch), you enable two additional earnings opportunities:

  • Earn an additional 10% increase in your baseline cash-back earnings (doesn’t apply to the 4% additional bonus on seasonal categories).
  • Earn an additional 10 points on every Chase Freedom® credit card purchase.

So, let’s take an example: let’s say you spend $1,000 in a month, of which $200 qualifies for the additional 4% cash back bonus. Let’s also assume your Chase Freedom® card is linked to a Chase checking account. Finally, let’s assume you used your card to make 40 separate purchases during the month.  As the table below shows, you’d earn $23 with linked Chase checking, and only $18 with the unlinked Chase Freedom® credit card.  Not a huge difference on an absolute dollar basis in this example, but percentage-wise, a nice bump of 28%.

Comparing Chase Freedom® Rewards With And Without a Linked Chase Checking Account
Without Linked Checking With Linked Checking
Non-Bonus Category Spend $800 $800
Spend in Rotating Categories $200 $200
# of Transactions on Card 40 40
Base Rewards Earned (1 point/$) 1,000 1,000
Bonus Category Rewards (4 points/$) 800 800
Addt’l 10% Bonus on Base Rewards N/A 100
Addt’l 10 Points per Transaction N/A 400
Total Points Earned 1,800 2,300

Redeeming Points With Chase Ultimate Rewards

While you can read GetDebit’s detailed assessment of the Chase Ultimate Rewards Program, of which Chase Freedom® is a member of, as far as the Chase Freedom® Card is concerned, redemption for cash back, at a value of $0.01 per point, is your best value.

Expenses and Fees for the Chase Freedom® Credit Card

Fortunately, Chase Freedom® doesn’t have any annual fees.  Foreign transactions incur a 3% transaction charge denominated in US dollars (fairly standard for most credit cards).  So nothing particularly worrisome about the fee structure here.

GetDebit’s Final Assessment of the Chase Freedom® Credit Card

While the $100 spend range bonus is decent (but not awesome), the Chase Freedom® Card excels seasonally and on certain categories.  We recommend acquiring it as a niche card (part of your arsenal) that you only use when you can get the 5% cashback bonus. And when you max out the 5% bonus for the quarter, simply tuck the card away in your dresser drawer and put a reminder on your calendar to dust it off next quarter.  If you have the discipline to do this, then the Chase Freedom® will definitely carry its weight.   For some other ideas on strong rewards cards, check out our post, 3 Best Cashback Credit Cards.

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