Chase Freedom vs Freedom Unlimited: This One’s Probably a Better Choice

Susan Shain

Susan Shain | Blog

Aug 31, 2018

While the Chase Freedom (Review)  and the Chase Freedom Unlimited (Review) are similar credit cards with (confusingly) similar names, they do have one big difference: the way they earn rewards.

And you’ll need to understand that fully before deciding which card to get.

Keep reading for a breakdown of the Chase Freedom vs Freedom Unlimited. You’ll learn which is the better fit for you — and why you might not even have to pick between them!

A Quick Glance at the Chase Freedom vs Freedom Unlimited

These cards have a lot in common, including:

  • Signup bonus: You’ll earn $150 after spending $500 in the first three months.
  • Online shopping portal: When you “Shop Through Chase,” you could earn extra cash back at select retailers.
  • Annual fee: $0 (woohoo!)
  • Intro APR: 0% on purchases and balance transfers for the first 15 months. Afterwards, it’ll jump to a 16.74%–25.49% variable APR.
  • Free credit score: Chase will provide you with an updated credit score each week through its program Credit Journey (enrollment required).
  • Foreign transaction fees: Both cards have a foreign transaction fee of 3%, which means we don’t recommend them for use abroad. (If you like to travel outside the country, here are some cards without foreign transaction fees.)

Do those APRs look high to you? Due to their perks, most cash back cards have higher APRs than basic cards. But here’s the thing: You don’t need to worry about APRs if you pay off your credit card bill each month. When you pay your statement balance in full every month, you don’t pay any interest on your purchases.

How Rewards Work With the Chase Freedom vs Freedom Unlimited

Although both cards earn cash back (in the form of Ultimate Rewards points), the big difference lies in how much you earn with each purchase. The Freedom Unlimited is super straightforward: It earns a flat rate of 1.5% cash back on all purchases, all year round.

The Freedom, on the other hand, has “bonus categories” that rotate every quarter. If you spend money in that quarter’s bonus categories, you’ll earn 5% cash back on your first $1,500 of purchases. For everything else, you’ll earn 1%.

You’ll need to activate these categories each quarter before you’ll earn cash back at the 5% rate.

Here are the quarterly bonus categories for 2018:

Q1 (January–March)
  • Gas stations
  • Internet, cable, and phone services
  • Chase Pay, Android Pay, Apple Pay, and Samsung Pay
Q2 (April–June)
  • Grocery stores
  • PayPal
  • Chase Pay
Q3 (July–September)
  • Gas stations
  • Lyft
  • Walgreens
Q4 (October–December)
  • Not yet announced (in 2017, the category included Walmart and department stores)

In other words, for every dollar you spent on Lyft between July and September, you’d get 5% cash back. If you spent money on Uber, however, you’d only get 1%.

Chase Freedom vs Freedom Unlimited: Which Earns More Rewards?

While at first glance 5% sounds unbeatable, the Freedom’s value depends on your spending habits — and it’s worth doing the calculations to see if it’d be a winner for you.

Let’s take me, for example. My boyfriend and I try to put as many expenditures as possible on our credit cards, for a total of about $2,000 per month, or $24,000 per year. So, given the bonus categories above, would we earn more with the Freedom or the Freedom Unlimited?

First, I had to estimate what we would’ve spent in this year’s bonus categories.

Category What I’d spend in that quarter
Gas stations $150
Internet, cable, and phone services $150
Chase Pay, Android Pay, Apple Pay, and Samsung Pay $0
Q1 total bonus spend $300
Grocery stores $1,500
PayPal $0
Chase Pay $0
Q2 total bonus spend $1,500
Gas stations $150
Lyft $50
Walgreens $0
Q3 total bonus spend $200
Walmart $600
Department stores $200
Q4 total bonus spend $800

That’s a total of $3,000 in the bonus categories. So, with the Chase Freedom, here’s what we would’ve earned:

Annual spend Annual cash back
Bonus category (5% cash back) $3,000 $150
Everything else (1% cash back) $21,000 $210
Total $360

Compare that to what we would’ve earned with the Chase Freedom Unlimited:

Annual spend Annual cash back

All purchases

(1.5% cash back)

$24,000 $420
Total $420

As you can see, we would’ve earned more with the Chase Freedom Unlimited, despite the Freedom’s alluring 5% bonus categories.

Your situation could be different, though. If you spend a lot of money in one of the categories — gas stations, for example — then the Freedom might be a better fit for you.

Let’s say you spent as much as I did, but maxed out each of the quarterly categories, for a total of $6,000 per year.

The Chase Freedom could earn you:

Annual spend Annual cash back
Bonus category (5% cash back) $6,000 $300
Everything else (1% cash back) $18,000 $180
Total $480

And the Chase Freedom Unlimited would still earn you $420.

In that situation, the Chase Freedom would come out slightly on top — but that’s only if you maxed out the bonus categories each and every quarter.

Here’s a handy strategy to help you maximize rewards. Say the end of the quarter is coming up, and you’ve only spent $500 of the possible $1,500 that’s eligible for 5% back. You could spend the rest on store gift cards that you can use whenever you want. If gas station purchases earn 5%, buy a bunch of gas gift cards, and then use them all year long. But only buy gift cards if you plan to use them (and pay your statement balance in full) — not just to hit the spending limit.

When we refer to “spending $24,000 per year” on a credit card, we’re not talking about carrying a balance. We’re talking about charging purchases to your credit card, and then paying the bill in full each month. Carrying a balance — and paying interest — on your card will reduce any rewards you earn.

How Chase Freedom and Freedom Unlimited Earn Ultimate Rewards Points

Instead of earning straight cash back, like many other credit cards, the Chase Freedom and Freedom Unlimited earn points.

Every $1 of “cash back” equals 100 points with Chase’s Ultimate Rewards program.

The easiest way to redeem these points is to use them as statement credits. You’ll essentially turn the points back into cash, getting $0.01 for every point you redeem. So Chase would provide $1 in cash back in the form of 100 Ultimate Rewards points, and then you’d redeem those 100 points for $1 off your statement. You could also convert your points into gift cards or Amazon credit at the same rate.

You’ll find more value, however, if you transfer those points to one of Chase’s premium travel cards: the Chase Sapphire Preferred Card (Review), Chase Sapphire Reserve Card (Review), or Chase Ink Business Preferred Credit Card (Review). After transferring your points to one of those cards you’ll have access to better redemption options.

Remember that $420 of cash back we discussed earlier? That amounts to 42,000 Ultimate Rewards points. Add in the $150 (15,000-point) signup bonus, and you’d now have 57,000 points.

With the Sapphire Preferred or Ink Business Plus, those points would be worth 1.25 cents when booking travel through the Ultimate Rewards travel portal. Or, with the Sapphire Reserve, you’d be getting 1.5 cents per point.

That means 57,000 points could get you between $712 and $855 worth of travel. While this approach requires more effort, it also yields more value than statement credits.

Lastly, if you have one of these premium cards you can also transfer your Ultimate Rewards points to any of Chase’s 13 airline and hotel partners. They include brands like Southwest, United, Marriott, and Hyatt, among others.

If you’re willing to put in the work and you have one of the premium cards, this is one of the most powerful redemption strategies. Take the 57,000 points mentioned above: You could transfer them to United Airlines and redeem them for a round-trip international flight!

Chase Freedom vs Freedom Unlimited: Which to Choose

So now you’re convinced the Chase Freedom and Chase Freedom Unlimited are rewarding cash back cards…but you still don’t know which one to get.

Why Choose the Chase Freedom

  • You’ll get 5% cash back in select categories: If you can max out its bonus categories, the Freedom is a smart choice. (Just remember you’ll have to sign up for each bonus category ahead of time.)
  • It’s exciting: If you get a thrill from earning points, the Freedom’s rotating categories can be kind of fun.

Why Choose the Chase Freedom Unlimited

  • You won’t have to keep track of bonus categories: You already have lots of stuff to worry about, and might not want to add one more thing to your plate.
  • You won’t be tempted to spend more: You’re only human. If you get the Chase Freedom, you could risk spending extra money to maximize your 5% bonus each quarter, which totally defeats the point.

Looking for a bottom line?

Unless you’re going to be diligent about maxing out bonus categories — without spending extra money — we think the Chase Freedom Unlimited is a better fit.

You won’t need to worry about categories, and will easily earn a flat 1.5% cash back on everything you buy.

But, You Don’t Have to Choose Just One

That said, you could get both cards.

You could use the Freedom for purchases in applicable bonus categories, and the Freedom Unlimited everywhere else. And, if you have one of the premium Chase cards we mentioned above, you could use that for the categories in which it earns the most (travel and dining for both the Preferred and Reserve, for example).

And, no matter which card you use to earn Ultimate Rewards points, you’ll get the most value by redeeming them with one of Chase’s premium cards.

With this three-card strategy, you’ll earn between 1.5 and 5 Ultimate Rewards points for every dollar you spend. Depending on how you redeem them, that’s quite a bit more than the 1.5% and 5% cash back you’d normally earn.

While that sounds amazing, it’s vital to remember no rewards are worth going into debt over. Although playing the credit card game can be fun, you should only participate if you can pay off your bills in full each month. If you don’t trust yourself to be responsible, that’s fine! Just stick to debit cards instead.

Talk to any credit card insider, and they’ll probably gripe about Chase’s “5/24 rule.” Though not officially listed anywhere, it’s widely known that Chase will deny your application if you’ve opened more than five credit card accounts in the past 24 months. To see where you stand, check your credit reports.

Other Rewards Cards to Consider

Don’t feel like either of the Freedom cards is right for you?

Here are a few similar cards to consider:

For rotating bonus categories with 5% cash back

Like the Freedom, the Discover it card has rotating bonus categories in which you can earn 5% cash back. Discover will double your cash back earned in the first year, so you’ll earn a minimum of 2% cash back on all purchases, or 10% cash back in rewards categories during that time. But, while it touts its lack of foreign transaction fees, Discover isn’t widely accepted abroad.

For a straightforward 2% cash back card

The Citi Double Cash offers 2% cash back on everything. If you’re not interested in redeeming your cash back for travel through Chase Ultimate Rewards, this card will give you a higher percentage of cash back (without the need to fuss over categories).

For a big signup bonus

As we’ve mentioned before, one of the best all-around cards is the Chase Sapphire Preferred. Its signup bonus offers 50,000 points after you spend $4,000 in the first 3 months. You’ll earn 2X Ultimate Rewards points per dollar on travel and dining, and 1X point per dollar on everything else.

Still want more? Here’s our breakdown of the best credit cards on the market.

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