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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!
|Chase Freedom® (Review)||$0||
|Chase Freedom Unlimited® (Review)||$0||
These cards have a lot in common, including:
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.
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, while the Freedom is less so.
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 from 2019, plus the categories we know for 2020:
|Quarter||2019 Categories||2020 Categories|
|January – March||
|April – June||
|July – September||
|October – December||
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 our spending habits, would we earn more with the Freedom or the Freedom Unlimited?
Here, I estimated what I would’ve earned using the 2018 bonus categories. Note that these are not current categories, though you may very well see some of them again.
|Category||What I’d spend in that quarter|
|Internet, cable, and phone services||$150|
|Chase Pay, Android Pay, Apple Pay, and Samsung Pay||$0|
|Q1 total bonus spend||$300|
|Q2 total bonus spend||$1,500|
|Q3 total bonus spend||$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|
Compare that to what we would’ve earned with the Chase Freedom Unlimited:
|Annual spend||Annual cash back|
(1.5% cash back)
As you can see, we would’ve earned the same amount with the Freedom Unlimited, despite the Freedom’s alluring 5% bonus categories.
Your situation could be different. 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. But, naturally, that won’t happen with everyone.
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|
And the Chase Freedom Unlimited would still earn you $360.
In that situation, the Chase Freedom would come out 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 the net value of any rewards you earn.
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 if you transfer your Ultimate Rewards points to one of Chase’s premium travel cards: the Chase Sapphire Preferred® Card (Review), Chase Sapphire Reserve® (Review), or 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 $360 of cash back we discussed earlier? That amounts to 36,000 Ultimate Rewards points. Add in the $150 (15,000-point) signup bonus, and you’d now have 51,000 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 51,000 points could get you between $637 and $765 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 12 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 51,000 points mentioned above: You could transfer them to United Airlines and redeem them for a round-trip international flight!
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.
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 (aside from the 5% back you’ll get on Lyft rides).
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 usually 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.
Don’t feel like either of the Freedom cards is right for you?
Here are a few similar cards to consider:
Like the Freedom, the Discover it card has rotating bonus categories in which you can earn 5% cash back (on up to $1,500 in spending each quarter, with activation required). 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.
The Citi Double Cash offers 2% cash back on everything (1% back on purchases, and 1% back on payments). If you’re not interested in redeeming your cash back for travel through Chase Ultimate Rewards, this card will give you a high percentage of cash back (without the need to fuss over categories).
As we’ve mentioned before, one of the best all-around cards is the Chase Sapphire Preferred. Its signup bonus offers 60,000 points after you spend $4,000 in the first three months. You’ll earn 5X Ultimate Rewards points per dollar on Lyft rides, 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.
The Chase Freedom Unlimited earns 5% cash back on Lyft rides and 1.5% back on every other purchase. The Chase Freedom earns 5% back on rotating categories, up to $1,500 in spending quarterly. Both cards have their advantages, and while you might get more value from one or the other, they can also be used together.
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