Archives for April 7, 2016

Chase Freedom Unlimited Review – Flat 1.5% Cash Back + $150 Bonus

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Chase Freedom UnlimitedChase has introduced a new cash back rewards card called the Chase Freedom Unlimited which earns a flat 1.5% cash back on all purchases. The new card will be in addition to and separate from the existing Chase Freedom, which has 5% cash back on rotating categories every quarter and then 1% cash back on all other purchases. Here are the highlights:

  • $150 cash bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Unlimited 1.5% cash back on every purchase – it’s automatic.
  • Redeem for cash – any amount, anytime.
  • Cash Back rewards do not expire as long as your account is open.
  • 0% Intro APR for 15 months from account opening on balance transfers. After the intro period, a variable APR of 16.74% – 25.49%. Balance transfer fee is 5% of the amount transferred with a minimum of $5.
  • No annual fee.

1.5% cash back on all purchases might have been a great percentage number several years ago, but there are now at least a few competitors with higher effective cash back rates.

But wait, you actually get Ultimate Rewards Points! As with the Chase Freedom card, you technically earn Ultimate Rewards points with this card, which in turn can be redeemed for cash back. 100 points = $1 in cash back, or 1 cent per point. Therefore, you could change the bullets above to the following:

  • You earn 1.5 Ultimate Rewards points per dollar spent on all purchases.
  • Earn a 15,000 Ultimate Rewards point bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn a 2,500 Ultimate Rewards point bonus when you add your first authorized user and make your first purchase within this same 3-month period.*

Why does this matter? If you have also have the Chase Sapphire Preferred® Card (or Ink Plus business card), then you can merge your earned points together and transfer all the points in your account into a selection of hotel points and airline miles. If you value those miles/points at more than 1 cent per point, then your 1.5X rewards from this card can be significantly higher. Again, you must have the Chase Sapphire Preferred card as well. Examples:

– You could earn 1.5 United miles per dollar spent.
– You could earn 1.5 Hyatt points per dollar spent.
– You could earn 1.5 British Airways Avios per dollar spent.
– You could earn 1.5 Southwest Rapid Rewards points per dollar spent.

If for example, you placed a perceived value of 1.5 cents on each United mile or Southwest Rapid Rewards point, then you’d receive 2.25 cents of perceived value per dollar spent with this card. Your actual numbers will depend on your own specific redemption choices.

There are no other credit cards with no annual fee that offer such high redemption rates on every purchase, not even from the special co-branded cards from each airline or hotel. Keep in mind though that the Chase Sapphire Preferred itself does have a $95 annual fee. But if you have the Chase Sapphire Preferred card already (like I do), then this card gives me 50% more points on base purchases at no additional cost.

If you would like the opportunity to earn 5% cash back on rotating bonus categories each quarter, compare with the Chase Freedom card. Note that the Chase Freedom only earns 1% cash back on non-bonus categories.

Bottom line. As a straight-up cash back rewards card, the 1.5% cash back of the Chase Freedom Unlimited can be exceeded by other 2% cash back cards. However, if you or your spouse also has the Chase Sapphire Preferred card, then this card improves by allowing you to receive the equivalent of 1.5 Ultimate Rewards points per dollar spent on every purchase. If you value other travel points like United miles, Hyatt points, or Southwest Rapid Rewards points, then by earning Ultimate Rewards you can obtain solid rewards value and flexibility from this card.

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