New Chase Freedom Unlimited Card - Yay or Nay?

Disclaimer: If you are new to credit card rewards, please read Part 1Part 2, & Part 3 of The Fear of Leveraging Credit Cards.

My wife and I watch "Unbreakable Kimmy Schmidt", a Netflix original, so it was funny when I came across this Chase Freedom Unlimited commercial on the interwebs!

Details

Chase currently has a new annual-fee free 1.5% cash back card out, called the Freedom Unlimited. Now if you're familiar with Chase's current product line, you probably either hold the regular Chase Freedom card or have considered applying for it. The main difference between the regular Freedom and the new Freedom Unlimited is as follows:

  • Chase Freedom
    • Earns 1% on all purchases
    • Earns 5% on quarterly rotating categories, which can include - gas stations, grocery stores, department stores, movie theaters, etc.
    • Cap for each 5% quarter is $1,500 in spend or earning 7,500 Ultimate Reward (UR) points
  • Chase Freedom Unlimited
    • Earns 1.5% on all purchases
    • No rotating 5% quarterly categories
    • No cap on how much cash back you earn at 1.5%

 

Analysis

First and foremost, because I am one for minimizing to maximizing rewards/travel, we need to look at this in a couple of ways. Straight off the bat, 1.5% cash back isn't so great. As I wrote about in my beginner card post, getting either the Citi Dividend or Amex Fidelity Rewards card already beats the Freedom Unlimited outright with 2% cash back. 

Secondly, the best way to maximize your value per UR point is to ALWAYS pair it with either a Chase Sapphire Preferred card or a Chase Business Ink card (either Cash or Plus). Why? To reiterate, the greatest way to maximize your points redemption is to have options! When you transfer the points you earn with either the Freedom/Freedom Unlimited to the Sapphire Preferred/Ink cards, those cards give you the ability to transfer to hotel (Hyatt, IHG, Marriott, Ritz-Carlton) and airline partners (United, Singapore, Korean, British Airways, Virgin Atlantic, Southwest). This could mean a difference of 1.5 cents for straight cash back versus up to 2.85 cents (or more!) of redemption through these hotel and airline partners!

Lastly, we need to look at how we would potentially use either the Freedom or Freedom Unlimited in our spending. If we are able to max out every single one of the Freedom's 5x rotating quarterly categories, then we could potentially amass 30,000 UR points (4 x 7,500). To earn this amount of UR points through the use of the Freedom Unlimited, you would need to spend $2 million dollars!

 

Personal

My wife and I, at one point, each had the Sapphire Preferred. However, when the annual fee hit, we both downgraded to the regular Sapphire, which still gave 2x the points on dining but no longer on travel. We both also have the regular Freedom cards. So in the interest of options, I converted my Sapphire card to the new Freedom Unlimited card, while keeping the wife's Sapphire card and our individual Freedom cards intact. This allows us to still take advantage of the 5x rotating categories each quarter, dine out for 2x the points, and have the option of earning 1.5 UR points for all non-bonused spend with the new Freedom Unlimited card!

 

Conclusion

YAY - Get the card

  • If you already have a Chase Sapphire Preferred/Ink cards, the Freedom Unlimited would make a good pairing for your everyday non-bonused spend.
  • If you don't spend in any of the 5x quarterly categories of the regular Freedom card.
  • If you have an extra Freedom or Sapphire card that you can convert while still retaining the individual benefits of those cards. 

NAY - Don't get the card

  • If you don't already have the Chase Sapphire Preferred or one of the Business Ink cards, apply for those first, as Chase is clamping down with their 5/24 rule.
  • If you spend in any of the 5x quarterly categories of the regular Freedom card, get the regular Freedom card instead. Remember, 5x adds up way quicker than 1.5x.

There you have it, folks. Hope this helps you make a decision on whether or not this card will be beneficial to your travel hacking future!

Do you have the regular Freedom card? Are you planning on getting the new Freedom Unlimited card? Or will you be converting another card to the Freedom Unlimited?