Chase Freedom vs. Freedom Unlimited: Which Is the Better Credit Card?

Chase Freedom vs. Freedom Unlimited: Which Is the Better Credit Card?
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Chase offers two flagship cards in the Freedom family, the original Chase Freedom credit card and the newer Chase Freedom Unlimited. Both cards offer great opportunities for cash back, plus travel rewards in some cases. Each rewards credit card works a little differently, so today we are going to dive into the details to find out which may make more sense for you.

Chase Freedom Basics

The original Freedom credit card is Chase Freedom. This great credit card comes with up to 5% cash back on popular category purchases and 1% everywhere else.

The card offers the 5% rate on all purchases in categories that rotate every three months at the end of the calendar quarter. Recent categories include gas stations, grocery stores,, department stores, and Android and Apple Pay. You won’t necessarily get a ton of value from the 5% every quarter, but some quarters you may find yourself reaching the $1,500 in combined bonus purchases per quarter. The bonus is worth up to $300 per year.

The card has no annual fee, which makes it a no-brainer for such a valuable card. For those looking for balance transfer deals, Chase Freedom offers 0% APR for 15 months after opening a new account on purchases and balance transfers.

This card currently offers a $150 welcome bonus after spending $500 on purchases in the first three months after opening a new account. That is a huge value on its own for a card with no annual fee.

Chase Freedom Unlimited Basics

Freedom Unlimited gives you a flat rate awards opportunity with no rotating categories to track. This card offers a flat rate 1.5% cash back on all purchases, with no limit. Depending on your purchase habits, that extra 0.5% on all purchases — but a lower rate on the rotating category purchases — could still leave you ahead. It really depends on your spending patterns.

The Freedom Unlimited version features the same welcome bonus, a $150 bonus after spending $500 on purchases in the first three months after opening a new account. The Freedom Unlimited also has the exact same interest rate structure as the standard Chase Freedom does, as well as no annual fee.

Choosing the Right One for Your Needs

There is no clear-cut right or wrong answer on this one. Depending on how you spend, the 5% bonus category is worth a lot. But with a maximum $300 benefit there per year, we can calculate a breakeven point where the Freedom Unlimited card is better than the original Chase Freedom.

For base spending after the first year, you get 0.5% more with Freedom Unlimited. It takes $6,000 of spend on the Freedom Unlimited before you’re better off than the maximum value from the Chase Freedom card 5% bonus categories.

So, if you spend more than $6,000 per year on the card, Freedom Unlimited is the clear winner. If you spend less than $6,000 per year on the card, it depends where and how much you spend. If you spend more with the bonus categories, you’ll come out ahead with Chase Freedom. Because we don’t know future categories, however, you have to essentially guess which one will work out better for you in the long run.

It’s not uncommon for some credit card rewards enthusiasts, like myself, to have both versions. But as with all credit cards, you should only have as many as you can manage responsibly.


Supercharge It With Sapphire

I’ll let you in on a little secret: Your cash back from the Freedom cards can be worth much more than the face value. If you also have a Chase Sapphire Preferred or Chase Sapphire Reserve credit card, you can turn those cash back dollars into Chase Ultimate Rewards points, which are sometimes worth more than cash.

When you have both a Freedom and qualifying Ultimate Rewards card, you can combine your Freedom cash back into an Ultimate Rewards point balance at a rate of 1 cent = 1 point. So, 5% cash back from Chase Freedom is really the same as getting 5x points per dollar.

Why would you want to do this? If you are a frequent traveler, Chase Ultimate Rewards points are worth more than 1 cent each. In fact, miles and points expert The Points Guy values Ultimate Rewards at 2.2 cents each as of April 2018. Depending on how you use them, that means you can easily get twice the value when your Freedom card is paired with a premium Ultimate Rewards card.

Chase Freedom vs Freedom Unlimited

The world of credit card rewards is not always simple, but figuring out the right credit card for your needs can lead to a valuable payoff. Keep in mind that rewards credit cards only make sense when you pay off your card in full every month. If you don’t, interest charges will likely cost you more than you get back in rewards.

But if you have great credit habits and can commit to a perfect payment record, both the Chase Freedom and the Freedom Unlimited card can be a good choice. Depending on how much you spend and where you spend it, either card may be right for you.

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