Chase Announces Major Shakeup for Popular Credit Cards

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Chase is making changes to the Freedom and Freedom Unlimited credit card offerings.
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If you are a Chase Freedom or Chase Freedom Unlimited cardholder, you may soon notice some major changes coming your way.

On August 31, Chase announced that it’s making some adjustments to the existing Freedom cash back cards as well as introducing a new option.

Here are three big changes that you need to know about in the Freedom card line and some additional details on each:

  1. Chase Freedom Unlimited cardholders will see a change in cash back structure.
  2. Signups for the Chase Freedom card soon will be discontinued.
  3. Freedom Flex will be introduced as a new credit card to replace the Freedom card.

1. Chase Freedom Unlimited Cardholders Will See a Change in Cash Back Structure

If you have the Chase Freedom Unlimited, you’ll see a new cash back benefits structure effective September 13, 2020.

The existing cash back structure for this card is an unlimited 1.5% on all purchases.

Good news! That 1.5% cash back will remain, but it will be supplemented by additional cash back opportunities in the following categories:

  • 5% on travel purchased through Chase Ultimate Rewards
  • 3% on dining (including takeout and delivery services)
  • 3% on drug store purchases

Considering there is nothing that existing cardholders need to qualify for these increased cash back opportunities, this is a win all the way around.

New applicants should be able to receive these new cash back bonus categories by signing up as early as September 15, 2020. They also can qualify for a $200 welcome bonus offer if they spend at least $500 within the first three months of membership.


2. Signups for the Chase Freedom Card Soon Will Be Discontinued

This was not explicitly stated in Chase’s recent announcement, but Team Clark reached out to confirm this information.

New signups for the Chase Freedom card will be discontinued in the days leading up to the announced Sept. 15 changes.

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Chase told Team Clark that existing cardholders will have the option either to keep their current credit card or move over to the new Freedom Flex credit card (more on that later). The rotating 5% cash back categories the Freedom card is known for will continue on schedule with the new credit card if members choose to switch.

The Freedom card recently offered 5% cash back on grocery store purchases in the first year of membership (up to $12,000 spent), so some members may have an incentive to hold on to that card as long as Chase will let them.

Note: The Chase Freedom and Chase Freedom Unlimited are two different cards. The Freedom Unlimited will continue to take new applications.


3. Freedom Flex Will Be Introduced as a New Credit Card to Replace the Freedom

As one credit card is put out to pasture, a new one is born.

Chase announced that the new Freedom Flex will replace the Freedom card in its cash back credit card lineup. You will be able to apply for this card beginning Sept. 15.

Team Clark took a closer look at this new card and came up with 8 things you’ll want to know about the Freedom Flex, but here is a quick overview of some of the perks to this card:

  • The Freedom’s 5% rotating bonus categories will continue with the Flex.
  • The new cash back categories touted above for the Freedom Unlimited also will apply to the Flex card (5% on Chase Ultimate Rewards travel purchases, 3% on dining, 3% at drug stores).
  • No annual fee
  • $200 welcome bonus offer on spending $500 or more within the first three months for new members
  • A cell phone protection plan from Mastercard is included if you pay your bill with this card.

Final Thoughts

This shakeup for Chase’s line of Freedom cash back cards appears to be a net positive for consumers.

The increased cash back opportunities in the dining and drug store categories make sense amid pandemic-induced economic conditions. And they help the Freedom Unlimited card compete with cards that carry a higher everyday rate of cash back returns.

While the Chase Freedom has been a popular cash back credit card in recent years, the Freedom Flex appears positioned to carry forward most of its strong points while also trying to add value with non-rotating spending bonuses in categories like dining and drug store purchases.

Money expert Clark Howard would recommend staying the course with an unlimited 2% cash back card to make sure you’re getting a solid return on your purchases regardless of category, but the Freedom Unlimited and Freedom Flex do provide enough bonus category incentive to warrant consideration.

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If you are looking for a card to do all your spending on dining (3%) and then to max out rotating 5% bonus opportunities, both of the new Freedom offerings could be justified in your wallet alongside an everyday spender like the Citi Double Cash or the Paypal Cashback Mastercard.

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