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Chase Freedom Credit Card Review
Because there is an increasing awareness and/or preference among consumers that cash back credit cards are the ideal rewards program, almost every macro issuer has a flagship cash back rewards card. In today's market there are essentially two different programs. The first is one that either gives a 1-2% rebate on all purchases made with the card. The second is one that provides 5% cash back on categorical purchases that rotate, usually on a quarterly basis. There is usually a cap on earnings per quarter at the 5% rate. Additionally, all other purchases made are given a 1% rebate. The Chase Freedom Card is a cash back rewards card that functions as a rotating category 5% cash back card with 1% on all other purchases. It also comes with a $100 initial sign-up bonus. To qualify for this, $500 must be spent on the card within 3 months of account opening.
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- This offer is for people with a good to excellent credit history which means, among other things, that your credit history is clear of bankruptcy and seriously delinquent accounts
- Earn $100 Bonus Cash Back after you make $500 in purchases in your first 3 months
- 0% Intro APR for 15 months on purchases and balance transfers
- 5% Cash Back on up to $1,500 spent at grocery stores and movie theaters from 4/1/12 - 6/30/12
- You'll enjoy new 5% categories every 3 months like gas stations, restaurants and even airlines. It's free and easy to activate your bonus each quarter!
- Unlimited 1% Cash Back on all other purchases
- Up to an additional 10% Cash Back when you shop online at select merchants through Chase. No annual fee and rewards never expire
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Intro APR
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Intro APR Period
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APR
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Annual Fee
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Balance Transfer
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Minimum Credit Required
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0.00%*
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15 months on purchases*
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12.99-22.99% (Variable)*
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$0.00*
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Yes*
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Excellent, Good
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Chase Freedom Cash Back Program
Like others of its kind, Chase Freedom provides 5% cash back on $1500 worth of purchases per quarter. All additional purchases, including those within the designated 5% category exceeding $1500, earn 1% cash back. The quarterly calendar for 2012 is as follows:
January-March:
5% rebates could have been earned on purchases at Amazon.com and at gas stations.
Current Quarter:
5% rebates can be earned at grocery stores and movie theaters.
July-September:
Earn 5% cash back on purchases at gas stations and restaurants.
October-December:
Airline, hotel, Best Buy, and Kohl's purchases all earn 5% cash rebates.
To understand this fully, let's use the current quarter as an example. Let's say that a total of $3000 was spent on a Chase Freedom Card. Of that $3000, $2000 of it was spent on groceries and at movie theaters. The remaining $1000 was spent on other purchases. Now, because there is a $1500 rewards cap for the 5% cash back earnings, the total cash back for the $2000 spent at grocery stores and at movie theaters is $80 -- which is 5% of $1500 ($75) 1% of $500 ($5). Then the additional $1000 that was spent elsewhere earns $10 cash back, which is 1% of $1000. The total rewards earnings for this quarter using the outlined scenario is $90.
In order to really make out with the Freedom Card you have to really make an effort to use it for purchases made on those purchases that fall into the category that's currently receiving the 5% rebates. If you do so, the earnings are much more profitable. The nice thing about the rotating categories is that for the most part they encompass staple purchases: gas, restaurants, groceries, airlines. This increases the likelihood that maximization of rewards can be attained if spending is executed efficiently.
Chase Freedom Interest Rates
The interest rates for Chase Freedom cards are consumer-friendly. The current card offers a 0% APR on both balance transfers and purchases for 15 months which is in line with other cash back credit cards. This 0% term has been extended as a few months ago the 0% rate lasted less that 15 months. In my opinion this also gives the card a slight edge over the Discover More Card, another rotating category cash back offer, because the length of the 0% terms are identical but Freedom comes with that $100 bonus where the Discover Card does not. The regular rate after the 0% term ranges from 12.99% to 22.99% variable depending on the strength and review of an applicant's credit history.
Of note for people who plan on using Chase Freedom Cards for balance transfers. There is a 3% balance transfer fee. This means that for every $1000 transferred to the new card, even though there is a 0% introductory APR, they will be charged $30. Cards without balance transfer fees are extremely uncommon; especially when it comes to rewards credit cards with long 0% intro rates that don't have annual fees. Applicants who are looking for fee-free balance transfers in today's market need to turn to plain vanilla credit cards. Chase's version is Slate from Chase which has a 0% transfer rate for 15 months without a fee.
Ultimately Chase Freedom is a Good Cash Back Card
The 0% introductory rate that lasts over a year, the initial $100 sign-up bonus which is very attainable, and the cash back rewards structure make Freedom an attractive offer. Like any other rewards card, carrying a balance on the card at 12.99% impedes earning potential, but there are other cash back offers on the market with higher elite pricing. In closing, I would recommend this card to anyone who is looking for a cash back rewards program and has good to excellent credit. For those who plan on carrying a balance, sometimes referred to as revolvers, it is still a good card to have because it allows over a year without paying interest. This also gives ample time to shop around later for a balance transfer offer if needed around the one year mark.
May 4, 2012
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