In the battle of Chase Freedom vs. Chase Freedom Unlimited, the Freedom offers better value.
The only difference between the Freedom and the Unlimited is the sign-up bonus and earning rate.
Both cards earn Ultimate Reward points that you can redeem for cash back at a rate of 1 cent per point. Alternatively, if you have a premium Ultimate Reward earning card, such as the Sapphire Preferred or Reserve, you can combine your points and access more valuable redemption options.
Chase Freedom Unlimited Benefits
The Chase Freedom unlimited sign-up bonus
The Unlimited does not currently have a sign-up bonus. It used to offer a bonus that was identical to the Freedom card: $150 or 15,000 points after $500 in spending within the first three months.
3% / 3x first year up to $20,000
The Unlimited offers an increased earning rate of 3 points per dollar on up to $20,000 in spend during the first year. After the first year or $20,000 in spend, the earning rate decreases to 1.5 points per dollar.
Chase Freedom benefits
$150 or 15,000 point sign-up bonus
The Freedom card comes with a 15,000 point sign-up bonus after spending $500 in the first three months. That’s equal to $150 if redeemed for cash back.
5% / 5x rotating categories
The Freedom card earns 5% cash back on select merchant categories each quarter. Unfortunately, the categories do not always align with your natural spending. The past four years of categories have been:
|2015 Q4||Amazon.com, Zappos.com, Audible.com, Diapers.com|
|2016 Q1||Gas stations, public transit|
|2016 Q2||Wholesale clubs, grocery stores|
|2016 Q3||Wholesale clubs, restaurants|
|2016 Q4||Wholesale clubs, department stores, drug stores|
|2017 Q1||Gas stations, local commuter transportation|
|2017 Q2||Drug stores, grocery stores|
|2017 Q3||Restaurants, movie theaters|
|2017 Q4||Department stores, Walmart|
|2018 Q1||Gas stations, mobile wallets, internet, cable, and phone service|
|2018 Q2||Groceries, PayPal, Chase Pay|
|2018 Q3||Gas stations, Lyft, Walgreens|
|2018 Q4||Wholesale clubs, department stores, Chase Pay|
|2019 Q1||Gas stations, tolls, drug stores|
|2019 Q2||Grocery stores, home improvement stores|
|2019 Q3||Gas stations, streaming services|
|2019 Q4||Chase pay, PayPal, department stores|
|2020 Q1||Gas stations, internet, cable, phone services, select streaming services|
Purchases made in any other category earn one point per dollar.
Other benefits that both cards offer
In addition to the aforementioned perks, both cards also provide the following benefits:
- No annual fee;
- 0% introductory APR for 15 months on purchases and balance transfers; and
- Access to Chase Credit Journey, a service that allows you to check your TransUnion-based credit score (although, you do not need to be a Chase customer to sign up for Credit Journey).
Requirements for approval
The Freedom and Unlimited have less stringent approval requirements than other Chase cards.
The minimum credit line for these cards is $300, meaning Chase will not approve an application unless a minimum of a $300 credit line can be extended to the applicant.
Additionally, Chase requires the following:
- The applicant cannot have opened more than four personal credit cards across all card issuers over the past 24 months;
- The applicant does not currently have the card being applied for; and
- The applicant has not received the cardmember bonus for the card within the past 48 months.
While Chase does not have explicitly stated requirements for minimum credit scores, an applicant’s odds of approval increase substantially with a credit score of at least 700. You can check your score for free through Credit Karma here.
Freedom wins (most of the time)
If you spend $6,000 entirely on the Freedom’s 5% rotating bonus categories, you will earn 45,000 points (30,000 from 5x categories + 15,000 sign-up bonus). Spending the same amount on the Unlimited would only net you 18,000 points in the first year (3 points per dollar).
Keep in mind, maxing out the 5x bonus categories for any given quarter may not be feasible. I struggled to spend $1,500 at restaurants and movie theatres in Q3 2017 and Lyft, Walgreens, and gas stations in Q3 2018.
What if you were only able to take advantage of half of the 5x capacity?
If only utilizing half of the 5x bonus capacity, you would earn 30,000 points (15,000 from 5x categories + 15,000 sign-up bonus). You would need to spend $10,000 to earn the same amount of points with the Unlimited.
Unlimited can be useful
If you spend $20,000 entirely on the Unlimited in the first year, you would earn 60,000 points.
Alternatively, if you spend the same $20,000 on the Freedom and maximized the 5x categories, you would earn:
15,000 Sign up Bonus + 30,000 from 5x Categories + 14,000 from 1x Spending= 59,000 points
A 3x / 3% earning card, even only for the first year, is pretty good. However, you need to take into account the time it would take to acquire the points. It would certainly be a lot quicker to spend $500 on the Freedom and earn the 15,500 points compared to spending $5,166 on the Unlimited to earn the same amount.
Better options available
There are a few reasons one may want to apply for the Freedom or Unlimited:
- Starting to build credit;
- Belief Chase an application for higher-end cards, such as the Sapphire Preferred, would not be approved;
- Inability to meet the minimum spending required for the Preferred or Reserve and no interest in using manufactured spending methods;
- Apathy regarding maximizing cashback or points; or
- Preference for cards without annual fees.
With all that said, I don’t see many situations when I would advise anyone to apply for either of the Freedom cards.
The Freedom cards require you to be under 5/24, meaning you cannot have opened more than four personal credit card accounts across any issuer within the past 24 months. If you satisfy that condition, you are likely eligible for many of the other cards that fall under the 5/24 restriction. The cards currently subject to the 5/24 rule are:
- Chase Freedom;
- Chase Freedom Unlimited;
- Ink Business Cash;
- Ink Business Preferred;
- Chase Sapphire Preferred;
- Chase Sapphire Reserve;
- Southwest Rapid Rewards Plus;
- United Club;
- United Club Business;
- United Explorer;
- United Explorer Business;
- Southwest Rapid Rewards Premier;
- Southwest Rapid Rewards Premier Business; and
- Southwest Rapid Rewards Priority.
Most of the cards on the above list have lucrative sign-up bonuses that would certainly outpace either the Freedom or the Unlimited’s earnings in the first year.
As previously mentioned, one of the few reasons you may want to apply for a Freedom card, is because you have a brief credit history or low credit score. While the minimum credit limit allowed for the Freedom or the Unlimited card is $300, the minimum for the Preferred and Reserve cards is usually $5,000.
If this is your first or second credit card, Chase may not be willing to extend $5,000 in credit. In this situation, the Freedom cards may be worth considering, along with other entry-level cards such as the Citi Double Cash.
On the other hand, if you have a credit score of at least 700, you should take a chance and apply for one of Chase’s premium cards.
The Sapphire Preferred has a $95 annual fee, but features a 60,000 point sign-up bonus after spending $4,000 in the first three months. The card also unlocks more lucrative redemption options for your points. Even if you are only interested in cash back, the Preferred offers better first-year value than the Freedom cards.
Taking into account the sign-up bonus and annual fee on the Sapphire Preferred, you would earn 13.6% cash back on your first $4,000 in spend. Similarly, the Chase Ink Preferred would earn 15.1% cash back per dollar on the first $5,000 in spending.
Another option is the Ink business cards, which you do not need to currently own a business to apply for. The Ink Cash card offers a 50,000 point sign-up bonus after only $3,000 in spend. It also provides 5 points per dollar on purchases at office supply stores. You can maximize this 5x category by purchasing gift cards from Staples or Gyft.com.
If you do not own a traditional business, see my guide to How to Apply for an Ink Card without a Business.
Some bloggers will lump the Freedom cards into something they dub the “Chase Trifecta.” The theory is that having the Chase Freedom, Sapphire Reserve, and Chase Ink Preferred in your wallet is the best way to maximize your Ultimate Reward point earnings.
I agree that the Ink cards can be vital for manufactured spending. I also believe the Reserve card can help maximize redemption value. However, I don’t see the need for the Freedom or the Unlimited. You’d be better off having an Ink Card or focusing on sign-ups for other cards.
Downgrading is the best path
You should consider getting one of the premium Ultimate Reward cards. Then, after the first year, convert (downgrade) it to a Freedom or Unlimited.
Since they are subject to 5/24, you should never cancel any Chase card that earns Ultimate Rewards. Instead, always downgrade to a no annual fee card. You still have the option to switch back to the Preferred or Reserve at a later date. You will need to call in to downgrade Chase Sapphire Preferred or Reserve.
When you choose to downgrade a card, you are not eligible for a cardmember sign-up bonus on your new card. Therefore, you will not receive the 15,000 point bonus on the Freedom. You will also not be eligible for the $20,000 of first-year 3x earning capacity on the Unlimited.
Instead, you will only earn 1.5 points per dollar with the Unlimited. That’s not bad, but it won’t get you much. Assuming you do not have a large amount of non-bonus category spend, it does not make sense to switch to the Unlimited.
Even if you plan on manufacturing spend, you’re going to be hard-pressed to find methods that make economic sense at a 1.5x earning rate. You will have much more success using a card with 3-5x category bonuses.
Therefore, when you downgrade, you should choose the Freedom over the Unlimited. Take advantage of the 5x categories and charge the rest of your spending to other cards. You could put everyday spending on new cards to meet sign-up bonuses. Alternatively, you could use a 2% cash back card, such as the Citi Double Cash.
Looking at the rewards structure of each card, it’s clear why you should choose the Freedom over the Unlimited.
The additional 0.5 points per dollar on all purchases that come from the Unlimited is not worth giving up the potential 30,000 points from 5x category spending.
Nevertheless, if you believe you can get approved for the Sapphire Preferred or Reserve, you should apply for those cards instead. Later, if you no longer wish to pay the annual fee on those cards, you can downgrade to the Freedom card.