The Chase Freedom comes with the following reward structure:
- Earn 5% cash back on rotating bonus categories, up to $1,500 in combined spend each quarter you activate.
- Earn 1% cash back on everything else
Users need to be proactive to get the most out of this rewards structure. You have to remember to “activate” every quarter to actually earn that 5% on the bonus categories, otherwise you will only earn 1%. If you are using the Chase Freedom in conjunction with another rewards card that will earn you more than 1%, you will also need to track your spending in the bonus categories so that once you hit that spending cap, you will move to a card with better rewards rate. It may not be worth it for some.
But for those considering maximizing the rewards of a sport they train for constantly, the 5% return on the Freedom could be worth even more when transferred to a card like the Chase Sapphire Preferred® card. Where Chase Sapphire Reserve®.
When you redeem rewards for travel on one of these cards, your Chase Ultimate Rewards points are worth 25%, 50% and 25% more respectively. This could mean for Sapphire Preferred and Ink Business Preferred cardholders that 5% earned on Freedom and Ink Business Preferred is worth 6.25% when redeemed for travel and for Sapphire Reserve cardholders that 5% is worth 7 .5% when redeemed for travel. It’s a stellar reward value
Or you can maximize your earnings by transferring the points you’ve earned to one of many airline partners, including United, Southwest Airlines and Hyatt.. This is only available if you also hold one of the cards on which transfers are allowed.
To determine the rewards potential of the Chase Freedom card, we need to look at the bonus categories and calculate what an American household could spend in those areas. Chase doesn’t publish quarterly categories for the Freedom card more than a few weeks in advance, so we’re looking at four recent quarterly categories.
- Q4 2019: Department stores; PayPal and Chase Pay
- Q1 2020: Gas stations, some streaming services, internet, cable and phone services.
- Q2 2020: subscriptions to gyms and fitness clubs, grocery stores and certain streaming services
- Q3 2020: Amazon.com, Whole Foods Market
Forbes uses data from various government agencies to determine both basic incomes and spending averages in various categories. The 70th percentile earner brings in $100,172 a year and we base our spending on that figure.
With that in mind, many families spend at least $1,500 per quarter in the bonus categories listed based on US government data. Chase caps quarterly earnings bonuses at $1,500 per quarter or $6,000 per year, after which the rate of pay drops to an unlimited rate of 1%. When maxed out, a Chase Freedom cardholder will earn 30,000 Chase Ultimate Rewards in bonus categories alone.
We estimated that the remaining annual household spending on credit cards is $20,410. If all of these expenses are placed on the Chase Freedom card, the cardholder would earn an additional 20,410 Chase Ultimate rewards. Total earnings of 50,410 Chase Ultimate Rewards per year are in addition to the first year welcome bonus.
Note that Chase Ultimate Rewards cards are best taken as a family. If a Freedom card is used in conjunction with a Sapphire Preferred, Sapphire Reserve or Business Ink Preferred card, rewards may be combined into one account. This account will have the ability to transfer Chase Ultimate Rewards to airline and hotel partners, which could make them worth much more than the 1 cent on the dollar they have if you only have a Freedom card.