Chase Freedom Changes Could Be REALLY Positive

In the interest of full disclosure, One Mile At A Time earns a referral bonus for anyone that’s approved through some of the below links. These are the best publicly available offers that we have found for each card. Please check out our advertiser policy for further details about the partners we work with. Thanks for your support!

Earlier I wrote about some huge changes potentially coming to the Chase Freedom. This is Chase’s no annual fee credit card which presently offers 5% cash back in rotating quarterly categories, and 1% cash back on all other purchases.

The best part is that in conjunction with the Chase Sapphire Preferred® Card or Ink Plus® Business Credit Card you can convert those points into Ultimate Rewards points, meaning you’re really earning 5x Ultimate Rewards points in select rotating quarterly categories. That’s a fantastic return, and makes the card one I use in conjunction with my cards accruing Ultimate Rewards points to maximize points.

Earlier I wrote about the speculation of the Chase Freedom switching to earning just 1.5% cash back with no category bonuses, rather than 1% cash back on all purchases and then 5% cash back in select rotating categories. These changes are supposed to kick in starting in March, though this is based on unofficial reports. The name of the new product is supposed to be Chase Freedom Unlimited.

I called these changes negative, as I was thinking about the card in the context of what I use it for, which is the 5x points bonus categories.

But as readers pointed out, I wasn’t analyzing this completely. These changes could actually be very positive.

If the Chase Freedom offers 1.5% cash back and those points can continue to be converted into Ultimate Rewards points, that means we have a new card which indirectly offers 1.5 Ultimate Rewards points per dollar spent.

Korean-Air-First-Class-103
Redeem Chase Ultimate Rewards points for Korean Air first class

When I first thought of that I figured it was too good to be true, that the Chase Freedom would basically offer a better return than the Chase Sapphire Preferred® Card.

But it actually makes perfect sense when you view it competitively. American Express has the Amex EveryDay® Preferred Credit Card, which offers a 50% points bonus when you make at least 30 transactions per billing cycle, meaning you’re essentially earning 1.5 Membership Rewards points per dollar spent.

This could simply be a competitor to that, and arguably better, if it doesn’t have an annual fee and doesn’t have a minimum number of purchases every billing cycle.

Bottom line

This is all speculation at this point, but I figured it was worth writing a follow-up post, since I really didn’t analyze the situation properly earlier (it’s early on a Sunday morning, so cut me some slack). 😉

These changes could be positive or negative, and that’s largely reliant upon whether the cash back earned on the Chase Freedom can continue to be converted into Ultimate Rewards points at a 1:1 ratio.

Would you view these potential changes to the Chase Freedom (losing the 5% cash back category but adding 1.5% cash back on everyday purchases) as a net positive?


Non-Affiliate Product Disclaimer: The information for the AmEx Everyday Preferred has been collected independently by One Mile At A Time. The card details on this page have not been reviewed or provided by the card issuer.

Regarding Comments: The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Comments

  1. I think it would lead to a lot more use of the card instead of just the 5x categories. It would be more valuable then a flat 2% card with no annual fee which could be huge for chase…although most people in america will just use it as cashback like the quicksilver…but better for us!

    But if it eliminates UR transfers and is just strictly cash back it would be another negative for Chase. I don’t see this happening though.

  2. The way I do credit card spend…I love the 5 percent cash back. My wife has one freedom card and I have two one was from chase and the other was a old bank one card they converted to one. I will miss 5 percent cash back. Right now we can spend 4500 a quarter between the three cards and get 225 cash back. Depending on the categories we do. To me this will not be good since we only use the freedom card for the bonus categories. It reminds me of when chase did the 10 cent bonus on each transaction and the 10 percent bonus on the total amount of points earned. They made exciting changes and took that away. Seems like if they force the old card to the new system will not be good for me. Just another devaluation of a card. That being said a customer who it is their only card could benefit from the new system.

  3. For me personally, it is probably worse, because the rotating categories allowed me to get a fantastic return during those quarters and Amex Everyday Preferred lets me get 1.5 on non-category spend year round. Now, with this potential change, the Freedom card goes from a card that compliments other cards in my wallet to one that is essentially a substitute for the Everyday Preferred card, when you look at value from everyday spend. While for some the change might be good, I see value in unique products that compliment one another, and this change limits my ability to maximize my return on spending. However, for those who aren’t fans of Everyday Preferred, I could see this change being very positive, especially if they didn’t get much value out of the rotating categories. The other thing this does is that it positions the card as a competitor to Quicksilver. Capital One has been very aggressive and strong in their marketing for that card, so Chase might be trying to compete with them.

  4. If UR transfers are allowed, I can do a lot of shopping at certain malls and earn massive amounts of UR points for 0.56 cents each. Not too shabby!

  5. I wouldn’t say they are a net positive. I only used the freedom for 5% bonus categories. Any other purchases went on other cards. As you pointed out in your first post, it probably benefits the uneducated consumer though.

  6. In your paragraph about Amex EveryDay® Preferred Credit Card, don’t you mean MEMBERSHIP Rewards rather than ULTIMATE Rewards? (Yeah, it’s “early” Sunday AM; will cut you some slack.)

  7. I don’t see this as positive at all.

    Through Chase cards we already get
    5x Office supply
    5x Cellphone, internet, cable TV
    2x gas stations
    2x travel
    2x dining

    Then Chase Freedom gives us the opportunity to make an additional 5x in these revolving categories. But if you take that out, how many spending locations are there that don’t fit into the above categories? I mean, I guess it’ll be nice at Target/Walmart, but I see this as a complete net loss.

    Remember 10x per dollar at Amazon around Christmas? Gonna take a lot of 1.5x otherwise-unbonused spend to equal that

  8. Must have had a fun night last night and are a little hazy this morning, Ben?? 🙂 Don’t see this as positive at all… 1.5x is not very useful when there are lots of 2%/2x – 5%/5x options out there. This change would essentially sockdrawer the card to me.

  9. @Curtis: You are missing the whole point, which is that 1.5UR are worth more than 2 cents. If you value UR points at 1.5 cents each (I do), then you would be effectively getting 2.25% back on ALL purchases! There are very few options with a return like that on everything.

  10. @ Curtis – Seriously, all the wink winks, smileys, and references to Lucky’s sex life are just boring, unfunny, and crass. You are just cluttering the comments with nonsense.

  11. @ Jed for the vast majority of people who use multiple cards I still don’t see this as being a good thing. With the three different cards between my family we can get 5 UR for 4500 dollars each 1/4…Thats up to 22500 points. The new system would only give us 6,750 points. For me to match the 22500 I would have to have an additional 10,500 spend in the 1/4 to equal the old system. The reality is a lot of that spend would go to other cards, like my Citi prestige card for travel. I get that sometimes you do not max your 5% spend but this 1/4 is gas and next 1/4 is grocery so it is very easy considering you can purchase gift cards to reach the max. So I would much rather have 5% UR points or 7.5% back assuming transfer to my Sapphire UR account than a measly 2.25% on everything.

  12. @Jed – I realize they are worth more than 2cents – been in this game over a decade. Point was that I can get 5x UR buying gift cards at office store with a fee and then use those gift cards for all my purchases and I’m still getting more than 1.5x UR after that fee… The 5x Freedom quarterly is a great way to get 5x at places besides office stores sometimes throughout the year, and many of those places have ways of buying gift cards with fees lower than office stores, which you can then use for all (some) of your non-bonused spend the rest of the year.

  13. @ Chancer – WTH? ha! … um, ok. It was a “what are you smoking this morning” type of reference. If anyone took it too far and made it not classy, it was you, sir. Congrats!

  14. I don’t know. I don’t have the freedom (stupid 5/24) but I don’t see this as an incentive to get one, either.

  15. @atxtravel – Good point. Have some other fees involved in your process potentially, but like where you’re headed.

  16. Honestly this is a huge net negative. If you maxed out the freedom’s current 5x quarter bonus of $1,500, for a yearly total of $6,000 that would give you 30,000 UR points. To get that same amount in the new system you would have to spend $20,000 on the card. So if you don’t mind putting over 20k on your freedom it is ok. But I would rather spread out my points.

  17. @Curtis — that’s the cost of buying 3.95 GC and 68 cent money orders at Simon mall. Any other method of earning UR points via GCs costs the same or more per point in absence of any promos like OM does. I’d rather hit the mall 3-4x a week and liquidate 500s then deal with a stack of $100-300 GCs.

  18. Definitely from Chase’s standpoint, I don’t see how this makes sense. The 5x categories are too capped for any real abuse to happen, and the 5x is a great selling point for the card. Most people just think 5 ppd, and don’t care that it’s revolving categories and that it’s $1500 per quarter, instead of $6000 a year (which would be better from an earning perspective, but worse for a customer standpoint, being as after they hit $6k they’d be done for the year). I can’t imagine 1.5% CB being such a hot selling point. People have 1.5% and 2% CB cards coming out of their ears. Most of them don’t realize that UR points are more valuable than CB, and chase doesn’t try to sell it that way. I don’t see what chase has to lose from the current offering, and who they think they’d gain by changing. For myself, I have enough UR earning cards (4 inks = 1M a year) that I’m not desperate for a 1.5% card to MS at Simon. There are more valuable ways to exploit straight MS than that.

  19. I was responding to the comment ” 1.5x is not very useful when there are lots of 2%/2x – 5%/5x options out there”. The point is that 1.5x is BETTER than 2%. It is good to have a card that earns those types of rewards for non-bonused spend, Most of my Manufactured spending is at Simon Malls, none of my cards earn a category bonus there. Obviously whether or not this is better than the current 5x rotating categories depends on your spend patterns, but for me the 5x categories are not worth much because of the $1500 limit. Also, I manufacture more than $20,000 in spending almost every week, so this isn’t an unreasonable amount to put on it if I want UR points.

    BTW, I’m just sharing one perspective. Other opinions are equally valuable.

  20. This would definitely increase spending on Chase cards for me in lieu of cards from other companies, but only if they are proper UR.

  21. I actually would have a lot more use for 1.5 pts on all spend. The Amazon bonus was truly exceptional. This quarter’s bonus is completely useless to me. It’s hard enough getting my other half on board with regular bonus categories much less ones that change every 90 days. If you have the time, energy, and spending pattern to max out each quarterly category, kudos to you. Personally, my Freedom sits in a desk drawer.

  22. The change would only benefit those who MS and would make it one of their primary MS cards, and those who only use the Freedom for all spend, and don’t spend much on the bonuses.

    You have to take into account opportunity cost; lets say your everyday spend is currently on the CSP and now you switch over to the freedom. You only get an extra 0.5 UR/$. You previously would get 30k UR/year on the freedom if you max out each category, but now would have to spend 60k per year in non-bonus spend to get the same UR pts/year, assuming that non-bonus spend would have otherwise gone to the CSP. Even if you only got half of the freedom bonuses at 3k per year spend for 15k total UR points, that’s still 30k/year in non-bonus spend to get the same number of UR pts.

    Sure, it would increase my use of the card. However, it would significantly decrease my overall return on spend, would result in fewer net points, and would be a HUGE overall negative. It will likely be the same for most people reading this blog as well. This is likely Chase’s intention, people use the card more and net fewer overall UR points.

  23. Huge negative for all the reasons the negative comments above have mentioned. I can easily max out my yearly $6K Everyday Preferred grocery max spend in 9 months for 4.5 points per $, and my $1500 2nd quarter max grocery spend on Freedom at 5X in the other 3 months. The 10X for Amazon was just amazing, especially since if you didn’t spend the max that quarter, you could just buy Amazon gift cards to move the bonused spend to the following year.

    Much of my natural spend is bonused, and as pointed out above, you can buy cards in grocery stores to use in places where you don’t get a bonus with any of your cards. Maybe for those people who are doing $20K a month at Simon Malls it will work in their favor. But for me, if the Freedom just goes to 1.5, it’s joining my socks in a very dark drawer.

  24. I would take the trade as long as the 1.5 can still be transferred to UR. If it’s 1.5% just cash back then I say “meh” and “cancel”. If it’s 1.5 in addition to the categories that’s fine by me.

  25. so with this change, is there any reason I should keep my chase sapphire preferred card and not move back to this no annual fee chase freedom card?

  26. @Alex – As things currently stand, you can’t transfer UR points to airlines/hotels if you only have the Freedom.

  27. I don’t typically max out the bonus categories (and will soon spend even less in one of the most common categories, gas stations – I now have a plug-in electric hybrid and will probably fill it up <5-6 times per year), so this would be a net positive. In fact, my Amex Everyday (1.2 points/dollar if you make 20 or more purchases/month) is my go-to card for "everything else" that doesn't get 2X or greater bonus points via other cards. So if Freedom became 1.5X and transfers to UR were still allowed and the card were free, I'd drop the Amex Everday in a heartbeat.

  28. Dream on. You think this new card is going to allow you to earn 1.5X UR points at the mall? Oh, sure….riiiiiiiiiight.

    Chase is not stupid, they know all about the game, they are clearly watching MSers activities and are aggressively making significant changes to turn off every major exploit. Enabling 1.5X UR generation everywhere anytime is exactly what they are working hard to end.

    Freedom cards are not aimed at the segment of the market that also has a premium card. The Freedom card is marketed at the bottom end – it’s not a card for earning points for a trip to Bora Bora, it’s to get 20 bucks in cash back. If they allowed widespread 1.5X that translated into UR points, they would be opening themselves up to a huge exposure. Not gonna happen. And any blogger who tells you it will is either a liar or an idiot (or both).

    Dream on if you want, but the banks have finally woken up. They are not going to be played for chumps any more, and the age of easy MS and dreams of luxury travel for ne’er-do-wells is over. You can thank the blogs for that.

  29. Chase already announced the 5% categories for 2016, so I don’t see this change happening in March. January 2017 is the earliest I see see this potential change taking effect.

  30. I find it surprising they’d do 1.5 unlimited UR points after all the cracking down in general. Even if so, so many people are locked out under 5/24 that it really is kind of irrelevant.

  31. Appears that everyone is left happy for once. As posted everywhere it’s a new product and original 5x quarterly one is not changing for those of us that prefer that.

  32. I personally think it’s a negative but a silver lining is that if you want to go the easy way with MS if you need a few thousand points the 1.5x back will take the 3% paypal fee to a family or trusted friend to 1.5% fee as a purchase. So a $3000 spend with no other purchases would only be $45 fee.

  33. Am I the second one remember that Chase freedom had 10x points at amazon around the end of last year? that is 5x with 1500 max, and extra 5x in ADDITIONAL 1500 max. I bough 3000 amazon gift card and got 150 dollar from it, boom, $150. and its April now, I still have $2000 in amazon account. It sums up my first year of using chase freedom, total value of cashback is $700(including the opening bonus$200, 1500*5*0.05=375,), I used every 1500*5(4 quarters plus extra 1500 from amazon) limit to earn my cashback, and now I have a discover, same thing. Cashback is like crazy.

    My wife has citibank and Amex and so on. Total cashback she earned last year was around $500. and total money we spend (except for insurance mortgage and some other places that dont take credit card) was about 30k,(we use mint.com), so, basically every dollar we spend we get averagely 3-4 cents back.

    More, I use chase freedom to buy shell gas gift card, then pump with gift card. Shell gift card is counted as debit card, so I save 10 cents/gallon for gas,(gas price in CA last years was $4 in average, so that was extra 2.5% on saving on top of 5% from freedom) And we just spend out those $1500 shell gift card last month. now we have another $3000 shell gift card I bought this year with chase freedom and Discover.

    Costco is taking VISA starting June 16. And before that I bought Costco gift card and use in Costco gas/store, all have 5%.

    Anyways, you must want to say it is just too much work to do all of this. Well, you might change your mind when you have your new phone/computer/flat tv or all of them for free at the end of year. That is $600-1200 in cash!(depends on how many card you have and how much you spend)

    Glad to know that this 1.5% thing is just a new product, dont change current chase freedom holder.

Leave a Reply

Your email address will not be published. Required fields are marked *