Does The Freedom Or Freedom Unlimited Offer A Better Incremental Return?

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Reader Rohit asked a question in the Ask Lucky forum about whether he should apply for the Chase Freedom® Card or Chase Freedom® Unlimited.

The premise is that he has the Chase Sapphire Preferred® Card, and wants to apply for one of those no annual fee cards, given that they’re great complements to the Sapphire Preferred. Which is worth more — 5x points in select categories on the Freedom Card, or 1.5x points across the board on the Freedom Unlimited Card?

Ultimately there’s no “one size fits all” answer, as it all depends on your spend pattern. So the best I can do is to provide a general outline by which you can decide.

What’s the incremental return on the Freedom Unlimited?

The Chase Freedom® Unlimited offers 1.5x points on all spend, and in conjunction with a card accruing Ultimate Rewards points, those points can be converted into Ultimate Rewards points as well.

Earning 1.5x Ultimate Rewards points per dollar on non-bonused spend is better than the return offered on any other card accruing Ultimate Rewards points. What’s the value of that incremental return?

  • I value Ultimate Rewards points at ~1.7 cents each, so since the return is 0.5 points better per dollar spent, it’s an incremental return of 0.85 cents per dollar spent
  • However, a further consideration is if you have another card that offers a compelling return on spend; I also have The Amex EveryDay® Preferred Credit Card from American Express, which offers 1.5x points on non-bonused spend, assuming you make at least 30 transactions per billing cycle

So as much as I love the Chase Freedom® Unlimited and it’s a card I have myself, personally the incremental return for me isn’t that high, since it’s also spend I could put on the Amex EveryDay Preferred, which offers a similar return; however, that’s not a card that everyone has.

What’s the incremental return on the Freedom Card?

The Chase Freedom® Card offers 5x points in rotating quarterly categories, on up to $1,500 of spend per quarter. So how do you calculate the incremental return on that? Well, let’s use the 2016 bonus calendar as an example:

Chase-Freedom-Calendar

I don’t think it’s fair to say that the Freedom Card offers four additional points per dollar spent in all those categories. Instead the incremental return should be measured based on what the next best card is for spend in those categories. For example:

So in reality I view this incremental return as being anywhere between 0.5 points and 3.5 points per dollar spent, depending on the category and which other cards you have.

Bottom line

There’s big value to be had with both the Chase Freedom® Card and Chase Freedom® Unlimited. I have both of these cards, and find them to be fantastic. It’s great to have a no annual fee card long term card that not only helps you improve your credit score, but also helps you earn more points.

Personally I’d aim to try and get both of these cards eventually. Keep in mind you can potentially downgrade the Chase Sapphire Preferred® Card to either of these.

But if I had to give general advice, I’d say you’re more likely to get an all around better return earning 1.5x points with the Freedom Unlimited on virtually all purchases, rather than maximizing the bonus categories on the Freedom Card.

However, it all depends on what other cards you have, what you spend most on, etc.

To those of you who have either or both cards, which do you get more value out of — the Freedom or Freedom Unlimited?

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

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Comments

  1. I would advise him to apply for CSR instead, for a greater sign up bonus (too bad he missed 100K) and then convert CSP to either Freedom or FU. I wouldn’t recommend applying for either of these 2 cards outright as the sign up bonus is too small.

    After receiving CSR, I chose to convert my CSP to a second Freedom – this way I can get 5x per quarter on $3,000 in spend vs. $1,500. FU is a good card, but doesn’t come close to Freedom, especially if one already has Amex EDP (same 1.5 points return, and I like to diversify my points holdings)

  2. What is the highest reward bonus at application available for the freedom unlimited? Does it vary? Should I wait for higher than it is today?

  3. The advantage of the CFU is that earning is steady, no matter what you purchase. And, living in Manhattan, I do not have a car, so that the quarter when gasoline earns bonus points would be no good for me. Also, I do very little department store shopping, which knocks out two categories. For restaurants, it would be the CSR for me. Groceries would be the category I could earn significant points on. So, overall, I believe that CFU is the perfect companion to the CSR for me, as, by far, most of my spending is on travel and dining. The CFU perfect for mopping the rest — chump change — to make sure that I leave no points on the table.

    Incidentally, between now and April 18, Chase has a special offer on the CFU (I got it by email but I do not believe it’s targeted). Too bad I got the offer about 10 days after I was approved or I would have pockets easy 15K UR…

    “Eligibility:
    This product is not available to either (i) current cardmembers of this credit card, or (ii) previous cardmembers of this credit card who received a new cardmember bonus for this credit card within the last 24 months.

    $150 Bonus
    You will receive 15,000 bonus points with this bonus offer, which can be redeemed for $150 cash back. To qualify and receive your bonus, you must make Purchases totaling $500 or more during the first 3 months from account opening. (“Purchases” do not include balance transfers, cash advances, travelers checks, foreign currency, money orders, wire transfers or similar cash-like transactions, lottery tickets, casino gaming chips, race track wagers or similar betting transactions, any checks that access your account, interest, unauthorized or fraudulent charges, and fees of any kind, including an annual fee, if applicable.) After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. To be eligible for this bonus offer, account must be open and not in default at the time of fulfillment.

    $25 Bonus
    This product is not available to either (i) current cardmembers of this credit card, or (ii) previous cardmembers of this credit card who received a new cardmember bonus for this credit card within the last 24 months. You will receive 2,500 bonus points with this bonus offer, which can be redeemed for $25 cash back. To qualify for and receive your bonus, your First Purchase and addition of an authorized user to your account must both occur during the first 3 months from account opening. (“First Purchase” does not include balance transfers, cash advances, travelers checks, foreign currency, money orders, wire transfers or similar cash-like transactions, lottery tickets, casino gaming chips, race track wagers or similar betting transactions, any checks that access your account, interest, unauthorized or fraudulent charges, and fees of any kind, including an annual fee, if applicable.) After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. To be eligible for this bonus offer, account must be open and not in default at the time of fulfillment.

    Adding An Authorized User
    All correspondence, including credit cards, statements, and notifications will be sent to the name and address on file for the primary cardmember. The primary cardmember is responsible for repaying all balances on this account. Authorized users will have the same charging privileges as the primary cardmember but will not be financially responsible. Chase provides account information to the credit reporting agencies for all account users. This information could impact an authorized user’s credit score. When you tell us to add a user to your account, you’re confirming that you have a relationship with the person or people whose name(s) and address(es) you’ve told us, that all their information is correct, and that you have their consent to add them. If Chase determines you’ve given us fraudulent name and address information or did not have such consent, Chase can close this account.”

  4. I will provide the link for the CFU offer I got the in the email if anyone is interested and believes that it may be different from the link on Chase’s website.

  5. @ BFD — I’ve never seen a better public offer than the one available now — I believe the offer has been the same since the card was introduced, and I don’t think it will get any better.

  6. @Lucky — I got the CFU in early March and it offered no sign up bonus. It seems to me that it’s now better because, as I just posted above, Chase is now offering $150 (15K UR) after a $500 spend for a limited time, including 2500 UR for adding a user. If I am wrong about that then I will go back to Chase to claim the bonus.

  7. I would go with Freedom over Freedom Unlimited (I think 5x Freedom category is better than 1.5 Freedom). Now I’m on the fence between SPG Amex vs. Freedom Unlimited for non-bonus spend. What do you think, @Lucky?

  8. Better for the vast majority of your unbonused spend to be going towards a signup bonus. Dithering over 1.5x vs. 1.25x is a waste of time.

  9. Could anyone tell me if a downgrade from the CSP to the Freedom or Freedom Unlimited counts toward the 5/24? I am at 4/24 currently and I am thinking of picking up the Ink Business Preferred (sole proprietorship) to take advantage of the high sign up bonus. I want to unload the CSP as I have the CSR and never use it anymore. My yearly due is coming up soon so trying to decide what order I should do this in. Thanks!

  10. @ Eric — It’s close in terms of the value of points, though personally I think 1.5 Ultimate Rewards points are worth slightly more than one Starpoint.

  11. The average person should always be working towards a sign up bonus (which is usually 10-50x) or getting 5x everywhere through the Freedom or Ink purchases of gift cards. You would have to be a really high spender to make 1.5x make sense.

  12. The Freedom Unlimited is great for Costco. (I gladly/sadly shop there a lot.). They only accept Visa or debit cards, no Amex, so this is the way for me to maximize those purchases.

  13. @Tom says: “You would have to be a really high spender to make 1.5x make sense.”

    And yet for years — even now among those who drank too much of the kool-aid, despite overwhelming evidence to contrary — 1x on SPG AMEX made/makes perfect sense, leading to the much repeated and always bogus claim that starpoints were/are the most valuable points currency there has ever been…

    Go figure…

    What I now do is to rake in large numbers of UR points on large spend with the CSR and then use the CFU to mop up the loose change… The CFU by itself would be better than the SPG AMEX but not much better — meaning that not enough points would be earned to make it rewarding without spending so much that it defies the whole purpose of playing the game in the first place: cheap travel…

  14. Hey Ben, I’m Rohit in the ask Lucky Forums but I go by RD on your posts, thank you so much for the feature on your gorgeous page, but more importantly thank you for the detailed answer to my question, so I will definitely apply for the freedom unlimited FIRST, then the freedom based on what I’m reading here. I’m finishing meeting the spend requirement for the bonus on the Marriott rewards card, then I will apply for the CFU and get the bonus on that as well. Also when you use the chase non annual fee cards, and get that cash back, does it automatically convert to UR points or do I have to go to my credit card and do some clicking to convert? Thanks for you help again Ben!

    Also to @IKC I will switch to the CSR in a little over a year because my international travel will increase significantly with UA and a little bit of BA and KE, and only when will I be fully exploiting the perks of the CSR like the priority pass, and all the such, but since I’m not using all those right now, I don’t want to be paying $450 Annually for that.

  15. @RD says: ” Also when you use the chase non annual fee cards, and get that cash back, does it automatically convert to UR points or do I have to go to my credit card and do some clicking to convert? …
    “Also to @IKC I will switch to the CSR in a little over a year because my international travel will increase significantly with UA and a little bit of BA and KE, and only when will I be fully exploiting the perks of the CSR like the priority pass, and all the such, but since I’m not using all those right now, I don’t want to be paying $450 Annually for that.”

    The time to go for the CSR is NOW because it is the answer to your queries above:

    — Unless you have another Chase card that already earns UR points, you will not be able to convert the cashback from the CFU to UR points. Therefore, getting the CSR would not only dramatically boost your ability to earn UR points quickly, it will also provide you will the perfect partner to your CFU by enabling you to convert the CFU’s cashback to UR points, which, BTW, transfer 1:1 to MR points, since it sounds like you’re interested in Marriott Rewards

    — The CSR annual fee (AF) is NOT $450/per year because you get, in REAL TIME (i.e., as you spend), a $300 credit for all your travel-related purchases, defined VERY broadly. Therefore, the erroneous perception notwithstanding, the CSR AF is effectively “just” $150 and NOT $450. However, there is even better news: because the $300 travel credit is awarded per calendar year and you pay your AF on the anniversary of the card, things workout so that during the first year after you are approved for the CSR you’ll get the travel twice for $600, and 3 times within the first 2 years for $900. This means that your first year AF on the CSR is -$150.00 ( you actually make money the first!) and $0.00 the first two years!!!

    In my view, the CFU by itself is not as valuable as it could be. On the other hand, it soars when paired with the CSR, which is the card to get, like yesterday, but now is still the time.

    The CSR, if you don’t got it, get it!

  16. @DCS at the moment I have the chase sapphire preferred so that Cash back would be converted to UR points, but for the $300 travel credit, are we allowed to use that for through other airline sites, or do we have to do it all through Chase? Also I’m at 4/24 so I can only get the freedom or freedom unlimited I cannot get the sapphire reserve for another few months.

  17. Does anyone know if my accumulated miles on CSP are lost (or not) if I downgrade from the CSP to the Freedom or Freedom Unlimited?

  18. @ Sue — You keep your points, though you’ll no longer be able to convert them into a partner program until you have a card that earns Ultimate Rewards points again.

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