Upgrade Chase Freedom to Freedom Unlimited?

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The Chase Freedom Unlimited SM is an impressive card, but should you upgrade your Chase Freedom to the Unlimited version?

Upgrade Chase Freedom to Freedom Unlimited

Chase just rolled out their newest credit card, the Chase Freedom Unlimited SM, this April. The new card does not disappoint with its versatility and generous sign-on bonus. Best of all, Chase Freedom Unlimited does as its name suggests – offers unlimited 1.5% cash back on all purchases.

These are not the only reason why Chase’s new card is a string performer against competing cards. See how else the Chase Freedom Unlimited SM stacks up.

The Pros:

Sign On Bonuses with No Annual Fee

The Chase Freedom Unlimited SM comes with a generous $150 sign-on bonus after you spend $500 in the first three months. Card members will also earn an additional $25 if they add-on an authorized user within the first three months.

0% APR for 15 months

Another thing that sets the Chase Freedom Unlimited SM apart is that they offer 0% APR for the first 15 months on all purchases and balance transfers. After the intro period, a variable APR of 14.24%, 19.24%, or 23.24% will be applied to both purchases and balance transfers.

Flat-Rate Cash Back

Unlike the Chase Freedom, the Freedom Unlimited comes with a flat-rate cash back offer of 1.5% cashback for all purchases. Reward points never expire for as long as the account remains open. The Chase Freedom is notorious for offering 5% cash back in rotating quarterly categories, while offering a standard 1% cash back rate for all other purchases.

Transfer Rewards to Other Chase Cards

Another unique feature of the Freedom Unlimited Card is that you can transfer your reward balance to other Chase cards with more valuable redemption options. Redeem your cash back reward for Chase’s Ultimate Rewards points. Ultimate Rewards points are worth .01 and can be redeemed for gift cards and trips booked through Chase’s travel portal.

No Limit Redemptions

You can redeem your reward points with no minimum redemption requirements. You can even redeem your point balance for as little as one cent. Usually cash back credit cards have minimums that must be met before cashing out, which can mean a lot of unused points if you don’t regularly meet the minimum threshold. However, with the Chase Freedom Unlimited SM, you will see every cent of cash back you earn.

The Cons:

No Bonus Spending Categories

While the flat 1.5% cash back rate is better than majority of other cards on the market, the Chase Freedom Unlimited SM does not offer higher percentage of cash back in bonus categories. For example, the Chase Freedom offered 5% cash back for groceries from grocery stores and Wholesale Clubs from April 1, 2016 to June 30, 2016.

If you normally spend $500 a month on groceries, you would have earned $75 in cash back through spending $1,500 on groceries from April to June. However, with the Chase Freedom Unlimited, that same spending would have only earned you $22.50. That is a huge difference as far as cash back offers go.

Higher Transaction Fees

Another downside about the Chase Freedom Unlimited SM is that it charges a 3% foreign transaction fee for every purchase made outside of the U.S. This is no big deal for non-travelers, but for those who regularly leave the U.S., it is best to leave the Chase Freedom Unlimited at home.

Also, the benefit of the 0% APR for the first 15 months of balance transfers is overshadowed by the costly 5% balance transfer fee. If you were wanting to tackle debt, this is not the card to help you do so. Transferring $10,000 worth of debt to the Freedom Unlimited card would cost you $500. You would be better off transferring your debt balance to a card that offers an introductory $0 fee balance transfer and 0% APR.

Upgrade Chase Freedom to Freedom Unlimited?

Not exactly. While Chase Freedom Unlimited SM is a great card on its own, it is even better used as a companion card. Card holders can glean even more benefits and perks from using two to three Chase cards for their spending. Just rotate your cards, using the card that offers the most cash back for the purchase (i.e. the Freedom for the 5% special category and the Freedom Unlimited for anything else) to maximize your percentage back.

Another reason to sign up for the Chase Freedom Unlimited SM instead of asking for a card transfer is so that you don’t miss out on the sign-on bonus. By transferring your Freedom to Freedom Unlimited, you will not be eligible for the $150 cash back promotion. The bottom line is the Chase Freedom Unlimited is great as a stand-alone card, but it is even better when used as companion card with the Chase Freedom card.

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