5 Reasons To Use Chase Freedom Unlimited For Everyday Spending

With the earning devaluation on the Starwood Preferred Guest card fast approaching, it’s time to start thinking about which card to use on non-category bonus spending after August.  I’ll explain why the Chase Freedom Unlimited® card could be a good choice.

My three favorite reward currencies are Starwood Preferred Guest Starpoints, Chase Ultimate Rewards points, and American Express Membership Rewards points.  Due to changes resulting from the SPG/Marriott merger, beginning in August, earning Starpoints from credit card spend on the SPG Amex is no longer ideal.

That leaves Chase Ultimate Rewards and American Express Membership Rewards.  I personally prefer to earn points in both programs because I like to diversify my points as much as possible.  Each program has its own transfer partners so I have lots of redemption options if I collect both.  For that reason, I’ll probably spread my spending between cards so that I can earn both currencies.

I understand that not everyone wants to take the time to learn about 2 different bank currencies, plus all of the different transfer partners.  If you want to keep it simple, Chase Ultimate Rewards is a great program with several redemption options.

Chase Freedom Unlimited is most valuable when you also have a card that earns transferable Ultimate Rewards points

A Chase Sapphire card that earns transferable Ultimate Rewards points is the first card that I suggest for almost anyone who wants to start saving big money on travel.

There are 3 Chase Sapphire cards that earn transferable Ultimate Rewards points.

Each of these cards have different bonus categories.  For example, the Chase Sapphire Reserve card earns 3 points per dollar on purchases at restaurants and on travel.  Obviously if I am making a purchase in a bonus category, I am going to want to use that card.  But for non-category spending, each of these cards earn 1 point per dollar on non-category bonus spend.

After you’ve opened one of the above Chase Sapphire cards, opening a Chase Freedom Unlimited® may be your next best move. It will increase your Ultimate Rewards earnings on non-category bonus spending.  I’ll explain how this works.

The Chase Freedom Unlimited credit card

The Chase Freedom Unlimited® credit card is a cash back card.  I know I usually discourage cash back cards for beginners.  But hear me out.

5 reasons to open the Chase Freedom Unlimited credit card if you have a Chase Sapphire card

1. There is no annual fee on the Chase Freedom Unlimited card

There is no annual fee on the Chase Freedom Unlimited® card. This is great because you can keep it open year after year to help with the credit history aspect of your credit score.

2. The minimum spend to earn the sign up bonus is low

The current sign up bonus on the Chase Freedom Unlimited® credit card isn’t great.  It’s only $150 (or 15,000 Ultimate Rewards points-but more on that later). But the  minimum spend is only $500 in the first 3 months.

3. Earn more points on non-category everyday spending than you do with Chase Sapphire cards

There are no bonus categories on the Chase Freedom Unlimited, but you earn 1.5 points per dollar on all purchases.  This makes it an ideal everyday spending replacement for the SPG Amex, but only if you have a Chase Sapphire card that earns transferable Ultimate Rewards points.

4. You can redeem points through the Chase Ultimate Rewards Redemption portal, but you can also use the cash back for non-travel purchases.

You can redeem your points through the Chase Ultimate Rewards redemption portal at a rate of 1 cent per point.

You do not have to redeem your points for travel, though. You can use your cash back however you want.

5. If you also have a Chase Sapphire card, you can transfer points earned from the Chase Freedom Unlimited to airline and hotel partners, plus your points become more valuable if you use the redemption portal.

The option to transfer points to partners is a huge advantage because that’s the best way to get more value out of your points.  If you only have cash back points, your redemption value is always going to be a fixed rate.

Points earned from Chase Freedom Unlimited are only transferable if you also have a Chase Sapphire card that earns transferable Ultimate Rewards points

The Chase Freedom Unlimited earns 1.5% cash back on every purchase.  If you only want to earn cash back, there are other no-annual fee credit cards that earn more such as the Citi® Double Cash card which earns 2%. For that reason, I only recommend the Chase Freedom Unlimited if you also have a Chase Sapphire Card.

If you have a Chase Sapphire Preferred, Chase Sapphire Reserve, or Chase Ink Business card, you can add points earned from the Chase Freedom Unlimited card to your pool of Ultimate Rewards points for whichever Sapphire Card you have.  Those points are then redeemable the same way your points for whichever card you hold are.

This means that you can transfer points you earn from the Chase Freedom Unlimited to transfer partners at a 1:1 ratio.

grand hyatt kauai

Earn a free stay at the Grand Hyatt Kauai. Transferring to Hyatt rather than using points as cash is almost always going to be a better value!

If you have a Chase Freedom Unlimited plus a Chase Sapphire card, your overall return on non-category bonus spending increases

Chase Freedom Unlimited earns more points per dollar on non-category purchases

Since the earn rate is 1.5 points per dollar on non-category bonus purchases, you are earning 50% more points than with the 3 Chase Sapphire cards which earn 1 point per dollar.

If you spend $20,000 per year on non-category purchases:

  • Chase Sapphire Preferred®: 1 point per dollar x 20,000=20,000 Ultimate Rewards points
  • Chase Ink Business Preferred: 1 point per dollar x 20,000=20,000 Ultimate Rewards points
  • Chase Sapphire Reserve: 1 point per dollar  x 20,000=20,000 Ultimate Rewards points
  • Chase Freedom Unlimited: 1.5 points per dollar x 20,000=30,000 Ultimate Rewards points

That extra half point per dollar could add up to a trip to Hawaii!

Redeeming Chase Unlimited Rewards points earned from Chase Freedom Unlimited

The two options that provide the most value for booking travel with Chase Ultimate Rewards points are:

  1. Transfer Ultimate Rewards to airline and/or hotel loyalty programs at a 1:1 ratio.
  2. Use the Chase Ultimate Rewards redemption portal. This is basically using your points as cash to book through their portal.  The redemption values are going to depend on which Chase Sapphire card you have.

Again, these examples are only possible if you have a Chase Sapphire Preferred, Chase Sapphire Reserve, or Chase Ink Business Preferred card in addition to your Chase Freedom Unlimited card. The only way to redeem points from Chase Freedom Unlimited card by itself is going to be as cash back (1.5%).

Using the 30,000 Ultimate Rewards points earned from $20,000 in non-category bonus spending:

Option 1: Transfer to hotel or airline programs

Chase Ultimate Rewards has 9 airline partners and 4 hotel partners.

Chase Ultimate Reward Transfer Partners July 2018

chase ultimate rewards hotel transfer partners 2018, book with ultimate rewards

    For example, Ultimate Rewards points can be transferred to World of Hyatt.  Then you can use World of Hyatt for free Hyatt nights.

    Hyatt category 4 properties cost 15,000 Hyatt points per night.  The Andaz Costa Rica at Peninsula Papagayo is a Hyatt category 4 hotel.  On our recent trip, the lowest rate available was over $600 per night after taxes and fees, but I will use $600 to keep this simple:

    • 2 nights at 15,000 each=30,000 Hyatt points needed. I can transfer 30,000 Ultimate Rewards to Hyatt.
    • 2 nights at $600 each=$1200
    • Remember that total spend to get the 30,000 points was $20,000
    • $1200/$20000=0.06
    • 0.06 X 100=6%

    Thats a 6% return on your spending!!!

    Andaz Costa Rica chase freedom unlimited

    Andaz Costa Rica

    Option 2: Use the 30,000 points earned from the Chase Freedom Unlimited in the Ultimate Rewards redemption portal

    Here are the redemption values if you use the 30,000 points from the Chase Freedom Unlimited in the Ultimate Rewards redemption portal.  Remember, this is only possible if you also have a Chase Sapphire card.

    Chase Sapphire Preferred® plus Chase Freedom Unlimited®
    • If you have the Chase Sapphire Preferred® card, you can redeem at a rate of  1.25 cents per point in the redemption portal.
    • With Chase Freedom Unlimited, remember you have 30,000 points from $20k spend.
    • If you redeem 30,000 points in the portal, they’re worth $375 (1.25 cents per point x 30,000=$375.00)

    Return on $20k spend is ~1.88%

    Chase Ink Business Preferred plus Chase Freedom Unlimited®
    • If you have the Chase Ink business Preferred® card, you can redeem at a rate of  1.25 cents per point in the redemption portal.
    • With Chase Freedom Unlimited, remember you have 30,000 points from $20k spend.
    • If you redeem 30,000 points in the portal, they’re worth $375 (1.25 cents per point x 30,000=$375.00)

    Return on $20k spend is ~1.88%

    Chase Sapphire Reserve plus Chase Freedom Unlimited®
    • If you have the Chase Sapphire Reserve card, you can redeem at a rate of  1.50 cents per point in the redemption portal.
    • With Chase Freedom Unlimited, remember you have 30,000 points from $20k spend.
    • If you redeem 30,000 points in the portal, they’re worth $450 (1.50 cents per point x 30,000=$450.00)

    Return on $20k spend is 2.25%

    Summary

    You will earn 1.88% or 2.25% back on your spending when you redeem Ultimate Rewards earned from the Chase Freedom Unlimited through the redemption portal.  This is better than the return rates of the Chase Sapphire cards.

    • Chase Sapphire Preferred®: 1.25%
    • Chase Ink Business Preferred: 1.25%
    • Chase Sapphire Reserve: 1.50%

    In many situations, you can get even more value out of Chase Ultimate Rewards points by transfering them to airline and hotel loyalty programs.  In the Hyatt example, the return rate was 6%.  Learning how to use airline transfer partners is a great way to make your Chase Ultimate Rewards stretch further, but even if you only use Chase Ultimate Rewards as cash back, the Chase Freedom Unlimited helps you earn more!

    Andaz Maui

    Chase 5/24 considerations

    Are Chase Sapphire and Chase Freedom Unlimited ® credit cards subject to Chase 5/24*?

    *If you do not know what I am talking about, read this post about Chase’s 5/24 policy. 

    Yes.  All of these cards are subject to the 5/24 policy.  That is one of the main reasons I encourage these cards over Amex Membership Rewards cards for beginners.  You can open Amex cards after you reach 5/24, but you cannot open the Chase cards that earn Ultimate Rewards once you’re over 5/24.  It is important to plan your applications wisely.

    I am under 5/24.  Can I open a Chase Sapphire and a Chase Freedom Unlimited credit card at the same time?

    While you can have these cards at the same time, I do not recommend trying to open them at the same time.

    A couple years ago, I would have said yes.  But now my advice is to space out your Chase applications if you plan to open multiple cards.  This applies to any Chase card, not just the cards discussed in this post!  Chase has been known to flag or even shut down people who open too many accounts too quickly.  This is a marathon, not a sprint!

    Final Thoughts

    The best credit cards for you depend on your travel goals and spending habits.  I personally love finding sweet spots in airline and hotel programs.  But I understand that not everyone has the time to learn about multiple reward currencies and transfer partners.  If you want to simplify things while still having the option to transfer your points, Chase Ultimate Rewards is a great program. 

    If you do not have an Ultimate Rewards earning card such as a Chase Sapphire Preferred, I suggest starting with that.  Then if you want to boost your earnings, consider adding a Chase Freedom Unlimited.

    Chase Freedom Unlimited®
    • Bonus: $150 
    • Minimum spend for bonus: $500 in 3 Months
    • Annual Fee: $0
    • Bonus Categories: None, but earn rate is 1.5 on everything!
    Chase Sapphire Preferred® Card
    • Bonus: 50,000 Ultimate Rewards points
    • Minimum spend for bonus: $4,000 in 3 Months
    • Annual Fee: $95, but waived the first year
    • Bonus Categories: 2 points per dollar on travel and dining

     

     

     

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