Chase Freedom Unlimited Review – $200 Cash Bonus + 5% Back on Groceries (Up to $600 Cash Back in First Year)

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Updated. The Chase Freedom Unlimited Card is a no-annual-fee rewards card which earns a flat 1.5% cash back on all purchases (or a possibly more valuable 1.5 Ultimate Rewards points per dollar spent). This is a different card from the new Chase Freedom Flex, which has 5% cash back on rotating categories, on up to $1,500 in purchases each quarter. Right now, this card has a higher-yet-attainable limited-time offer:

  • $200 cash bonus (20,000 Ultimate Rewards points) after $500 in purchases in your first 3 months.
  • 5X point (5% cash back) on grocery store purchases (not including Target(R) or Walmart(R) purchases) on up to $12,000 spent in the first year. That’s up to $600 cash back the first year (and you can buy many gift cards at grocery stores).
  • 5X points (5% cash back) on travel purchased through the Chase Ultimate Rewards portal.
  • 3X points (5% cash back) on dining out, take-out, and eligible delivery services.
  • 3X points (3% cash back) on drugstore purchases.
  • Earn unlimited 1.5% cash back on all purchases. Redeem for cash – any amount, anytime.
  • Earn 5% cash back on Lyft rides through March 2022. That’s 3.5% cash back in addition to the 1.5% cash back you already earn.
  • Cash back does not expire as long as your card is open.
  • 0% Intro APR for 15 months on purchases.
  • No annual fee.

1.5% cash back on all purchases is better than the 1% cash back you see from a lot of cards, but there are competitors with higher effective cash back rates.

But wait, you actually get Ultimate Rewards Points! The lesser-known perk of this card is that you actually earn Ultimate Rewards points, which are in turn redeemable for cash back at a rate of 100 points = $1 in cash back, or 1 cent per point. But you don’t have to do that. Ultimate Rewards points are worth collecting because of their flexibility. (I hope Chase doesn’t forget this fact.) This is important because there are many ways in which Ultimate Rewards points can be worth much more than 1 cent per point.

If you have also have the Chase Sapphire Preferred, Chase Sapphire Reserve, or Ink Business Preferred Card, then you can pool all of your Ultimate Rewards points together (even with your spouse/partner as an authorized user) and thus utilize all of the same transfer partners with the following results:

  • Earn 1.5 United Mileageplus miles per dollar spent on ALL purchases.
  • Earn 1.5 Hyatt points per dollar spent on ALL purchases.
  • Earn 1.5 British Airways Avios per dollar spent on ALL purchases.
  • Earn 1.5 Southwest Rapid Rewards points per dollar spent on ALL purchases.

Notice that you are earning more miles and points on ALL purchases than even the specific co-branded cards from United or Hyatt themselves! Most of them just offer 1 point/mile per dollar spent on all purchases.

If you placed a perceived value of 1.5 cents on each United Airlines mile or Hyatt hotel point, then you’d receive 2.25 cents of perceived value per dollar spent with this card. Your actual numbers will depend on your own specific redemption choices, but you can see that you can definitely exceed 2% cash back value on an ongoing basis with the Sapphire Preferred/Freedom Unlimited combo.

With the Sapphire Reserve, you can also redeem for travel through the Ultimate Rewards portal at 1.5 cents per point value, which means 20,000 Ultimate Rewards points = $300 towards airfare, hotel, car rentals booked through Ultimate Rewards. 5% cash back on groceries turns into 7.5% potential value back, and so on.

If you would like the opportunity to earn 5% cash back on rotating bonus categories each quarter, compare with the Chase Freedom Flex card. You can have both a Freedom and a Freedom Unlimited card, but you’ll have to apply for each card separately. I think this is actually a great combo if you plan to keep a Sapphire Preferred/Sapphire Reserve/Ink Preferred cards as well.

Restrictions. This card is subject to “5/24” restrictions, which means that your application will be automatically denied if you have opened 5 or more credit cards in the last 24 months (check your credit reports). Our household strategy is to have one person only apply for Chase 5/24 cards, and the other person applies for everything else. There is also this language on the consumer card:

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.

Bottom line. The Chase Freedom Unlimited is a unique card that works best in combination with either the Chase Sapphire Preferred, Sapphire Reserve, or Ink Preferred Business cards. The combination of earning 1.5 Ultimate Rewards points per dollar spent on all purchases plus the unique redemption options from those other cards can create a value exceeding that of 2% cash back. You also get 3X points on dining out and drugstore purchases.

Right now, there is a limited-time offer for $200 cash back with a relatively low $500 in purchases, in addition to 5% cash back on grocery store purchases (not including Target or Walmart) on up to $12,000 spent in the first year. That’s up to $600 in cash back in the first year if you spend a lot on groceries these days.

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Comments

  1. Buzzkill. Chase has a 5/24 rule (no more than 5 credit card applications in the last 24 months, all issuers). I’ve run into this issue with CFU and I imagine a few others might too.

  2. I currently have the Chase Freedom. I wonder if I can switch to the Ultimate and still get the $150 bonus.

    • You could always ask Chase (worse they could say is no), but usually the sign-up bonus is not available to cardholders switching card types.

      • I called Chase last night and asked this very question! Chase confirmed you can do this, but you will be signing up for an additional line of credit. So instead of just “upgrading” to the Freedom Unlimited card, you should apply for the new Freedom Unlimited card outright, and if you accept the terms and meet the qualifying criteria, you will get the $150 bonus. Just note, if you plan to make the upgrade and no longer want to keep your original Freedom Card, you cannot transfer balances from Chase to Chase (Freedom Card to Unlimited Freedom Card). Happy hunting!

        • So what I am hearing is that you are not in fact “upgrading” your Freedom to the Freedom Unlimited (no new credit check), but are instead getting a brand new, separate Freedom Unlimited card (with new credit check) and thus getting the big sign-up bonus.

          • Correct. Although they WILL upgrade you without checking your credit , but you would be ineligible for the $150 sign-on bonus. They suggested keeping both cards (of course) and leveraging the point systems based on that card’s individual rewards as mentioned in the original article above. So, as always, there is a catch to getting free money.

          • Good to know you have the option of either converting w/o sign-up bonus or applying for an additional card w/ sign-up bonus. Thanks!

  3. Even if you don’t have the Sapphire Preferred card yourself, you can transfer the points to your spouse’s account, if they have one.

  4. If you combine the UR points earned with the regular Freedom card with those in the Chase Ink Plus, will the UR Freedom points value 20% more for travel also?

  5. I don’t know if this card would be right for me. I have a few different credit cards that rotate cash back benefits each quarter. The main benefit of the regular cash back card is that I get a rotating 5% each quarter that makes it more attractive than the few other cards I have. So I don’t know if a flat 1.5 cash back would move the needle for me and provide a benefit greater than the other points I earn.
    That being said, I can easily how a flat 1.5% cash would be appealing to those who do not have multiple cards or do not want to deal with rotating cards and having to think about which card is best at the point of purchase.

    Thanks for taking the time to put this review together!

    Bert, One of the Dividend Diplomats

    • This quarter I’m getting 5% back on groceries with my regular Chase Freedom card and that’s looking mighty good.

  6. When I first saw this, I saw it as an obvious mimic of the Capital One QuickSilver card. However, I am pleasantly surprised that it earns Ultimate Rewards, like the regular Chase Freedom cards.

    Then again, with Capital One, I can configure the account to automatically redeem rewards as a statement credit. I can’t do that with Chase. I have to manually redeem rewards as a statement credit.

    • IMHO, Capital One QuickSilver has 1 advantage over the new Chase Freedom Unlimited; Quicksilver has No Foreign Transaction fees (Chase has 3% fee) for purchases outside US. Everything else is the same so far.

  7. During the pandemic, Chase is letting folks redeem points on their Reserve card with the 50% bonus value (usually just for travel) as a statement credit against grocery and home improvement purchases.

    That really boosts the value, especially since you can transfer the points to the Reserve for that bonus redemption from other cards (like the Freedom).

    Good time to upgrade a Freedom to a Reserve to get that bonus and get “free” groceries for a few months while clearing out your point balance. We’re not traveling much lately! 😉

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