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Chase recently launched the new Freedom Unlimited credit card at the same time that it offers the original Freedom card. Which is better?

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First I’ll compare the cards for potential new applicants. I’ll break down the comparison by:

  • value of points
  • sign up bonus
  • everyday spending & category bonuses
  • annual fee

Then I’ll answer what types of people should keep one or the other.

Value of Points

The Chase Freedom and Freedom Unlimited earn Ultimate Rewards. Both cards earn points that can be redeemed at a rate of 1 cent each– that’s why all the marketing of the card features cash back language. BUT if you have a Chase Sapphire Preferred or Ink Plus card, there is a second way of redeeming the Freedom or Freedom Unlimited’s Ultimate Rewards: transfer them to your Sapphire Preferred or Ink Plus account and from there to airline miles or hotel points. I call this the Freedom Two Step.

Freedom Two Step

Facts:

  • Ultimate Rewards earned on the Freedom and Freedom Unlimited do not transfer to airlines or hotels.
  • Ultimate Rewards earned on the Sapphire Preferred and Ink Plus do transfer to airline miles and hotel points with partners like United, Korean, British Airways, Singapore, Hyatt, Southwest, and many more.
  • Ultimate Rewards earned on the Freedom and Freedom Unlimited can be transferred to your or your spouse’s Ink Plus or Sapphire Preferred account.

Combine these facts and you get the Freedom Two Step. You transfer Ultimate Rewards from Freedom or Freedom Unlimited to Sapphire Preferred or Ink Plus, and from there to airlines and hotels.

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I value several of the transfer partners’ miles in the 1.6 to 1.8 cent range, so the Freedom Two Step should allow you to get far more than 1 cent of value from those same Ultimate Rewards.

Once your Ultimate Rewards are transferred to airline miles, they become those miles, subject to that airline’s award chart and rules. And if you know how to use frequent flyer miles well, you will get way more than 1 cent of value from them.

Check out my full post on the Freedom Two Step for more explanation, screenshots of the process, and high value awards with the partner programs.

Both cards earn the same points, so the value of points does not differ between the Freedom and Freedom Unlimited.

Sign Up Bonus

  • Both cards: 15,000 Ultimate Rewards after spending $500 in the first three months & 2,500 Ultimate Rewards for adding an authorized user

Multiply the sign up bonus by your value of the points to figure out how much each sign up bonus is worth. I value Ultimate Rewards at 2 cents each because I have an Ink Plus to do the Freedom Two Step.

To me, 17,500 Ultimate Rewards are worth $350.

Again, both cards have the same sign up bonus, so no difference here.

Category Bonuses

  • Freedom
    • Earn 5x points on first $1,500 spending per quarter in rotating categories
    • Earn 1x points on other purchases
  • Freedom Unlimited
    • Earn 1.5x points on all purchases

This is the massive difference between the two cards. The Freedom Unlimited earns a spectacular 1.5x on everything. The Freedom earns a “meh” 1x on everything except 5x on up to $1,500 per quarter. Here are the 5x categories for 2016.

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If you max out the spending for a year in bonus categories, you’d earn 30,000 Ultimate Rewards on your Freedom for $6,000 in spending. The same spending on the Freedom Unlimited would earn 9,000 Ultimate Rewards. To make up the 21,000 Ultimate Rewards shortfall, you’d need to spend another $42,000 on each card in a year.

$48,000 on Freedom Unlimited = 72,000 Ultimate Rewards
$6,000 on Freedom in 5x categories + $42,000 on Freedom at 1x = 72,000 Ultimate Rewards

That means if you only plan to have one card, and you plan to maximize category bonuses, and you spend less than $48,000 per year on your card, then the Freedom is better.

But that exact set of circumstances describes few people.

Annual Fee

Both cards have no annual fee.

Which Card is Better for New Applicants and to Keep?

They are actually the same question since the cards only differ on earning rates for ongoing spending.

The Freedom Unlimited is better if:

  • You are looking for a card to make your default card for non-bonused spending. It is the best on the market for this purpose. Through the Freedom Two Step, the card earns 1.5 United/Korean/Singapore/BA/Southwest/Hyatt miles or points per dollar. No other card comes close to that earning potential.

The Freedom is better if:

  • You don’t do much non-bonused spending. You want another card that offers big bonuses. No other personal card comes close to offering 5 United/Korean/Singapore/BA/Southwest/Hyatt miles or points per dollar on such easy categories.

Getting the Cards

While I can not directly link to the current Freedom or Freedom Unlimited offer, you may find them by clicking below if you decide to apply. (I receive a commission, and your support keeps this blog going.)

To do the Freedom Two Step, you’ll also need a Sapphire Preferred or Ink Plus. Here’s a little info on those.

The Sapphire Preferred is one of the best personal credit cards on the market. It offers:

  • 50,000 bonus Ultimate Rewards after spending $4,000 in the first three months
  • 5,000 bonus Ultimate Rewards for adding an authorized user
  • 2 Ultimate Rewards per dollar on travel and dining purchases
  • 1 Ultimate Reward per dollar on all other purchases
  • no annual fee the first year and $95 thereafter

While I can not directly link to the current Sapphire Preferred offer, you may find it by clicking below if you decide to apply. (I receive a commission, and your support keeps this blog going.)

The Ink Plus is easily the best business card on the market. It offers:

  • 60,000 bonus Ultimate Rewards after spending $5,000 in the first three months
  • 5 Ultimate Rewards per dollar at office supply stores and on cellular phone, landline, internet and cable TV services
  • 2 Ultimate Rewards per dollar at gas stations and hotel accommodations
  • 1 Ultimate Reward per dollar on all other purchases
  • $95 annual fee

While I can not directly link to the current Ink Plus offer, you may find it by clicking below if you decide to apply. (I receive a commission, and your support keeps this blog going.)

Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.

Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.

With a bonus of 80,000 points after $4,000 spend in the first 3 months and 2x points earned on dining and travel spend, this card truly cannot be beat for getting started!


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are the author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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