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August 19, 2020
Courtesy of Chase

There are basically two kinds of cash back credit cards. There are the ones that offer 1% cash back on most purchases, plus bonus cash back (often 5%) for select types of purchases. Then there are cards that offer more than 1% back on all of your purchases, but have no special bonus cash back offers.

The Chase Freedom Unlimited largely fits into the second category of cards, with 1.5% cash back on all purchases. But a new limited time offer gives you a way to also earn a fantastic bonus cash back on one of your most common purchases. In addition to 1.5% back on most purchases, you’ll get 5% cash back on groceries for 12 months. New cardholders can get an easy welcome bonus of $200 cash back to boot.

Does this card makes sense for you? Well, for what it’s worth, I’ve been studying credit cards and writing about them since 2008, and I’ve held dozens of accounts. And this is the card I use for the vast majority of my purchases nowadays.

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Key Terms: Chase Freedom Unlimited

  • Welcome Bonus: Earn $200 in cash back after spending $500 on new purchases within three months of account opening.
  • Rewards: 1.5% cash back on all purchases, plus 5% cash back on your first $12,000 spent at grocery stores within 12 months of account opening.
  • Annual Fee: $0
  • APR: 14.99%–23.74%
  • Promotional Financing Offer: 15 months of 0% APR financing on new purchases.

How Chase Freedom Unlimited Rewards Work

Unlike the standard Chase Freedom, which offers limited amounts of 5% cash back on specific purchases in rotating categories and 1% back elsewhere, the Freedom Unlimited offers 1.5% cash back on everything you buy with the card. What’s more, a new offer includes 5% cash back on your first $12,000 spent at grocery stores within 12 months of account opening. New applicants also receive 15 months of 0% APR financing on new purchases.

This card’s cash back come in the form of Chase Ultimate Rewards points, which can be redeemed for not just cash back, but also for travel, merchandise and gift cards. If you also hold another Chase card like the Sapphire Reserve, Sapphire Preferred on Ink Business Preferred, then you can combine your points with the ones from those accounts, and transfer them to airline miles or hotel points.

Other features include purchase protection and extended warranty coverage. You also earn 5% cash back on Lyft rides through March 2022, and get a complimentary three months of DashPass, DoorDash’s subscription service that provides unlimited deliveries for a $0 delivery fee on eligible orders over $12.

There’s no annual fee for this card.

Advantages

The Chase Freedom Unlimited would be worth getting with just for its $200 welcome bonus, which is easy to earn assuming you’ll spend over $500 on the card in the first three months. But you have the potential to earn several times that with the new 5% offer for groceries that valid during your first year. Its valuable promotional financing offer allows you to extend payment on your new purchases for up to 15 months, without incurring interest charges.

Otherwise, this card is best for those who just want to use a single card for all or most of their purchases while enjoying a strong rate of return. This card especially makes sense for those who want to complement one of their other Chase premium reward cards.

Disadvantages

While 1.5% cash back is a strong rate of return, there are some cards that feature flat rewards as much as 2%. Also, this card has a foreign transaction fee of 3%, while many cards have no such fees. Like most reward cards, the Chase Freedom Unlimited has a higher standard interest rate than similar cards that don’t offer rewards. If you need to carry a balance, you should look for a non-rewards card with the lowest available standard interest rate.

Best Cash Back Credit Cards: More Options

Citi Double Cash: This Citi card offers you cash back instead of rewards points, and is a very simple card to use. It offers 1% cash back at the time of purchase, and another 1% back when you pay for your purchases, for a total of up to 2% cash back with no limits. It features 18 months of 0% APR financing on both new purchases and balance transfers, with a 3% balance transfer fee. There’s no annual fee for this card, but there’s also no welcome bonus.

Citi Rewards+. This card offers you double points at grocery stores and gas stations, but only on your first $6,000 in combined purchases each year. All other purchases earn one point per dollar spent. Citi will round up the points you earned to the nearest 10 points, and you receive 10% of your redeemed points back. As a welcome bonus, new cardholders can get 15,000 points after spending $1,000 within three months of account opening, and 15 months of 0% APR financing on both new purchases and balance transfers, with a 3% balance transfer fee. There’s no annual fee for this card.

PenFed Power Cash Rewards: This card offers 1.5% cash back on all purchases, and you’ll get 2% if you are a PenFed Honors Advantage Member — which you can become by opening a free checking account. New applicants receive a $100 statement credit after using their card to spend $1,500 within 90 days of account opening. There’s no annual fee for this card.

Bottom Line: Is the Chase Freedom Unlimited Worth It?

The Chase Freedom Unlimited was already a popular rewards card, but Chase is clearly trying to attract new customers that also want bonus cash back for some purchases. By offering 5% back on groceries for a year, and competitive rate of cash back on all other purchases, the Freedom Unlimited becomes one of the best no-fee cash back credit cards you’ll find in 2020.

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