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The Chase Freedom Credit Card is often mentioned in various blog posts around the web as one of the best rewards credit cards available. While this is definitely true, knowing about the following two issues will make you a smarter user of the Freedom Card:

  • While Chase advertises that you can receive 5% cash back on certain seasonal categories, the fine print puts some limitations on these earnings.
  • You can earn significantly more points by linking your Chase Freedom card to a Chase checking account.

Point Earning Limitations on the 5% Bonus Cash Back Categories

The Chase Freedom card offers a base 1% cash back on virtually all card spend, and an additional 4% cash back bonus on certain seasonal spending categories which change each quarter.   The catch here is that the Chase Freedom card restricts you to a maximum of $1,500 of spend in these bonus categories each quarter. Once you hit that cap, any additional spend in these bonus categories will only earn you the standard 1% cash back.

Let’s take an example: For Jan-Mar of 2011, the bonus categories are supermarkets and drug stores. Let’s say you spend $2,500 during this quarter on these 2 categories, and another $500 on restaurants. You would earn a total of $90 in rewards. Here’s how it breaks down:

  1. On your combined $2,500 supermarket and drugstore spend, you’d earn a base 1% bonus, for a total of $25; you’d also earn another 4% on the first $1,500 of spend, for another $60.
  2. On your restaurant purchases of $500, you’d earn another $5 cash back.
  3. Thus, your total earnings would be $90. Note that without the $1,500 spend cap, you would have earned $130 instead of $90.

So, my advice to you: use the Chase Freedom card each quarter in a very targeted fashion on the categories that earn the bonus 4%, and once you hit your spend cap, switch to a different card that pays more than 1% cash back, such as the excellent Discover Escape card.

Earnings More Points by Also Opening A Chase Checking Account

This is a little known, but powerful, fact. If you open a Chase checking account, and link it to your Chase Freedom credit card (you can do this at any chase branch), you acquire 2 additional methods to earn rewards:

  1. Earn an additional 10% bonus on your base 1% cash back bonus (for a total bonus of 1.1%)
  2. Earn an additional 10 points on every purchase.

Let’s look at another example. Let’s assume you spend $1,000 on your Chase Freedom card in a certain month (let’s assume they were all made in bonus categories), and in the process, make 30 transactions on it. You would earn 1,000 base points, plus another 4,000 bonus category points, for a total of 5,000 points. Now, if you had linked to a Chase checking account, you would earn another 100 points (the 10% bonus) as well as another 300 points (10 points per purchases times 30 purchases). Thus, you increased your total bonus from 5,000 to 5,400-almost a 10% bump in your rewards!

2 Little-Known Facts About the Chase Freedom Card That Will Make You Smarter

2 Little-Known Facts About the Chase Freedom Card That Will Make You Smarter