The best part? Chase Freedom is one the best cash back credit cards available. You’re not signing up for a garbage credit card just to get some cash back. Let’s look at how it works and why this is a card that you should consider having even if they didn’t offer $200 in bonus cash.
$100 in Free Bonus Cash with Chase Freedom
You’re probably thinking something like this:
So a credit card company wants to give me some “free” money? Yea… right. What’s the catch?
That’s understandable. Credit card companies have the stigma of preying on the uneducated or those in a financial bind. While certainly part of that is true, it really isn’t all bad if you use credit cards wisely. (Paying interest would easily wipe out the bonus cash back pretty quickly… so don’t carry a balance.)
Technically, yes. But it is so small that it shouldn’t even matter for most people.
When you sign up for a Chase Freedom® Visa or Chase Freedom® MasterCard you will get a free $200 in bonus cash when you spend $500 on the card at any time in the first three months of having the card.
So there is a catch: you need to spend $500 on the card. But that’s only $167 per month if you stretch it out over 3 months. For most people that is at least what you would normally spend on groceries. (Just make sure you get your $500 in spending in the first 3 months one way or another.)
Even better: you won’t be spending any money on an annual fee. (That is one of the worst catches in the credit card universe.)
You’ll miss out on the $100 in bonus cash. That would be unfortunate, but you’ll still get a great card with an excellent cash back program.
Earn 5% Cash Back with Chase Freedom
Both editions of Chase Freedom come with 5% cash back in certain spending categories. The categories rotate every quarter (every 3 months of the year). For 2012, the quarterly categories are:
- January – March: Amazon.com, gas stations
- April – June: Grocery stories, movie theaters
- July – September: Gas stations, restaurants
- October – December: Hotels, airlines, Best Buy, Kohls
While you don’t get 5% cash back on everything (a common misconception with 5% cash back credit cards) these are some great categories. Everyone buys gas and groceries. (And if you’re like me, 5% cash back on Amazon spending is awesome!)
Note: Your 5% cash back is only applicable up to the first $1,500 of category spending each quarter. 5% of $1,500 is $75. So in the second quarter you could spend $50 at the movie theater and $1,450 at the grocery store and still get $75 back in 5% cash back. (If you max out your 5% cash back for all four quarters of the year, you’ll generate $300 in cash back. Not half a bad pay day for your normal, everyday spending!)
1% Cash Back on Everything Else
A majority of cash back credit cards give 1% on all of your spending. Sometimes that 1% is given in points for hotels or miles for airlines, but the ending percentage is usually around 1%. The same is true with Chase Freedom. On your spending that doesn’t fall into the 5% category, you’ll still earn 1% back.
And this cash back is unlimited. You can swipe as much onto the card as you want and you will always get 1% in cash back.
Access to Blueprint
Another perk of a Chase Freedom® Visa or Chase Freedom® MasterCard is you will get access to Chase’s financial software Blueprint. We’ve done a review of Blueprint in the past. Blueprint gives you multiple options to help cut down on your interest charges and pay off your balance faster. You can’t run a budget on Blueprint, but it is a nice added benefit for cardholders.
Risk of Credit Card Bonuses
Signing up for a credit card just to get a credit card bonus probably isn’t worth it. However, getting a great cash back credit card plus a free $200? That’s a win in my book.
However, the one risk is that you end up charging more than you would have otherwise as you seek that $500 spending needed just to get the $200 in cash back. Or that you’ll make extra trips to the grocery store just to get that 5% cash back.
The easiest way to avoid overspending on credit cards — for any reason — is to simply use the credit card like a debit card. Your spending is based off of your budget and you don’t pack in extra purchases just for a little extra bonus cash back. (Remember, 5% cash back means you overspent by 95% if you buy things you don’t really need!)