Maximizing Chase Freedom 5x Categories & Important 5x Reminders

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Today I wanted to share not only a reminder about the current 5x categories for the Chase Freedom, but also a look ahead to the last quarter of the year and the new 5x bonus categories that will come along with it.  Of course, many who have the Chase Freedom Visa know that the card is just the tip of the Ultimate Rewards iceberg, and the card can’t be truly maximized without the Chase Sapphire Preferred Card, Ink Bold Charge Card, or Ink Plus card.  Having a Chase checking account is necessary to round out the all important “Ultimate Rewards Trifecta”.

Current 5x Bonus:

The way the Freedom 5x bonus works is that it is advertized as a 5% cash back bonus, but don’t let that fool you.  It can certainly be used as a 5% cash back bonus, but if you have one of the Ultimate Rewards earning cards mentioned at the beginning of this post, you can transfer the Ultimate Rewards points earned on your Freedom card to one of those accounts.  From there you can transfer them 1:1 to a number of airline and hotel partners like United, Hyatt, British Airways, Marriott, and more.  Many folks get at least 1.5 – 2 cents per point value when they redeem from those programs.  That would mean that instead of getting five cents back per dollar, you are really getting 7.5 – 10 cents in rewards value per dollar if you redeem the points strategically as hotel and airline points.  For some folks, that number goes even higher.

The current third quarter bonus (July 1 – September 30) provides 5x (or 5% cash back) at gas stations and restaurants.  The bonus is limited to $1,500 total each quarter, and the bonus must be activated each quarter to be valid.  You have until September 14th to activate the bonus for the third quarter.  If you do it in time, it is retroactive to the beginning of the quarter.  If you don’t activate it by the deadline, then you do not receive the bonus points.  If you wish, Chase will send you emails or text messages each quarter to help remind you to activate the bonus.  While it is a little work to activate the bonus, they really make the process quite simple.

In addition to making sure that you have activated the 3rd quarter bonus, it is also a good time to do some math to see how close you are to the $1,500 5x limit.  I have other cards that pay me more than the standard 1x for restaurants and gas stations, so it doesn’t serve me well to continue to put those charges on the Freedom after hitting the$1,500 quarterly limit for the 5x bonus.  Unfortunately looking at the bonus points on each statement isn’t a reliable way to calculate how close you are since transactions made near the end of the billing cycle often don’t have their bonus points post until the next month.

You can do this by manually going through each statement since the July 1 start date and add up each purchase from a restaurant or gas station (assuming all the purchases are categorized accurately), or you can use Chase Blueprint to give you a quick overview without manually adding dozens of purchases.  Read this post for details on how to use Blueprint for this purpose.  While it would be nice to have the total displayed for you, using Blueprint really simplifies the process.

If you find that you still have a ways to go to hit the $1,500 limit, you could consider getting some gift cards to your favorite restaurants or at gas stations.  There is always a slight risk that those transactions may be coded differently, and thus won’t qualify for the 5x, but they often will work just fine.

Upcoming 5x on hotels, airlines, Best Buy, and Kohl’s:

The final quarter of 2012 brings us some really solid 5x bonus categories.  My only complaint is the $1,500 limit!  Who knows what will happen this year, but last year Best Buy was available for 10x via the Ultimate Rewards shopping portal for Black Friday shopping.  Stacking 5x on top of that would mean 15x for those purchases made via the Ultimate Rewards shopping portal.  Depending on how you redeem your UR points, that could mean essentially 30% rebate in value on already drastically reduced Black Friday prices.  Kohl’s is also often at 10x in the Ultimate Rewards portal, so that would be another opportunity for a total of 15x on purchases made through the portal.

There is also some strategy in place in terms of getting 5x on hotel and airline purchases in the last quarter of the year.  Below is some information taken from the Chase site that should clear up some info on which hotel airline purchases count for 5x.

Hotels category
Merchants in the hotel category include hotels and motels and many smaller establishments like bed & breakfasts, and inns. Hotel accommodations not booked directly with the hotel will not qualify; for example, hotel accommodations purchased through travel agencies, discount travel sites (for example, Expedia® and Yahoo® travel), vacation clubs, tour operators, or as part of a package offered by merchants such as cruise lines and railways. Please keep in mind that hotels usually do not bill your card until your stay.

Airlines category
Purchases with the airline other than tickets, such as in-flight purchases, and purchases within the airport will not qualify. Airline tickets not booked directly with the airline will also not qualify; for example, accommodations purchased through travel agencies, discount travel sites (for example, Expedia® and Yahoo® travel), vacation clubs, tour operators, or as part of a package offered by merchants such as cruise lines and railways.

Essentially the 5x will only work for hotel and airline expenses charged directly by the hotel or airline, and not via a third-party booking engine like Expedia.  It also stipulates that only airline tickets will qualify and not incidental expenses like on-board food, baggage fees, etc.  So, if you want to take advantage of the 5x fourth quarter bonuses from October 1 – December 31, just keep some of those details in mind.

I’ve finished out the 3rd quarter bonuses, but am looking forward to activating and utilizing the 4th quarter bonuses in the near future!

 

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Comments

  1. If you collect points via Chase Freedom, is it okay to make repeated transfers into one of your Ultimate Rewards accounts (to secure the points), or does it make more sense to wait and do a smaller number of larger transfers? Any fees involved, or any reason that Chase would get upset seeing a lot of transfers?

  2. Also, I think many Kohl’s discounts (they’re the store of perpetual sales) are tied to using their credit card. When does it make more sense to use a Chase rewards card?

  3. @Singapore Flyer, I think some will have to run experiments and see how things work “in reality”. 😉
    @LarryinNYC, I can’t see why it would matter if you are moving within your own accounts. No fees involved, and as long as it is your own accounts I can’t imagine that Chase would care – just my guess. As far as Kohl’s go, some sales are tied to that card. I don’t shop there a ton so I don’t have a bunch of experience to draw on there. As always, you need to compare to see what makes the most sense. It will depend how large the discount is and how highly you value UR points.
    @Dave, they are big on sales for sure! As always, deals aren’t good if you weren’t going to buy something there anyway. Perhaps the airline and hotel 5x deals will better suit your needs. 😉

    • @Lively, thanks. 😉
      @Don T, according to the terms, going through a third party (such as Travelocity via the UR portal wouldn’t work). However, if you go via the portal through to the direct site (such as with some SPG or IHG hotels) then it should still be fine since your reservation and bill will be with the hotels directly.

  4. @Mommypoints, what about the UR travel site itself, without going through, for example Travelocity? And I don’t mean a direct UR mall link to say SWA.

  5. But I believe last year I booked a flight from Expedia and they did give me 5x bonus ultimate reward points. Is that not the case anymore?

    • I am not sure how the UR travel thing will work out with the 5x. I have never used it myself. Vivian, the terms vs how it works in reality can vary. So, it is possible that will work, but their terms do indicate otherwise.

  6. MP. I just got the Freedom card, and I usually use my Sapphire for every day purchases. During this promotion, is there any reason NOT to use the Freedom card? I’m guessing I should use it for restaurants under $10 in October too since I’ll get the extra 10 points per transaction? Thanks!!

    • No, if it is the card that makes the most sense for you on a given purchase keep using it! If you have the checking then the sub-$10 charges make total sense at restaurants and other stores.

  7. @Ken, yes, some gas stations sell quite a variety of gift cards. My local one sells for Sears, Home Depot, etc. etc. I have bought gift cards there using the Chase freedom card, and it does it does earn the points. Since it costs me about $50 to fill up my gas tank, I am going to top off my Chase freedom account by simply buying gift cards at the gas station to the gas station towards the end of this month.

  8. Help me some math. Does the 5x bonus make it worthwhile to put spend from international hotels on the Freedom card instead of the Sapphire? Freedom’s international transaction fee is 3%.

    • Gotta love gas stations that sell gift cards. 😉
      As far as paying 3% for 5x…..it depends. Are you sure you won’t be able to hit the $1,500 limit with some spending here at home? If so, I would not put the hotels overseas on the Freedom. If that is the only way you will have spending that hits $1,500 (of course you don’t actually have to hit $1,500), then it may be worth it if you value UR really highly it could be worth it….I just really hate paying fees to earn points.

  9. I think I found the answer to my question, if you’re interested from Chase:

    “Q. Where else can I earn 5% cash back on airline tickets and hotel rooms?
    A. You can also earn 5% cash back on airline tickets and hotel rooms booked through Ultimate Rewards, on up to $1,500 in purchases, including all other categories this quarter. That’s a total of 6% cash back on airline tickets and hotel rooms booked through Ultimate Rewards.”

  10. Re: “LarryInNYC says:

    Also, I think many Kohl’s discounts (they’re the store of perpetual sales) are tied to using their credit card. When does it make more sense to use a Chase rewards card”
    As long as you put some amount on your Kohl’s credit card (say $5) then the Kohl’s 15%, 20% or 30% discount still works – then put the remainder on your Freedom card for the 5% UR points.

  11. Did Chase discontinue the 10% bonus using the Freedom card and having a Chase checking account all the links I have tried are dead ends?

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