Which No Annual Fee Credit Card: Chase Freedom or Amex Everyday?

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At least after the first introductory year, annual fees of varying amounts are a reality for most rewards credit cards. All of those miles, points, and perks often come at an annual cost that may or may not be worth it depending on your situation. I personally have plenty of cards that charge an annual fee, but I do the math to make sure I am coming out ahead of the curve getting more out of the points and benefits than I am paying to keep them.

For example, if a card has a $95 annual fee, but you regularly take advantage of free checked bags or an annual hotel night each year that it awards then the fee can easily be offset without even calculating the value of the miles that the card earns.  For other cards where you don’t use the built-in perks or there aren’t anniversary bonuses, the decision to keep the card and pay the fee can be a tougher one.

I know plenty of people in the ‘real world’ that avoid dabbling into rewards credit cards because they don’t want to deal with annual fees.  While I think the fees on some cards are plenty worth it given what you get each year, I totally understand wanting to keep household bills and expenses to a minimum.  When someone wants a rewards credit card with no annual fee, my mind immediately jumps to two very different products.  The Chase Freedom and American Express EveryDay card.  In case you or someone you know is in the market for a rewards card that doesn’t come with an annual fee, here is a closer look at these two products.

Chase Freedom Overview:

The Chase Freedom is an annual-fee-free card that I have had in my wallet for years.  It has rotating 5x bonus categories each quarter, and expenses outside those categories earn 1x.  The points are often referred to as cash back as that is essentially how you can use the points if you don’t also have a more premium Chase card that earns transferable Ultimate Reward points.

Chase Freedom Sign-up Bonus:

This offer has expired.

Chase Freedom®: 20,000 points after spending $500 in the first three months, 2,500 additional bonus points if you add an authorized user and make a purchase within this same 3-month period.

The sign-up bonus for the Chase Freedom is temporarily increased for two more days to 20,000 points ($200) after you spend $500 in the first three months.  This is twice as lucrative as the normal sign-up bonus, and if history is an indicator of the future, I don’t expect the increased sign-up bonus to return for at least several months.

Chase Freedom Category Bonuses:

Each quarter the Chase Freedom offers 5x (5%) bonus categories that you need to activate in order to amp up your earning.  In fact, you can activate the first quarter category bonuses for 2015 effective today.  The 2015 primary 5x bonus categories were recently released, so you can get an idea whether they will line up with your family’s spending patterns.  The 5x bonus is capped at the first $1,500 spent in the bonus categories each quarter.

Chase Freedom 2015 5x Calendar

Q1 (January 1 – March 31, 2015): Grocery stores, movie theaters and Starbucks® stores

Q2 (April 1 – June 30, 2015): Restaurants and more

Q3 (July 1 – September 30, 2015): Gas stations and more

Q4 (October 1 – December 31, 2015): Amazon.com and more

Chase Freedom 2015 Bonus Categories

Redeeming Points with Chase Freedom:

You can redeem points earned via the Freedom at a one point = one cent value toward statement credits, at Amazon.com, via their travel portal, or toward gift cards from retailers like Home Depot, Hyatt, Neiman Marcus, Marriott, Pottery Barn, and Sephora.  You can get the value of your Freedom points up to 1.34 cents each if you redeem 25,000 points for round trip airfare that is valued up to $335 via calling 1-866-951-6592.

The ‘trick’ with the Chase Freedom is that the points become transferable Ultimate Reward points that you can move to your United, Hyatt, British Airways, Marriott, Southwest accounts and more if you also have the Chase Sapphire Preferred® Card, Ink Plus® Business Card, or Ink Bold Card. In fact, you can make your points into transferable points even if just your spouse has one of those three listed cards.  However, all of those cards have annual fees after the first year, so if you never want to deal with annual fees, you won’t have the ability to transfer the points your Freedom earns to hotel or airlines partners.  However, this is not the case when comparing the next credit card:

American Express EveryDay Overview:

The Amex EveryDay credit card was introduced in the spring of 2014 and it brought a new option to the world of rewards credit cards: a card with no annual fee that earns transferable points that you can transfer to Membership Reward hotel and airline partners.

Amex EveryDay Sign-up Bonus:

This offer has expired.

The Amex EveryDaySM Credit Card: One Year of Amazon Prime + 10,000 Membership Rewards® points after you make $1,000 in purchases in the first three months.

This sign-up bonus has been at the same public level in terms of the number of points awarded since the card was introduced earlier this year, but right now it has temporarily included a year of free Amazon Prime.

Amex EveryDay Category Bonuses:

The Amex EveryDay credit card awards 2x points at grocery stores (on up to $6,000 per year in purchases) and 1x elsewhere, but it also has another pretty unique bonus available.  The card pays out a 20% bonus on points earned during a billing cycle if you use the card 20 times or more in that billing cycle.  That isn’t too hard of a threshold to hit if you are using it regularly for everyday purchases.  There are no bonuses to activate with this card.

Amex EveryDay Earning

Redeeming Points with Amex EveryDay Card:

I have a post scheduled for later this week that details many ways to use Membership Reward points, so stay tuned for more details, but many of the uses are similar to those with the Freedom, though sometimes at different ratios.  You can use Membership Reward points for gift cards, to pay for taxis in NYC, for Amazon.com purchases, for travel, and for statement credits at rates that typically top out at one cent = one point (with some ratios being worse than that).

However, you can transfer these Membership Reward points to hotel and airline partners such as British Airways, Delta, ANA, Singapore, Hilton, and more.  That is what makes this card very interesting to me as it is a first in the rewards card industry in terms of rewards cards with no annual fees.

I don’t have this card, but instead have it’s cousin The Amex EveryDaySM Preferred Credit Card that does carry a $95 annual fee, but also has a more lucrative bonus payout structure that makes sense given how frequently I use the card.  However, in terms of cards with no annual fee, the EveryDay Card is a really good place to start.

Which is Better, American Express EveryDay or Chase Freedom?

As with virtually everything in the miles and points world, there is no one right answer on which card is better since it all depends on your goals and spending patterns.  However, if you never want to deal with activating rotating bonus categories and want the ability to transfer points to hotel and airline partners without ever having a companion card that may carry an annual fee, then the Amex EveryDay is probably the winner between the two cards.

If you are okay activating the 5x bonus four times per year, and may be okay with a companion card that has an annual fee for yourself or your spouse at some point so you can transfer the points to hotel and airline partners, then the Chase Freedom may be the winner.  The Chase Freedom can also be the stand-alone winner if you want to use your points for “paid” airfare given that you can get up to 1.34 cents per point in value with airline redemptions.

Of course, since both cards have no annual fee, you certainly could carry both and maximize the best parts of both programs.  Do you have or recommend either of these annual fee free cards?

Editorial Note: The opinions expressed here are mine and not provided, reviewed, by any bank, card issuer, or other company unless otherwise stated.

Disclaimer: The comments below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Comments

  1. I was waiting for the last line of this posting the entire time. How could you not tell your readers to apply for both cards?? That means more referral money for you!

    • J, the entire post is comparing so folks can make the best decision for them between the two. That said, the reality is you can have both, so that’s worth pointing out, but sorry to hear if that is the main take-away you got from the post since that was one line in a 1000 word post.

  2. Lets leave aside the fact that you are posting information about credit cards that are hardly new and the fact that this information has been addressed ad nauseum. Lets also leave aside the fact Lucky posted on this exact topic 3 days ago (http://onemileatatime.boardingarea.com/2014/12/12/amex-everyday-vs-chase-freedom-better/).

    The fact of the matter is, if someone isn’t willing to pay a $95 annual fee on a credit card despite the benefits of using such a card, they are probably not a huge spender on credit cards. To recommend that someone get 2 credit cards is bad advice as it will hurt that individual’s chances of meeting the 20 transaction requirement on the Amex Everyday card. To offer such advice is clearly just a self serving statement to get you more referral money rather than to provide good advice.

    Sure its only one line of the article but it just goes to show that the main point of this article is to sucker your readers into clicking referral links, not to provide advice.

    • Thanks for sharing your thoughts, it might be more helpful if you shared more than just the same thought repeatedly as commenting about your assumptions about affiliate links is the sum of all of your comment here. Many people have plenty more than 20 transactions a month but are putting them on debit cards and such to avoid cards with annual fees.

      I would love to see those folks get more protections and more rewards for their purchases. That is the motivation for comparing to cards with no annual fee and I stand behind every bit of advice in the post.

      Haven’t read Lucky’s post, but I’ll have to check it out. Thanks for the link!

  3. Anyone have any tips on making sure one meets the 30 X per month requirement on the AMEX preferred card without spending all your time counting uses?

    • Larry, there is a counter on the Amex website and app so you don’t have to manually count. I usually hit it pretty easily because I put most small transactions on this card (in addition to grocery and gas purchases and currently small biz purchases for extra 1x).

      • I don’t know if I –have– 30 small transactions a month. Grocery and gas would be about 8-10 transactions a month. I’m thinking, for instance, of auto-pay items that can somehow be split into smaller transactions.

  4. A question that I have been trying to find an answer to is there any reason to keep a bank account with Chase to go along with the Freedom card? I know they changed the bonus a couple of years ago, and it seems like they got rid of the 10% bonus, did they give anything back as a reason to stay with a Chase bank account?

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