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We are seeing some interesting rewards credit card trends in 2018, and one of the trends being explored by certain cards is a shift away from the big welcome bonuses in favor of more rewarding rates on everyday spending. Don’t worry as this is not a goodbye to the welcome bonus, but it is certainly an interesting development that doesn’t seem to be diminishing anytime soon.
Details on the standard Freedom Unlimited bonus
The Chase Freedom Unlimited card has a standard sign-up bonus of $150 cash back (aka 15,000 points) after you spend $500 in the first three months. On an ongoing basis, the card offers 1.5x points per dollar charged. Note that this is a different card than the version of the Freedom that has rotating 5x bonus categories. The Freedom Unlimited has an extremely strong earning rate for a card with no annual fee. This is especially true if you also have a premium Chase Ultimate Rewards product that will allow you to transfer the points earned on the Freedom Unlimited to Ultimate Rewards transfer partners such as United, Hyatt, Southwest, and more.
If you have the Chase Sapphire Reserve, then you can even use the points earned by the Freedom Unlimited at 1.5 cents in value each to book travel through Chase. This means you are essentially earning 2.25 cents toward travel with each dollar you charge to the Freedom Unlimited at 1.5x points per dollar.
New Freedom Unlimited offer gives you 3x points for a year
Earning 1.5x points per dollar is already a strong earning rate, but a new offer for the card doubles that rate from 1.5x to 3x for the entire first year of holding the card. (Not an affiliate link). Most of us love the 3x categories of travel and dining on the Chase Sapphire Reserve, so imagine earning 3x points everywhere. This would include things such as visits to the doctor’s office, veterinary office, daycare, dry cleaning, your insurance bills, on tax payments, car repairs, home repairs, and essentially anywhere that takes a credit card for an entire year. Depending on how much you spend, that could result in a whole lot of very valuable points.
The trade-off in this equation is that this 3x for a year offer does not include the $150 welcome bonus. It does still include a $25 bonus (2,500 points) if you add an authorized user who makes their first purchase within the first 3 months of the account opening.
Earning 3x can be better than a welcome bonus
At 3x/3% back, you would need to spend $10,000 on the card in the first year to make back the additional $150 you passed on as the standard welcome bonus. For some hit and run folks, that math won’t be worth the trade-off of the welcome bonus. However, if you put an average of $3,000 on the card each month for a year, that would mean you could earn 108,000 points on the card during that time. Charging that much with the standard welcome bonus would only result in 69,000 points without the doubled rate on everyday earning. Obviously, the earning discrepancy grows the more you charge on the card in the first 12 months.
If you like to keep things simple, don’t use a ton of different cards, and charge a relatively large amount each month, this could be very rewarding.
Make this an exceptional deal if you also have the Sapphire Reserve
If you used the 3x points earned on the Freedom Unlimited by transferring them to the Sapphire Reserve card and then booked your travel through Chase, that would result in earning 4.5 cents toward travel with every dollar charged on the Freedom Unlimited for the entire first year. I cannot think of a better earnings ratio out there without category restrictions on any card!
The Freedom Unlimited is only available to those under 5/24 and who have not received a new cardmember bonus for the card in the past 24 months.
Would you trade away a welcome bonus for the ability to earn 3x points on virtually everything for a year?
Editorial Note: The opinions expressed here are mine and not provided, reviewed, by any bank, card issuer, or other company unless otherwise stated.