Last week, Chase unveiled new rewards credit card offerings—including the new Chase Freedom Flex®—along with new cash back rewards for the existing Chase Freedom Unlimited®. Both will be available on September 15, 2020.
Chase Freedom Flex® benefits
The Chase Freedom Flex®—a $0 annual fee World Elite Mastercard—offers an impressive lineup of benefits. You may earn 5% cash back (up to $1,500) on quarterly rotating categories like grocery stores, gas stations, gym memberships, and more. There is one catch, though: you have to activate those 5% categories every quarter. Otherwise, you will only earn 1% cash back.
The Chase Freedom Flex® also offers 5% cash back on travel purchased through the Chase Ultimate Rewards portal, 3% cash back on restaurants, 3% cash back at drugstores, and 1% unlimited cash back on everything else.
When a credit card offers 5% rotating cash back, you don’t typically see more than 1% cash back in other categories—so the 5% on travel, 3% on restaurants, and 3% on drugstores are particularly noteworthy.
Other perks for new applicants: Chase is offering a $200 sign-up bonus if you spend at least $500 within the first three months. Plus, you may get 5% cash back on grocery purchases (not including Target or Walmart) on up to $12,000 in the first year.
You also get World Elite Mastercard benefits: $800 per claim ($1,000 per year) in cell phone insurance; $10 Lyft credit for every five rides per month; 5% cash rewards on Boxed purchases; a free ShopRunner membership; and Double VIP+ points for Fandango movie tickets.
You also receive two previously announced benefits: 5% total cash back on Lyft rides through March 2022—and a free three-month trial to DoorDash—with a 50%-off discount for nine months after that.
Chase Freedom Unlimited® benefits
Chase Freedom Unlimited® cardholders—who currently receive 1.5% cash back on all purchases—are also getting an upgrade. Chase Freedom Unlimited® will start offering new cash back rewards categories, including the same 5% cash back on travel purchased through the Chase Ultimate Rewards portal, 3% cash back on restaurants, and 3% cash back at drugstores.
Chase Freedom Unlimited® cardholders will also receive the same 5% cash back on Lyft through March 2022, and a free three-month DoorDash trial (with the 50% discount for nine months.)
New applicants may qualify for the same $200 sign-up bonus after spending $500 in the first three months, along with 5% cash back on up to $12,000 of groceries (not including Target and Walmart).
Should you apply for Chase Freedom Flex® or Chase Freedom Unlimited®?
While the new Chase Freedom Flex® offers better perks, both cards offer competitive cash back rewards, without paying an annual fee. Doctor of Credit reports that existing Freedom cardholders may apply for the Chase Freedom Flex® and qualify for the sign-up bonus.
One of the biggest downsides of applying for either card may be the possibility of triggering Chase’s 5/24 rule, though—which may temporarily disqualify you from Chase’s other travel rewards cards.
If you prefer to rack up travel rewards, check your credit reports before applying for either Chase Freedom Flex® or Chase Freedom Unlimited®. You will need to know how many cards you have already applied for over the past 24 months.
Know your credit card spending habits
Of course, the biggest risk of any rewards credit card may be the temptation to overspend. If you struggle with credit cards, rewards cards typically have higher interest rates, which can make them tougher to pay off. So if you aren’t confident you can pay off the balance in full every month, you may be better off with another product.