Monday, 30 November 2020

NEW: Chase Freedom Unlimited 3% Flat Cash Back in 1st Year

NEW: Chase Freedom Unlimited 3% Flat Cash Back in 1st Year
31 Jul

Hey I'm Adam Jusko from ProudMoneycom in this video I'm talking about changes to the Chase Freedom Unlimited Card, specifically the opportunity to get 3% cash back — a flat cash back rate — in the first year of having the card

Before I talk about that I would ask you please subscribe to our YouTube channel if you have not already and if you have already I thank you for doing so So Chase has made a big change to the bonus on the Freedom Unlimited Card — you will now — as a new cardholder — get 3% flat cash back on all your purchases in the first year that you have the card and then after that first year it'll go back to the regular Chase Freedom Unlimited rate of 15% cash back on everything Now Chase used to offer a $150 bonus on this card if you spent $500 in the first three months of having it That is now going away in favor of this 3 percent flat cash back formula within the first year

So then the question is: if you've been following this at all or maybe if you have the Chase Freedom and already got that bonus, is this a better offer? Is it worse, a worse offer than it was before? Well, if you look at it if you look at the first year in particular, if you spend over $10,000 per year on your credit card and if you made this your primary card, spend over $10,000 with it, you would actually make out better in year one with this card at the 3 percent flat cash back rate then you would at the old 15% rate assuming the $150 bonus as well

So that's sort of where the what you could consider possibly the break-even would be, you know, at 10,000 above $10,000 you actually would make more in year 1 off of this card than you would with the old formula However, if you consider that means you actually have to put at least $10,000 on to this card, you know, you actually have to get this card and use it in order to get a higher bonus, or at least in compared to how you could use the card before Before you could get the card, essentially spend that $500, get your $150 bonus, and you could put that card away and then you could start using a different card if it had a higher cash back formula And actually I did this myself

I'm not a big card churner but I did at one point I had the Citi Double Cash Card but I saw this offer and I decided to make the easy $150 and so went and got this card and spent the $500 with it, got the $150 bonus and still have the card but I have to say I don't actually use it very often because there's not really good reason to So if you are someone who doesn't necessarily care about, you know, you're not a card churner or you don't want to carry a bunch of cards in your wallet, this 3% flat cash back rate is a great thing in the first year

You're gonna make a lot back on your purchases and you're gonna do probably better than you would with almost any other card on the market in the first year, especially if you're someone that doesn't feel like juggling 15 different cards to figure out how to get the best rate on everything that you purchase with your card And from Chase's end, even though this seems like a very generous offer, this actually makes a lot of sense for them because instead of them giving out those, you know, $150 every time someone spends $500 for new card holders and then essentially losing those card holders because a lot of them may not use the card after that, this is a way to give a generous bonus but only give that bonus if you are going to use the card for a lot of spending So that makes sense for them to really do this And there's going to be a certain amount of people that are going to stick with the card afterwards, they're not people that regularly shop the credit card market so when it goes back down to that 15% cash back they're not going to care that much, they're just gonna enjoy the fact they got 3% and they will move on and be happy with the 1

5% probably So this is sort of a trend in the market right now, this new way of giving out bonuses And I think for credit card churners, this is something to be a little bit concerned about, because there are a couple other cards that are doing this and I would guess that there are going to be more in the future If you are familiar with any of Discover's cards, you might know that the way they work their bonus is not based on an upfront spend They actually double your rewards at the end of your first year so you're only getting double what you actually spent

So say you have the Discover travel card — it's a 15 miles or essentially a 15% cash back card, it's almost the same offer as what you're getting here with the Chase card — you'd get 3% in that first year but you're not going to get it until the end of the year, and it's gonna be based on what you spent throughout that whole year We just talked within the last couple weeks about the new Barclays travel card and they do a similar thing where you can earn bonuses but you're gonna earn those bonuses on your longer term spending throughout the year versus there being a big upfront bonus and then not really having a bonus ongoing, which then of course, you know, normally you'd get a lot of people who would use that card, get the bonus, and then move on to a new card So this still incentivizes you to use the card but for a longer term than you would have in the past

So it's pretty smart on the credit card company's side, but for a lot of consumers it's not going to make them very happy if they are someone that likes to go through card after card and get those bonuses Now the last thing I will talk about is sort of the standard for the flat cash back card on the market today is the Citi Double Cash and I want to come compare this to the Citi Double Cash and kind of see how things stack up in Year One So the Citi Double Cash gives you 2% flat cash back on everything you buy and they've changed their offer recently where you also get a hundred dollar bonus based on initial spend

I think it might be five hundred in the first three months or something along those lines So I did some calculations and basically if you spend over $10,000 with the Chase Freedom Unlimited in that first year, you're going to do better than you would with the Citi Double Cash Card, at least in that first year Obviously after that when you're not getting that bonus anymore, the two percent's obviously gonna be better than the 15% — I'm sure you could do that math all on your own The last thing I would tell you if you are new to Chase is that your cash back actually is

technically comes to you in the form of points Chase Ultimate Rewards points, which you can use essentially as a penny per point when it's redeemed, meaning 10,000 of these Ultimate Rewards points are going to equal $100 in cash So just the way that you redeem it, that's kind of how that works

But what that also does is, it allows you to have the opportunity to potentially use those points for other rewards if you choose to You can use them for travel rewards, you can actually transfer them to Amazon points although those are not on a one-to-one basis, that's a little bit of a worse calculation there And if you have other Chase cards you also can combine your points between cards and use them for travel or whatever as well So that's kind of a little technical end of that But that's sort of the big news for this video — the three percent flat cash back in the first year on the Chase Freedom Unlimited

I would be interested to hear your thoughts on it, especially if you have taken advantage of this bonus offer in the past, and how you feel about sort of is there gonna be a decline in churning and is this a new trend that we can expect in credit cards? Thanks for watching Please go to ProudMoney

com where we have other credit card reviews and other personal finance stuff to check out, too Thanks for watching Bye

Source: Youtube

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