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How to Escape Debt in 2016

How to Escape Debt in 2016

The new year is right around the corner and if you’re like most people, you’ve probably got a running list of resolutions to achieve and milestones to reach. If getting out of debt ranks near the top, now’s the time to starting thinking about how you’re going to hit your goal. Developing a clear-cut action plan can get you that much closer to debt-free status in 2016.

1. Add up Your Debt

You can’t start attacking your debt until you know exactly how much you owe. The first step to paying down your debt is sitting down with all of your statements and adding up every penny that’s still outstanding. Once you know how deep in debt you are, you can move on to the next step.

2. Review Your Budget

A budget is a plan that sets limits on how you spend your money. If you don’t have one, it’s a good idea to put a budget together as soon as possible. If you do have a budget, you can go over it line by line to find costs you can cut out. By eliminating fees and unnecessary expenses like cable subscriptions, you’ll be able to use the money you save to pay off your debt.

3. Set Your Goals

How to Escape Debt in 2016

At this point in the process, you should have two numbers: the total amount of money you owe and the amount you can put toward your debt payments each month. Using those two figures, you should be able determine how long it’s going to take you to pay off your mortgage, student loans, personal loans and credit card debt.

Let’s say you owe your credit card issuer $25,000. If you have $500 in your budget that you can use to pay off that debt each month, you’ll be able to knock $6,000 off your card balance in a year. Keep in mind, however, that you’ll still need to factor in interest to get an accurate idea of how the balance will shrink from one year to the next.

4. Lower Your Interest Rates

Interest is a major obstacle when you’re trying to get out of debt. If you want to speed up the payment process, you can look for ways to shave down your rates. If you have high-interest credit card debt, for instance, transferring the balances to a card with a 0% promotional period can save you some money and reduce the amount of time it’ll take to get rid of your debt.

Refinancing might be worth considering if you have student loans, car loans or a mortgage. Just remember that completing a balance transfer or refinancing your debt isn’t necessarily free. Credit card companies typically charge a 3% fee for balance transfers and if you’re taking out a refinance loan, you might be on the hook for origination fees and other closing costs.

5. Increase Your Income

How to Escape Debt in 2016

Keeping a tight rein on your budget can go a long way. But that’s not the only way to escape debt. Pumping up your paycheck in the new year can also help you pay off your loans and increase your disposable income.

Asking your boss for a raise will directly increase your earnings, but there’s no guarantee that your supervisor will agree to your request. If you’re paid by the hour, you can always take on more hours at your current job. And if all else fails, you can start a side gig to bring in more money.

Hold Yourself Accountable

Having a plan to get out of debt in the new year won’t get you very far if you’re not 100% committed. Checking your progress regularly is a must, as is reviewing your budget and goals to make sure you’re staying on track.

Photo credit: Â©iStock.com/BsWei, ©iStock.com/marekuliasz, ©iStock.com/DragonImages

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Source: smartasset.com

[Targeted] Best Buy Credit Card: Spend $1,500+ Outside Best Buy & Get A $75 Reward Certificate

Update 1/18/21: Some people also have an offer for 11% back on rewards on a single purchase by 1/31/21. Hat tip to reader JJ

The Offer

Offer sent out via e-mail, unknown subject line

  • Some Best Buy credit cardholders are being offered a $75 reward certificate when you spend $1,500 or more outside of Best Buy by 2/28/21.

Our Verdict

High spend requirement.

Hat tip to reader JJ

Source: doctorofcredit.com

Understanding the Perk of a Credit Card Extended Warranty

Many manufacturers warranty their products against defects or certain other issues for a period of time. This is known as the manufacturer’s limited warranty, and depending on the product, it might provide coverage for a period as short as 30 days or as long as three or more years. In many cases, by swiping the right piece of plastic at checkout, you can get an automatic credit card extended warranty.

What Is Extended Warranty Coverage?

An extended warranty is any coverage that goes beyond what the manufacturer provides automatically when you buy a product. Extended warranties are often available for purchase from third parties.

For example, you might purchase an appliance at a home-improvement store like Home Depot or a piece of electronics at a big-box store such as Best Buy. When you pay, you might be asked if you want to purchase extra warranty coverage of several years beyond the manufacturer warranty. In some cases, these warranties step in to provide additional coverage, such as replacing the product if it is damaged or falls victim to typical wear and tear.

What is a Credit Card Extended Warranty?

Some credit card accounts come with a special perk. If you purchase a qualifying product with your card, the card network backs your purchase with an extended warranty coverage. The extended warranty coverage that comes with some of the best credit cards usually extends the manufacturer’s warranty for up to a year longer.

The length of an extended warranty offered can vary by card, and the credit card network won’t extend a warranty past a certain time. Typically, if the manufacturer offers more than a five-year limited warranty, no card network adds time to that. Some only add time if the manufacturer’s warranty is three years or less. Others only add to a manufacturer’s warranty that ends within 12 months.

How Can You Tell if Your Credit Card Includes Extended Warranty Protection?

Many major cards, including some on Visa, American Express and MasterCard networks, offer warranty protection. The best way to find out if your credit card company includes this perk is to read your benefits guide, which is included in the paperwork that came with your card. You can also usually find this information online if you have an online account for the card or you can call the customer service number for your credit card issuer and ask.

Does My Visa Card Have an Extend Warranty?

If your card is a Visa Signature card, then this extra perk is included. Simply look for the words Visa Signature on the front of your card. If you don’t see those words, consult your benefits paperwork or call customer service to get the details about card benefits.

Does Capital One Offer Extended Warranty?

Yes, some Capital One cards come with extended warranty protection. This is because Capital One cards are typically issued on either the Visa or MasterCard network, and it’s the network that provides the warranty coverage.

Does the Costco Visa Include Extended Warranty Perks?

Yes, someCostco-branded Visa credit cards include an extended warranty perk. This is also true for several other branded cards for various stores, hotel chains or airlines.

How Does the Visa (or Other) Extended Warranty Work?

Credit card extended warranty programs have some unique guidelines but do tend to follow the same overall concept. You pay for an eligible item with your credit card. If a covered issue arises after the manufacturer’s warranty coverage is up but before the extended time period covered by the card network, then you can file a claim to be reimbursed for the loss. To file a claim, you’ll need to call the benefits administrator for your credit card issuer.

  • American Express: 1-800-225-3750
  • Visa: 1-800-882-8057
  • MasterCard: 1-800-622-7747

When you make a purchase with your credit card, keep the receipt in case you need to file a claim. Also keep the manufacturer’s warranty, receipt, serial number and product description information on hand. You’ll need all of this information when you make the phone call to file a claim.

Make it a habit to start a paper file whenever you spend big on something. That way, you’ll be ready in case you need to use this benefit. But do note that not all purchases are covered by these rewards. Examples of what’s not covered include boats, motorized vehicles, computer software and used or pre-owned items.

Extra Protection by Paying with Credit Cards

The credit card extended warranty isn’t the only perk you might get when you pay with your credit card. Some cards offer buyer’s remorse protection, ensuring you can always return eligible items within certain windows, or travel and road protections for peace of mind when you find yourself 100 miles or more away from home.

Understanding how credit cards work and what benefits you get from yours lets you get added value when making purchases. Start off right by choosing the best credit card for your needs and using it wisely as one resource in your personal money management toolbox.

The post Understanding the Perk of a Credit Card Extended Warranty appeared first on Credit.com.

Source: credit.com

Amazon Prime Card offering new Whole Foods card art, limited-time bonus

On Jan. 20, 2021, Chase announced a new card art option for the Amazon Prime Rewards Visa Signature card featuring Whole Foods Market and added a limited-time sign-up bonus offer for those who prefer to shop at Whole Foods in-store.

Amazon has become a leader in grocery shopping during the pandemic, with consumers avoiding grocery stores due to health safety concerns – not to mention the convenience of shopping from a web browser. Amazon Prime members can enjoy speedy free delivery, as well as get access to online shopping at Whole Foods Market and special member deals when shopping in-store.

They can also count on extra savings if they carry the Amazon Prime Rewards card from Chase – or if they’re looking to apply in the next few weeks.

Here’s what you need to know.

Amazon Prime Rewards Visa Signature card

Amazon Prime Card Whole Foods

Our rating: 3.8 out of 5
Score required: Good to excellent
Type of card: Cash back
Spending categories: Amazon, Whole Foods, restaurants, gas stations, drug stores

  • 5% back on Amazon.com and Whole Foods purchases
  • 2% back on restaurant, gas station and drug store purchases
  • 1% back on other purchases
  • $70 Amazon.com gift card upon approval or $100 statement credit after spending $100 at Whole Foods in first 2 months
  • No annual fee

Our take: While the Amazon Prime Rewards card offers excellent cash back on Amazon and Whole Food purchases, it might not be the best choice for customers who don’t currently have a Prime membership and aren’t looking to subscribe.

A new Whole Foods card design and limited-time offer

Chase introduced a new card design option for new Amazon Prime Rewards cardholders, featuring Whole Foods Market art. New cardmembers with an eligible Prime membership can choose the new design when they apply for the card. If you’re an existing cardholder and would like to switch to the new design option, you can call in to request a new card after Jan. 22, 2021.

If you frequently shop at Whole Foods in-store, the new limited-time introductory offer can also be exciting news for you. Through March 3, 2021, new Amazon Prime Rewards Visa cardholders can earn a $100 statement credit after spending $100 in Whole Foods Market stores in the first two months from account opening. Alternatively, they can still choose the standard $70 Amazon gift card offer as a sign-up bonus.

Considering the standard bonus is lower, the new temporary offer might be a better deal. On the other hand, if you avoid shopping in-store or normally use Amazon Fresh for buying groceries, the gift card might make more sense for you.

Should I start shopping at Whole Foods if I have an Amazon credit card?

If you already shop at Whole Foods, the 5% back with the Amazon Prime Rewards Signature Visa and 10% off specially marked items is a good deal. The discounts, though, don’t make Whole Foods cheaper than other grocery stores.

In fact, according to a study from 2019, Whole Foods remains the most expensive grocery store with its prices at 34% above Walmart, which was reported to have the lowest prices overall. If your goal is to save on groceries, Whole Foods is evidently not the best option – even if you carry the Amazon Prime card.

Other cards to consider

The Amazon Prime Card isn’t the only option you should consider if you often shop on Amazon or at Whole Foods.

See related: Which is the best card to use on Amazon.com purchases?

For instance, with the Chase Amazon.com Rewards Visa card, you can get a $50 Amazon gift card upon approval and earn 3% on Amazon and Whole Foods purchases, 2% percent at restaurants, gas stations and drugstores and 1% on all else. If you don’t have a Prime membership and aren’t looking to subscribe, this is a good option, since the card doesn’t require for a cardholder to be a member.

If you do have a membership and shop on Amazon a lot, the Amazon Prime card is a better deal. With 5% for purchases made at Whole Foods and on Amazon, 2% at restaurants, gas stations and drugstores and 1% on all else, this card is hard to beat for Amazon and Whole Foods lovers.

If you’re looking for a card to buy groceries, consider the Blue Cash Preferred® Card from American Express that could save you more than with the Amazon Prime Visa at Whole Foods. Why? Blue Cash Preferred cardholders earn 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%).

See related: Best credit cards for grocery shopping

Bottom line

Now you can stack your rewards at Whole Foods, earning cash back and the limited-time bonus with the Amazon Prime Card, and you can get extra savings from the loyalty program. Whether it makes sense to shop at Whole Foods, even with rewards cards and the loyalty program, is up to you.

Source: creditcards.com

What Is the CVV on a Credit Card?

What Is the CVV on a Credit Card?

If you’ve made a purchase online or over the phone, you’re probably familiar with the three sets of credit card numbers you have to hand over. These numbers include the credit card number, the expiration date and the CVV. If you’re an online shopping pro, you’ll know where to find the CVV. But what exactly is the CVV on a credit card?

What Is the CVV on a Credit Card?

A credit card’s CVV acts as another line of security against fraud. The CVV, or card verification value, can also be referred to as the CSC, or card security code. These numbers serve as one of the most important anti-fraud measures for a credit (or debit) card, especially with the rise of virtual transactions. So when you make a purchase online or over the phone, giving the CVV assures a merchant that the purchase is legitimate and authorized.

When you use your card in person, retailers can check your ID to make sure you’re the cardholder. But merchants can’t do the same when you make an online purchase. Instead, the CVV serves a substitute for personal identification. Plus, your card carrier can verify your card’s unique CVV in the event verification is needed.

Not all merchants require you to enter your CVV when making a purchase. This doesn’t make a merchant illegitimate, however. In any case, you always want to make sure you’re handing over your credit card information to a merchant you trust.

Where to Find Your Card’s CVV

Card carriers print their CVVs in different places on their cards, so it’s important to know where the CVV is on your card(s). If you have a Visa, Mastercard or Discover card, you can find the three-digit CVV on the back of your card to the right of the signature strip. The number may also be adjacent to either your full credit card number, or just the last four digits of it.

However, if you have an American Express card, you can find the CVV on the front, right side of your card. Also note that Amex calls this number a card identification number (CID). An Amex CID is also four digits instead of three.

What Is the CVV on a Credit Card?

How a CVV Protects You

A card’s CVV comes in handy mostly for online purchases. Again, it acts as another line of defense against fraud. So even if a hacker gains access to your credit card number, expiration date and full name, they still need your CVV to complete the transaction. Luckily, CVVs aren’t as easily obtainable as your other credit card information.

This is due to the Payment Card Industry’s Data Security Standard (PCI DDS). This was created by Amex, Discover, Mastercard, Visa and other credit card leaders to establish standard rules for credit card information storage. One of its main stipulations states that merchants cannot store your CVV after you make a purchase. However, there’s nothing preventing merchants from storing the rest of your card’s information, like the credit card number. This makes it harder for criminals to find the CVV attached to your credit card number.

The CVV also works in tandem with a credit card’s magnetic strip and the newer EMV chip technology. The printed CVV on your card is embedded in the card’s magnetic strip. The chip has a digital CVV equivalent called the Integrated Chip Card Card Verification Value (iCVV). So when you use your card in person, whether you swipe or insert the chip, your CVV will still be confirmed.

Limitations of a CVV

What Is a CVV on a Credit Card?

Typically, the issues that arise with CVVs are often self-inflicted by the cardholder. Since it’s hard for fraudsters to obtain your CVV through a credit card database, they turn to other illegal means. This includes phishing and physically stealing your cards.

These scams occur as the occasional email or pop-up on your computer, enticing you to make an online purchase. Some scams are easy to spot, due to misspelling or other obvious errors. However, because online merchants so often ask you to enter your CVV, hackers can also include that requirement on their fraudulent page. If you enter your credit card information, including the CVV, the hackers have easily gained access to your account.

Of course, there is always the possibility of getting your credit card physically stolen. In this case, the thieves don’t need to hack anything since all your information is there on the card. Your best bet is to cancel your card as soon as possible, request a new card from your issuer and dispute any unauthorized charges made to the account.

Final Word

What Is a CVV on a Credit Card?

While in-person purchases aren’t entirely foolproof, online transactions put you and your information more at risk of fraud. To combat this, credit card providers created CVVs and their associated regulations to help keep your personal credit information safe. You can help protect yourself, too, by only entering your card information on websites you trust.

Tips for Keeping Your Card’s Info Safe

  • It’s important to research and find the right credit card for you. When you’re looking through a card’s features, you should look at its security features. Make sure you’re comfortable with its limits.
  • Never engage with any emails, ads or websites that you don’t immediately recognize as legitimate. This includes not clicking on suspicious links and not entering your credit card’s account number, expiration date and especially the CVV.
  • Be sure to look for a “Secure” tag to the left of the web address of any site you’re making an online purchase through. Only encrypted sites feature these tags, so you can feel confident your card’s information will be safe in these transactions.

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Photo credit: ©iStock.com/Georgijevic, CVVnumber.com, ©iStock.com/ShotShare, Â©iStock.com/wutwhanfoto

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Source: smartasset.com

Credit 101: What Is Revolving Utilization?

Aerial view of a young woman with brown hair contemplating her revolving utilization. She has a pen in her mouth and an open notebook on her desk.

According to Experian, the average credit score in the United States was just over 700 in 2019. That’s considered a good credit score—and if you want a good credit score, you have to consider your revolving utilization. Revolving utilization measures the amount of revolving credit limits that you are currently using, and it accounts for a large portion of your credit score.

Find out more about what revolving utilization is, how to manage it, and how it impacts your credit score below.

What Is Revolving Credit?

To understand revolving utilization, you first have to understand revolving credit. Revolving credit accounts are those that have a “revolving” balance, such as credit cards.

When you are approved for a credit card, you are given a credit limit. If you have a credit card with a limit of $1,000 and you use it to buy $200 worth of goods, you now have a $200 balance and an $800 remaining credit limit.

Now, if you pay that $200, you again have $1,000 of open credit. If you pay $150, you have $950 of open credit. But your credit revolves between balance owed and how much open credit you have available to use. How much you have to pay each month—known as the minimum payment—depends on how much your balance owed is.

Other forms of revolving credit include lines of credit and home equity lines of credit. They work similar to credit cards.

What Isn’t Revolving Credit?

Unlike revolving credit, installment loans involve taking out a lump sum and paying it back in an agreed-upon fashion over a set term of months or years. Typically, you agree to pay a certain amount per month for a certain number of months to cover the amount you borrowed plus any interest.

With an installment loan, the amount of your monthly payment is determined by your loan agreement, not the balance due. Common types of installment loans include vehicle loans, personal loans, student loans, and mortgages.

What Is Revolving Utilization?

Revolving utilization, also known as “credit utilization” or your “debt-to-limit ratio,” relates only to revolving credit and isn’t a factor with installment loans. Utilization refers to how much of your credit balance you’re using at a given time.

Here’s how to determine your individual and overall credit utilization:

  1. Look at your credit reports and identify all of your revolving accounts. Each of these accounts has a credit limit (the most you can spend on that account) and a balance (how much you have spent).
  2. To calculate individual utilization percentage on an account, divide the balance by the credit limit, and multiply that number by 100.
    1. $500/$1,000 = 0.5
    2. 5*100 = 50%
  3. To calculate overall utilization (all revolving accounts), add up all of the credit limits (total credit limit) and all of the balances (total spent) on your revolving accounts. Divide the total balance by total credit limit, and multiply that number by 100.

If you have a credit card with a $1,000 credit limit and a balance of $500, your utilization rate is 50%, for example. For the same card, if you have a balance of $100, your utilization rate is 10%.

When it comes to your credit score, revolving utilization is typically calculated in total. For example:

  • You have one card with a limit of $1,000 and a balance of $500.
  • You have a second card with a limit of $4,000 and a balance of $400.
  • You have a third card with a limit of $3,000 and a balance of $600.
  • Your total credit limit across all three cards is $8,000.
  • Your total utilization across all three cards is $1,500.
  • Your revolving utilization is around 19%.

How Can You Reduce Revolving Utilization?

You can reduce revolving utilization in two ways. First, you can pay down your balances. The less you owe, the less your utilization will be.

Second, you can increase your credit limit. If you apply for a new credit card but don’t use it, you’ll have more open credit, and that can reduce your utilization. You might also be able to ask your credit card company to review your account for a credit increase if you’re an account holder in good standing.

Find the Right Credit Card for You

What Is Revolving Utilization’s Impact on Your Credit Score?

Your revolving utilization rate does impact your credit. It’s the second-largest factor in the calculation of your credit score. Your utilization rate accounts for around 30% of your score. The only factor more important is whether you make your payments on time.

Why is credit utilization so important to your score? Because to lenders, it can say a lot about you as a borrower.

If you’re currently maxed out on all your existing credit, you may be struggling to pay your debts. Or you might not be managing your debts in the most responsible fashion. Either way, lenders might see you as a riskier investment and be less inclined to approve you for loans or other credit.

How Do You Know If You Have a Revolving Utilization Problem?

Sign up for Credit.com’s free Credit Report Card. It provides a snapshot of your credit report and gives you a grade for each of the five areas that make up your score. That includes payment history, credit utilization, age of credit, credit mix, and inquiries. The credit report card makes it easy for you to see what might be negatively affecting your credit score.

You can also sign up for ExtraCredit, an exciting new product from Credit.com. With an ExtraCredit account, you get a look at 28 of your FICO scores from all three credit bureaus—plus exclusive discounts and cashback offers as well as other features—for less than $25 a month.

Sign Up Now

The post Credit 101: What Is Revolving Utilization? appeared first on Credit.com.

Source: credit.com

What’s a Good Credit Score?

Whats a good credit score?

Your credit score is incredibly important. In fact, this number is so influential on various financial aspects of life that it can determine your eligibility to be approved for credit cards, car loans, home mortgages, apartment rentals, and even certain jobs. Knowing what your credit score is, and what range it falls under, is important so you can decide what loans you can to apply for, and if necessary, if steps need to be taken to improve your score.

So what constitutes a good credit score?

The Credit Score Range Scale

The most common credit score used by lenders and other business entities is the FICO score, which ranges from 300 to 850. The bigger the number, the better. To create credit scores, FICO uses information from one of the three major credit bureau agencies – Equifax, Experian or TransUnion. Knowing this range is important because it will help you understand where your specific number fits in.

Know what factors influence a good credit score to help improve your own credit health.

As far as lenders are concerned, the lower a consumer’s number on this scale, the higher the risk. Lenders will often deny a loan application for those with a lower credit score because of this risk. If they do approve a loan application, they’ll make consumers pay for such risk by means of a much higher interest rate.

Understand Your Credit Score

Within the credit score range are different categories, ranging from bad to excellent. Here is how credit score ranges are broken down:

Bad credit: 630 or Lower

Lenders generally consider a credit score of 630 or lower as bad credit. A number of past activities could have landed you in this category, including a string of late or missed credit card payments, maxed out credit cards, or even bankruptcy. Younger people who have no credit history will probably find themselves in this category until they have had time to develop their credit. If you’re in this bracket, you’ll be faced with higher interest rates and fees, and your selection of credit cards will be restricted.

Whats a good credit score?

Fair Credit: 630-689

This is considered an average score. Lingering within this range is most likely the result of having too much “bad” debt, such as high credit card debt that’s grazing the limit. Within this bracket, lenders will have a harder time trusting you with their loan.

Good Credit: 690-719

Having a credit score within this range will afford you more choices when it comes to credit cards, an easier time getting approved for various loans, and being charged much lower interest rates on such loans.

Excellent Credit: 720-850

Consider your credit score excellent if your number falls within this bracket. You’ll be able to take advantage of all the fringe benefits that come with credit cards, and will almost certainly be approved for loans at the lowest interest rates possible.

Understand the factors that make up a good credit score.

Whats a good credit score?

What’s Your Credit Score?

Federal law allows consumers to check their credit score for free once every 12 months. But if you want to check more often than this, a fee is typically charged. Luckily, there are other avenues to take to check your credit score.

Mint has recently launched an online tool that allows you to check your credit score for free without the need for a credit card. Here you’ll be able to learn the different components that affect your score, and how you can improve it.

You’ll be able to see your score with your other accounts to give you a complete picture of your finances. Knowing what your credit score is can help determine if you need to improve it to help you get the things you need or want. Visit Mint.com to find out more about how you can access your credit score – for free.

Lisa Simonelli Rennie is a freelance web content creator who enjoys writing on all sorts of topics, including personal finance, investing in stocks, mortgages, real estate investments, and anything else to do with the world of economics.

The post What’s a Good Credit Score? appeared first on MintLife Blog.

Source: mint.intuit.com

Earn a cash back bonus of up to $200 with the Chase Freedom Flex and Freedom Unlimited cards

If you’re looking for a way to get a large influx of Ultimate Rewards points, there is great news for Chase members: Both the Chase Freedom Flex and Chase Freedom Unlimited cards offer a high cash bonus for a low spend threshold.

Currently, both cards are offering a $200 bonus if you spend $500 in the first three months.

Which Chase Freedom card is better in the first year?

That depends largely on your spending habits. While the two cards share certain earning categories, they still have different rewards earning structures.

The Freedom Unlimited offers the same flat rate of 1.5% cash back on purchases outside of bonus categories, and the Freedom Flex card offers 5% cash back in rotating bonus categories that you must activate each quarter (on up to $1,500 in purchases, then 1% cash back).

Comparing the Chase Freedom Flex and Freedom Unlimited cards

For many cardholders, the Chase Freedom Flex card should offer greater value, assuming you are able to maximize your spending in its quarterly bonus categories.

That said, if you’re not able to maximize the Freedom bonus categories, the Freedom Unlimited card might be a better choice thanks to its higher rewards rate on general purchases.


Chase Freedom Flex
/
Chase Freedom Unlimited
Rewards rate
  • 5% cash back on rotating bonus categories (up to $1,500 per quarter)
  • 5% cash back on Lyft purchases (through March 2022)
  • 5% cash back on travel purchased through Chase Ultimate Rewards
  • 3% cash back on dining
  • 3% cash back on drugstore purchases
  • 1% cash back on other purchases
  • 5% cash back on Lyft purchases (through March 2022)
  • 5% cash back on travel purchased through Chase Ultimate Rewards
  • 3% cash back on dining
  • 3% cash back on drugstore purchases
  • 1.5% cash back on all other purchases
Annual fee $0 $0
Introductory offer $200 if you spend $500 in first 3 months $200 if you spend $500 in first 3 months
Estimated earnings in first year (Assumes maxed-out bonus categories and a $15,900 annual spend) $666 $526

Of course, there’s nothing to stop you from applying for both cards and potentially earning both cards’ sign-up bonuses. The Chase Freedom Flex and Freedom Unlimited cards go nicely together – you can use the Chase Freedom Flex card to earn 5% cash back on its quarterly bonus categories and the Chase Freedom Unlimited card to earn 1.5% cash back on everything else. Then, use either card at drug stores, restaurants and on travel purchases in the Ultimate Rewards portal.

Recent changes to the Chase Freedom cards’ sign-up bonus

While some rewards cards frequently update their sign-up bonuses, the offers on the Chase Freedom cards are fairly consistent. Recently, however, we have seen increased welcome offers, with both cards offering a $200 bonus. For a limited time, both cards also offered a higher rate on grocery store purchases in the first year of card membership, but that offer has expired.

Chase Freedom Flex card recent changes
Current $200 if you spend $500 in first 3 months
Previous $200 if you spend $500 in first 3 months, plus 5% cash back on grocery store purchases in first year (on up to $12,000 in spending, not including Target® or Walmart® purchases)

 

Chase Freedom Unlimited card recent changes
Current $200 if you spend $500 in first 3 months
Previous $200 if you spend $500 in first 3 months, plus 5% cash back on grocery store purchases in first year (on up to $12,000 in spending, not including Target® or Walmart® purchases)
Previous $150 if you spend $500 in first 3 months

Who is eligible to apply for the sign-up bonus?

New cardholders who have not received a sign-up bonus for the same card within the past 24 months are eligible to earn the bonus with the Chase Freedom cards. Of course, you have to qualify for the cards first, which means you’ll need a credit score in the good to excellent range (at least 680).

Chase doesn’t appear to have a hard limit on how many cards you own, though they may deny your application if you have too large of a credit limit across your other Chase cards. Also, while there is no strict rule on how many Chase cards you can apply for within a certain timeframe, many applicants report a limit of one to two new cards per month.

Chase has recently cracked down on applicants who have opened several credit cards at once. Though it’s not an official policy, Chase appears to be enforcing a “5/24” rule on new credit card applications. What this means is – if you have opened at least five credit card accounts in the past 24 months with any issuer (not just Chase) – your application will likely be denied. The rule seems to apply to any credit card account that shows up on your credit report, including co-branded store cards and authorized user accounts. (On the plus side, business credit cards that don’t appear on your personal credit report do not affect your chances of being approved.)

How to earn and use Ultimate Rewards points

As cash back cards, the Chase Freedom cards offer a flat 1 cent value on most redemption options. However, there are a few options that you want to avoid. Our table below shows that Amazon.com and Chase Pay purchases are valued at only 0.8 cents per point:

Redemption options for Chase Freedom cards

Redemption option Point value (cents) Value of 20,000 points
Statement credit 1 $200
Direct deposit 1 $200
Gift cards 1 $200
Ultimate Rewards portal travel 1 $200
Amazon.com purchases 0.8 $160
Chase Pay purchases 0.8 $160

You can also transfer points from the Chase Freedom cards to certain Chase Ultimate Rewards cards, such as the Chase Sapphire Preferred Card* and Chase Sapphire Reserve cards. As you can see from the table below, transferring your points to one of these cards will allow you to get more value out of your sign-up bonus. You get a 25% to 50% bonus on your points if you redeem for travel through the Chase Ultimate Rewards portal, depending on which card you own.

Also, both the Sapphire cards allow you to transfer your points at 1:1 value to one of Chase’s many travel partners to get even higher values on your points. For instance, we value Southwest Airlines points at 1.6 cents on average (note the value can vary widely on the ticket that you purchase), which means the 20,000-point bonus can net you $320 of value on average when used for Southwest airfare:

Redemption options for Chase Sapphire cards

Redemption option Point value (cents) Value of 20,000 points
Chase Sapphire Reserve – 50% redemption bonus 1.5 $300
Chase Sapphire Preferred – 25% redemption bonus 1.25 $250
Singapore Airlines transfer 2.36 $472
British Airways transfer 1.4 $280
Southwest Airlines transfer 1.6 $320
JetBlue transfer 1.53 $306
United Airlines transfer 1.52 $304
World of Hyatt 1.43 $286
Air France transfer 1 $200
Virgin Atlantic transfer 0.8 $150
Marriott Rewards transfer 0.8 $160
IHG transfer 0.65 $130

An extra $500 per year

In addition to a sign-up bonus, the Chase Freedom cards offer a referral bonus worth up to $500 each year. Chase’s “Refer-a-Friend” program gives Freedom cardholders $100 cash back for each person they refer who is approved for the Freedom card – up to five people per year.

To take part in the promotion, enter your last name, zip code and last four digits of your credit card on Chase’s Refer-a-Friend page. On the following page, enter the first name and email address of each person you wish to invite. You also have the option to post an invitation link to Facebook or Twitter or refer friends through the Chase app.

*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This card is no longer available through CreditCards.com.

Source: creditcards.com