Chase Freedom Unlimited Credit Card

The Good

• 0% Intro APR for first 15 billing cycles (with whichever is greater, $5 or 5% balance transfer fee)
• FICO® Score updated monthly for free
• $150 signup cash bonus if you spend $500 in first 3 months
• 5% cash back on all purchases; rewards don’t expire
• Redeem for gift cards, travel, or Amazon.com merchandise
• No annual fee

  It is difficult to know whether to classify this as a balance transfer or a rewards card – because it does a very good job at both.  The new Chase Freedom Unlimited® Credit Card has quickly earned its place among top rewards credit cards. The flat 1.5% rewards rate is also well above average for rewards cards, and the signup bonus is among the best for a card with no annual fee.   The no-annual-fee Freedom Unlimited Card offers multiple benefits beyond a generous 0% intro APR for the first 15 billing cycles that comes with even the basic Chase Freedom credit card. Your unlimited cash back for everyday purchases is 1.5%. You’ll also get that 150 dollars signup bonus when you spend 500 dollars in the first three months.   The Credit Card gives its users 1.5 Ultimate Reward points for every 1 dollar spent. The card belongs to what is called tier one Ultimate Rewards. You can tell which card is tier one, since it will be one with no annual fee. Tier one cards are the ones where the points you earn can only be redeemed through gift cards or cash back, at a rate of $0.01 per point.   This gives consumers ultimate flexibility to use rewards where they can get the best value – transfer to an airline as points, get a gift card, or get cash.  

The Bad

• 5% Balance-Transfer Fee
• No bonus categories
• Potential for A High Regular APR
• 3% Foreign-Transaction Fee

The most significant drawback of the Chase Freedom Unlimited® Credit Card is the 5% balance transfer fee.  The most widely used fee is 3%.  This fee becomes more significant the more debt you are transferring.  For instance, if transferring just $1,500, you’re paying an extra 2% which is only $30.  But if transferring $8,000, the higher fee will cost you $160.  That’s real money, and since consumers are utilizing a balance transfer card specifically to pay down debt, this is money that would be much more effective going against the debt balance rather than being lost in fees.   For interest on new purchases or debt that has not been paid off, you will bay anywhere from 16.24% to 24.99% (variable) depending on your credit score.  Like all balance transfer cards, this is high.  You’ll probably be paying more than the 22.28% average for “fair credit” cards or the 13.89% average for “excellent credit” credit cards and certainly more than a personal loan.  So as with any balance transfer card, you MUST pay off your existing debt during the introductory period to save money.   Please do not transfer an existing balance to Chase Freedom Unlimited® Credit Card. You can get a 0% rate for the same length of time without even paying a fee or a much longer rate for less with a different card. Yes, this card offers 0% for the first 15 months, but its 5% transfer fee ruins things.

The Summary

As stated, the 5% balance transfer fee is the big downside of this card.  But does paying the 5% make sense sometimes?  Yes.   Generally speaking, we’d say it makes sense if you are transferring less than $4,000 in existing debt, do not anticipate future issues paying the current debt down over the next year, and will be using the card on every day purchases.  But if you have a larger amount of debt to transfer, this 5% fee will really add up.  Likely, if you only want to use this card to transfer the debt and not on day-to-day purchases (which is how we recommend that MOST people use a balance transfer card), then the 1.5% rewards is of no value to you. So while the Chase Ultimate Freedom is a solid balance transfer card, it is really only a solid option for a small group of people most likely just below or right around the 700 credit score range.