One thing I hear a lot from fellow points and miles collectors is, “If you’re not earning miles, you’re better off charging your spending to a 2% cash back card.” This includes credit cards like Citi Double Cash and Fidelity Rewards Visa. These cards don’t carry an annual fee and earn a flat 2% cash back on everything. But is it really the best way to go if you want to earn generous rewards without paying an annual fee? That’s where the Chase Freedom Unlimited comes into the picture.
|
Citi® Double Cash Card
Add to Favorites
|
$0 first year
$0 after first year |
No Sign-Up Bonus - Read Review » |
|
Already have this card? Track it and maximize your rewards.
|
|||
|
|
Citi® Double Cash Card |
|||||
| Apply Now Add to Favorites | ||||||
|
||||||
| Read the FTG Review » | ||||||
|
Chase Freedom Unlimited(SM)
Add to Favorites
|
$0 annual fee
|
$150 Bonus After you spend $500 on purchases in your first 3 months from account opening Read Review » |
|
Already have this card? Track it and maximize your rewards.
|
|||
|
|
Chase Freedom Unlimited(SM) |
|||||
| Apply Now Add to Favorites | ||||||
|
||||||
| Read the FTG Review » | ||||||
The Chase Freedom Unlimited was introduced earlier this year as an alternative to the Chase Freedom card. It earns a flat 1.5% cash back on all spending and has no annual fee. The best part? If you have another Ultimate Rewards earning credit card (i.e. Sapphire Preferred, Sapphire Reserve, or Ink Plus), you can convert these cash back earnings to Ultimate Rewards points. The question here is whether 1.5 Ultimate Rewards points are worth more than 2% cash back. Depending on how you use them, they certainly can be.
|
Chase Sapphire Preferred® Card
Add to Favorites
|
$0 intro first year
$95 annual fee |
Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $625 in travel when you redeem through Chase Ultimate Rewards® Read Review » |
|
Already have this card? Track it and maximize your rewards.
|
|||
|
|
Chase Sapphire Preferred® Card |
|||||
| Apply Now Add to Favorites | ||||||
|
||||||
| Read the FTG Review » | ||||||
Combing Chase Freedom Unlimited with Sapphire Reserve
As we all know, Sapphire Reserve cardholders can use their points at the Ultimate Rewards Travel Portal at a value of 1.5 cents each. By this valuation, those 1.5 Ultimate Rewards points are worth 2.25 cents each, meaning by charging your non-category spending to the Chase Freedom Card, you’re earning 2.25% cash back. That beats any other cash back card and you don’t have to pay an annual fee.
Combing Chase Freedom Unlimited with another Ultimate Rewards Card
If you don’t have a Sapphire Reserve card, your Ultimate Rewards points are worth 1.25 cents each towards travel. That makes 1.5 Ultimate Rewards points worth 1.875 cents each towards travel. So by redeeming points earned from the Chase Freedom card at the Ultimate Rewards Travel Portal, you’re earning around 1.9% cash back. Not as great as a 2% cash back card, but it could still be worthwhile if you find good travel deals.
Transferring Rewards from Chase Freedom Unlimited to Travel Partners
Transferring Ultimate Rewards points to a travel partner is a great way to get maximum value out your points. Depending on how your value your points and which transfer partner you choose, this can get you rewards worth way more than a 2% cash back card.
With Hyatt points valued at 1.5 cents each, your 1.5 Ultimate Rewards points are worth 2.25 cents each. Even with United miles conservatively valued at 1.4 cents each, you’re looking at 2.1 cents worth of miles for every $1 spent on the Freedom Unlimited card. Of course, it also depends on how you redeem your points and miles – premium awards can be worth way more than that 2% earned from a cash back card.
It’s all about how you redeem your rewards, but in many cases, the rewards earned from the Chase Freedom Unlimited card can be worth much more than 2% cash back. You get the same $0 annual fee and more flexibility when it comes to redeeming rewards.
What do you prefer: A 2% cash back card or the Chase Freedom Unlimited?
[Image via Getty]