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I’ve written about the Chase Freedom credit card lately since they are running a limited time offer where you’ll earn 20,000 points after spending $500 on the card within the first 3 months. The huge benefit of the card is that you can earn 5x points on quarterly rotating categories. Throughout many of the posts I refer to the bonus points as 5x points and not 5% cash back (as it is referred to on the Chase Freedom site).
While I’ve written about this confusion before in the past, but it was awhile ago so I wanted to re-bring up this topic for new readers. So here you go…
There are many Chase Ultimate Reward earning cards – for example, Chase Ink Bold, Chase Ink Plus, Chase Sapphire, Chase Sapphire Preferred, Chase Ink Cash, Chase Freedom. With all the cards you earn Ultimate Reward points, however, the type of account it is determined on how you can actually redeem those points. The Chase Ink Bold, Chase Ink Plus, and Chase Sapphire Preferred are the only three cards that actually allow to you transfer your points directly to a partner loyalty program (hotel/airlines/train).
So when you have the Chase Freedom card, you earn Ultimate Reward points where you CANNOT transfer your points directly to a loyalty program. Most people redeem those points by requesting cash back. For every point you will get 1 cent cash back. So 5x points is the same thing as 5% cash back. The cash back does not just automatically get sent to you each month and you actually need to request the points to be redeemed for cash back.
Instead of redeeming for cash back though, you can instead transfer those points from your Chase Freedom account into your Chase Ink Bold, Chase Ink Plus, or Chase Sapphire Preferred account (if you have one of those three credit card accounts). This will then allow you to transfer your Chase Freedom points to a loyalty partner, potentially getting you a better redemption for your points then a fixed amount of cash back. You used to be able to transfer your points to a friends account and then have them transfer them to your loyalty program account, but Chase has started to crack down on this and close accounts, so be warned. They do, however, allow you to transfer points freely between accounts in your name and in a spouse/partners name. If you do not currently have a Chase Ink Plus, Bold, or Sapphire Preferred account you can also save your Chase Freedom points for awhile and once you get one of those accounts (if that is how you want to redeem your points) you can then transfer your points between accounts. The Chase Freedom points will not expire so you do not need to redeem them monthly.
I hope this helps with the 5x points vs. 5% cash back confusion that many have. I know many have their own way of thinking about it, but this is my thinking process!
Chase Freedom Credit Card Limited Time Offer: There is currently a limited time offer for this card. The current offer will give you 20,000 points after spending $500 on the card within the first three months. You can read more about this offer in this prior blog post. Application Link: Chase Freedom®
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