Saturday, September 13, 2008

Chase Freedom Reward Credit Card

The Chase Freedom Reward Card is a highly recommended card for low to moderate spenders who are looking to earn healthy rewards by using their credit card on most purchase. The Chase Freedom Card essentially offers you 1% cash back on all purchases and an extra 2% (so a total of 3%) in your top 3 categories of purchases. The available 15 categories are:

1. grocery stores

2. gas & convenience stores

3. quick service payment/fast food restaurants

4. telecommunications

5. cable/satellite TV/Internet service providers

6. video rentals

7. department stores

8. dry cleaners

9. drugstores

10. movie theaters

11. local and suburban commuter passenger transportation

12. pet supply stores and veterinary services

13. utilities

14. beauty salons and spas

15. gym/recreation memberships

What’s best about this card is that as your purchasing patterns change your rewards also change without you having to worry about which one of your rewards card to use! This is great since it helps you be prepared for the unexpected such an illness (drugstore rewards) or a pet emergency (veterinary services rewards).

Sounds too good to be true? Yes,this card is NOT ideal for high spenders. Chase limits the bonus rewards in the top 3 categories to only $600 of spend. Of course you could have multiple credit cards and switch to a different card once you spend $600 in your top categories, but it probably is not worth the time it takes to track your expenses.


The Discover Cashback Card offers5% in categories predefined by Discover Card that rotate every month. For example, In January – March of2008 the Discover Cashback Bonus card offered 5%rewards for airlines, cruises, hotels, and car rentals. If you didn’t use any of these services in the first quarter of the year it was your loss. Flexibility is the best reward with Chase Freedom since it really does give you the freedom to earn where you spend the most.

Falling Sign up bonus?

What’s better than a credit card that offers high rewards? A card that pays you to sign up and offers great rewards! Right now, Chase is offering $50 for anyone who signs up and qualifies for the card. Unfortunately, the $50 is not what Chase used to offer for the card. About a year and a half ago when the card was new and not heavily marketed there was a link on the forms that offered $250 for signing up for the Chase Freedom Credit Card! Over time, the sign up reward fell to $150 and then it’s present state of $50.

I believe Chase has a target customer acquisition cost of about $250. As Chase started to advertise on traditional media such as TV, their customer acquisition costs went into raising awareness about the card. As a result, the instant reward Chase could offer consumers plummeted. I’d guess that for every new customer, Chase is now willing to spend up to $200/new customer on traditional media or through an affiliate program.

Do you get your money from Chase?

I’ve heard some stories about Chase making it extremely difficult for new customers to claim their reward for signing up for the card. Customers should be sure to print the offer and keep it on file until they receive their reward from Chase.