Chase Freedom Card: No More 3% Rewards?
Nov 09, 2008 
Sun
Credit card companies are downgrading their rewards programs. Chase Freedom Card is the latest card reducing its cash back rewards.
Nowadays, good credit cards with generous rewards (relatively speaking of course) are rare. And good cards can go bad, as the Citi Dividend Platinum Card did a while ago.
That’s what happened to Chase Freedom Card, one of my favorite credit cards that I have been using for more than a year to earn 3% cash back at grocery stores and gas stations. Now, it seems that the card’s rewards program just got downgraded to a program that’s like just any other rewards program: 1 points for every dollar! No more triple points! No more top 3 categories! If you go to the card’s rewards page, you will find the following:
When I first noticed that Freedom card switched from cash bonus to rewards points in July, it was still offering triple points for every dollar spent in the top 3 out of 15 categories every month. But now there’s no such thing as triple points. You earn 1 point for every dollar, no matter where you use your card, like how most other credit cards reward its card members. In addition, the new program allows you to earn”3x points with new bonus offers throughout the year. Plus earn up to an additional 10 points per $1 spent when you shop through our online mall at Chase Rewards Plus.” While the card still offers a $50 bonus for new card holders after the first purchase, the overall benefits of this card are not as good as they used to be.
However, for existing cardholders, things may be a little bit different. When I first got the Freedom card early last year, the rewards were given as cash back rewards, not rewards points. When the program switched to rewards points this summer, I didn’t make the change to my card (there’s a link in my account that I can use to switch how I earn rewards). So I am still getting cash back rewards, as the following screenshot of my October statement shows:
If you are interested in getting this card, you can use this link to apply for it. The application page still show 3% bonus cash back rewards, but only for the first 6 months:
Cash Back Rewards described in this offer is a form of rebates subject to the Rewards Program Rules and Regulations; see Earning Rewards section. Restrictions and limitations apply. You will earn a 1% base rebate for each $1 of net purchases. For the first 6 billing cycles from your Enrollment Date in the program, you will also earn an additional 2% bonus rebate for each $1 of eligible net purchases made at retail establishments that classify their merchant location for Visa/MasterCard in one of the following bonus categories: gas station, grocery store, quick service payment/fast food restaurant. (“Enrollment Date” is the day on which we approve you as a program member.)
Alternative Cards
I am glad that I didn’t make the switch so I can still earn 3% cash back on gas and grocery purchases. How long can I still enjoy the 3% rewards? I don’t know. I wouldn’t be surprised if one day my card earns me the same level of rewards. If they eventually decide to downgrade my card as well, then I will just give it all up, like I did with the Citi Dividend card. In that case, I will abandon this card and use the following instead:
- American Express Costco TrueEarnings Card: This card allows cardholders to earn 3% cash back on all gas purchases. The problem is not every station accept AMEX. The TrueEarnings card also gives back 3% bonus for restaurants, 2% for travel, and 1% everywhere else including at Costco.
- Fidelity 529 College Rewards Card: I can earn 2% cash back on everything with this card. The new version of this card (from AMEX) only offers 1.5% instead (I am glad I didn’t switch). Cash rebates will be invested in a Fidelity 529 plan.
You’re right, Sun, but like you said, Chase isn’t the only one pulling back on the rewards. Almost every major card company has reduced rewards, either pulling cards off the market entirely or changing the terms for new customers. It’s all a reflection of the bigger economic problems, and especially all the problems banks are having right now with defaulting customers.
Yes, it didn’t surprise when I saw the rewards program got downgraded, though I really hate it because I use the card a lot. It seems to be a general trend that card issuers scale back their rewards programs and increase their interest rates. Right now, credit card companies don’t have the desire to offer above-the-average rewards because everybody is cutting back.
I seriously hope I do keep my rewards, the 3% in the top category was a major plus to me. Which is the reason why I began using the card for my daily purchases, instead of my atm card or cash. Even if it is only 1% per dollar, I guess I would still use it, because I don’t see any point migrating to another card if that company ends of changing their reward program.
Regardless, I really do love chase’s web interface and customer support.
Daniel: The reason I don’t plan to use the card any more if the rewards indeed go down to 1% is all the cards have 1% rewards on everything, so there will be nothing special with Chase Freedom. So I’d rather use a card that gives me 1% in the first place than using one that downgrades the rewards from 3% to 1%. I just don’t like it, no matter how good the card used to be.
Sun: I couldn’t agree more, Unfortunately I am trying to get to their magical $200 rewards line so I can earn that extra $50 (taking forever, curse my frugality). Unless they cut that too, then I’m going to cry -=(
I am very close to the line (more than $180 already). I have to check if that $200 for $250 is still available. Hopefully, it is
They must be slowly phasing this in, or only targetting customers who get too much back – I just got my notification yesterday that I’m losing my top three and the $50 bonus
Just got a letter in the mail that states:
“Note: The $50 bonus when redeeming $200 in Cash Back Rewards will no longer be available after June 30th.”
Lame. Between CapitalOne jacking my interest rate on my rewards card from 8.9% fixed to 18.99% and Chase killing their rewards, there’s just not much to look forward to anymore.
Steve, I’m on the same boat. Except CapitalOne jacked my interest from something like 1.9% to like 29.4% I couldn’t help but laugh, and didn’t care much because I never used the card. It was MEANT for emergencies because I got it for the low rate… but oh well…
As for Chase… It was eventually going to happen, luckily I have already hit my $200 rewards and got my $250, now i’m in the process of phasing out using credit cards and going more of a cash only approach. I think the only credit card I still actively use is the card I set for business expenses, all the others carry a $0 balance.
Which I have to admit I am digging the Schwab Credit Card… seeing money going into my Brokerage account is a sweet deal