Chase Freedom Card – Pros and Cons

The Chase Freedom card has put a great deal of effort into its advertising campaign. It seems as if you can’t turn on the television without seeing one of their commercials, which depicts cardholders happily walking through different aspects of life and spending away with their cards. But I thought I’d take a closer look at the pros and cons of the Chase Freedom card.

The greatest perk to the Chase Freedom card is the fact that it automatically adjusts to your spending habits and rewards you with a 3% cash back bonus toward the purchases that you make the most often during the month. The concept behind this card is great, since you don’t have to play games with your rewards cards and use specific cards for specific types of purchases. Unfortunately, there is some fine print with respect to how the rewards are counted on the card – just as with any card – that makes the Chase Freedom card a bit less desirable than at first glance. Therefore, it is important for you to be fully aware of what you are getting into before you apply for this card.

For starters, there are 15 very specific categories that are eligible for the bonus rewards points, of which you will receive the bonus for the top three categories for your personal spending habits.

Unfortunately, there are many exceptions when it comes to categorizing your purchases and determining which ones are eligible for the bonus. For example, purchases made at grocery stores are eligible for the program, but those that are affiliated with superstores, discount stores, and warehouse clubs are not eligible. Similarly, while gasoline purchases are eligible for the extra rewards, car repairs are not and neither are travel expenses. Furthermore, purchases made at fast food restaurants can earn the bonus points, but purchases at up-scale sit down restaurants are not eligible. Of course, you will likely spend more at these fancier restaurants, so that can significantly decrease your bonus rewards if you dine out on a frequent basis. Furthermore, online purchases are not eligible for the bonus rewards in any way.

This is not to say that the card is no good at all. You will still receive a 1% rebate on all of your other purchases, but earning the bonus rewards is not as easy as it may seem at first. In addition, there is a cap on how much money you can earn back with this special bonus. In fact, the bonus is only good for the first $600 of eligible purchases you make each month. This equates to $12 of extra bonus rebates if you make $600 worth of purchases in eligible categories.

If you are carrying a balance on the Chase Freedom card, you likely won’t benefit from the rewards program at all. This is because the adjustable interest rate is variable and is based on the prime plus 9.99%. In addition, the default rate is 32.24% and could kick in if you are late on a single payment or if you go over your credit limit at any time.

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This entry was posted on Friday, October 12th, 2007 at 5:38 pm and is filed under Credit Card News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.