Chase Freedom Card Review

• People who want to earn cash rewards on their credit card spending.

Pros

• Higher than average cash back rewards.
• Rewards can also be redeemed for merchandise, travel, and gift cards.
• Unlimited rewards that never expire.

Cons

• You must sign up to get the 5 percent cash back premium.
• High balance transfer fee (5 percent).

Rewards

• 1 percent cash back on all purchases; 5 percent back on purchases in specific categories (e.g. gasoline, groceries); up to 20 percent back at Chase merchant partners.

APRs

• 0 percent for first six months on purchases, first 12 months on balance transfers.
• 12.99 percent to 22.99 percent after introductory period, depending on your credit history.
• Penalty interest rate: 29.99 percent.

Fees

• No annual fee.
• Late payment fee: $15 to $39.
• Over the limit fee: $39.
• Return check or payment fee: $39.
• Balance transfer fee: 5 percent of balance.

Credit Rating Required

Fair to Excellent (660+)

The Chase Freedom Card, introduced a few years ago, is Chase's answer to the Discover Card. However, instead of the "up to" 1 percent cash back that Discover pays, Freedom pays a full 1 percent back from the first dollar of spending. Also, since it's a MasterCard or Visa card, it's accepted at more places than Discover and American Express.

You can earn 5 percent back on spending in selected shopping categories that change every quarter. For example, in a recent quarter, you could earn 5 percent on spending at drugstores and home improvement stores. However, to get that bonus, you must proactively sign up with Chase, either by phone or online (Discover has a similar program).

Cash rewards can be redeemed for as little as $20 (same as Discover); they can also be redeemed for travel, gift cards, and merchandise.

Chase Freedom Card includes Chase's new Blueprint program, which allows you to pay off some of your purchases without incurring interest while setting up a payment plan for the rest.

I would recommend the Chase Freedom Card to those looking for a cash-back rewards card. However, avoid carrying a balance on this card. Never carry a balance on the same card where you're trying to earn rewards - you'll just wind up increasing the size of your balance, which will only increase your finance charges, more than wiping out any rewards you earn.

Also, the five percent balance transfer fee on this card is very high - most other banks charge only 3 percent. On a balance transfer of $5,000, that's a difference of $100.