Chase Freedom Categories Explained | NextAdvisor with TIME

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The Freedom Flex and Freedom Unlimited cards from Chase offer some of the highest potential savings on your everyday spending among cash back cards available today — plus they have no annual fee and offer valuable redemption options through the Chase Ultimate Rewards program.

But to really maximize your everyday purchases, especially with the Flex and its rotating rewards categories, it’s important to keep up with the many bonus categories in which you can earn cash back. Familiarizing yourself with the categories, their limitations, and how often they change can help ensure your budget and spending aligns with your rewards.

Pro Tip

Chase only releases rotating 5% bonus categories for the Freedom Flex card one quarter at a time, but you can use past categories as a guide to help determine whether you’ll be able to maximize the bonus based on your regular spending.

To help you keep track, we’ve broken down rewards categories for both the Chase Freedom Unlimited and the Chase Freedom Flex, starting with the rewards bonuses the two cards share, and then the individual categories that set them apart.

Chase Freedom Unlimited and Freedom Flex, while offering great rewards on everyday spending, both carry variable APRs from 14.99% to 23.74%. Carrying a debt balance at those high-interest rates will swiftly eliminate any cash back bonus. Before seeking rewards on your spending, make sure you eliminate existing credit card debt, establish good credit habits, and commit to paying down your balances in full each month

Chase Freedom Categories

  • 5% first-year cash back at grocery stores
  • 5% cash back on travel booked through Chase Ultimate Rewards
  • 3% cash back on dining and at drugstores
  • Chase Freedom Flex rotating categories
  • Chase Freedom Unlimited flat cash back
  • Chase Freedom rewards example

5% Cash Back Grocery Store First-Year Bonus

Chase Freedom Unlimited and Chase Freedom Flex both have current cash bonuses of $200 after you spend $500 on purchases within three months of account opening. In addition to this standard cash bonus, you’ll also earn 5% cash back up to $12,000 in purchases at grocery stores within the first year.

You can max this category out with about $1,000 in grocery spending each month, which would earn an extra $600 in cash back over your first year of card ownership.

Chase includes supermarkets and smaller grocery chains among eligible grocery stores. Since merchant codes are determined by the products that make up the majority of a merchants’ sales, your regular purchases at Kroger or Whole Foods Market will generally count toward the bonus. Grocery delivery orders may also — if the delivery service classifies as a grocery store merchant. But fueling up at gas stations associated with grocery chains won’t count, according to Chase. Target and Walmart purchases also do not apply, and warehouse clubs like Costco are typically ineligible under grocery categories.

5% Cash Back on Travel Purchased through Chase Ultimate Rewards

Chase recently expanded Freedom Unlimited and Freedom Flex rewards with new ongoing, tiered rewards categories, including an unlimited 5% cash back offer on travel booked using your Freedom card through Chase Ultimate Rewards.

This category includes everything from plane tickets to hotel stays, car rentals, cruises, and vacation rentals. 

3% Cash Back on Dining and at Drugstores

In addition to travel, the newly-expanded Chase Freedom rewards categories include an unlimited 3% bonus on dining and drugstore purchases.

Chase’s dining category is broad; everything from fast food to fine dining counts, as well as takeout and eligible delivery services. Eligibility is determined by the category merchants classify their sales under when you swipe your card, which means your breakfast scone from the local coffee shop or halftime hot dog from your city’s stadium may count toward the bonus as well, depending on how the individual merchant categorizes purchases. Chase offers descriptions of each rewards category, but the best way to find out a merchant’s category is by looking back at the purchases on your credit card statement to see exactly how the merchant description is coded. 

Pro Tip

Chase offers Freedom cardholders access to a three-month complimentary DashPass subscription (good for $0 delivery fee on eligible orders over $12) for DoorDash and Caviar followed by a 50% discount for nine additional months. Enroll in this benefit to save even more on your food delivery orders.

Eligible drugstores can range from nationwide chains to your local drugstore. However, like the grocery category, Chase specifies that your purchases with onsite pharmacies at warehouse clubs like Costco or big box stores like Target do not count toward the bonus.

Chase Freedom Flex Rotating Categories

In addition to the above tiered rewards categories that apply for both cards, Chase Freedom Flex earns 5% cash back on rotating bonus categories each quarter. Unlike those unlimited categories, though, the 5% rate on rotating categories is capped after you make $1,500 in purchases per quarter. That means your quarterly cash back reward limit in this category is $75 each quarter. 

Here’s a rundown of 2020’s Chase Freedom categories and the 2021 categories we know so far:

2020 Categories 2021 Categories
Q1: January – March Select streaming servicesInternet, cable, and phone services Gas stations Select streaming servicesInternet, cable, and phone servicesWholesale clubs
Q2: April – June Select streaming servicesGym memberships and fitness clubsGrocery stores Not yet announced
Q3: July – September Whole Foods Market Not yet announced
Q4: October – December WalmartPaypal Not yet announced

Note: The Chase Freedom Flex card was released in Sept. 2020. Categories listed before that date applied to its rotating rewards predecessor, the Chase Freedom card. Current categories also apply to legacy Chase Freedom cardholders.

You must manually activate the bonus category each quarter to earn the 5% rate. You can begin activating next quarter’s categories when they’re announced and you’ll have until the deadline later in the quarter to do so. But if you forget to activate early, don’t worry. As long as you activate the bonus by the deadline, any eligible purchases made throughout the quarter will still earn the bonus rate.

And for any additional purchases that don’t fit into the above categories, you’ll still get 1% cash back on everything else you buy with the Chase Freedom Flex.

Q1 2021: Wholesale Clubs, Streaming, and Internet 

Like last year’s first quarter, select streaming services as well as internet, cable, and phone services will earn the 5% Chase Freedom Flex bonus beginning in January 2021. But this year, wholesale clubs are also included in Q1’s bonus categories.

Qualifying streaming services may vary, but in previous quarters Disney+, Netflix, Hulu, Sling, Vudu, FuboTV, Apple Music, SiriusXM, Pandora, Spotify, YouTube TV, and ESPN+ have all counted toward the bonus. Monthly payments to your internet, cable, and phone provider will earn 5% cash back for the next three months, too.

If you’re a dedicated Costco or Sam’s Club member and want to stock up on bulk items early in the year, you’ll also enjoy this quarter’s 5% bonus at wholesale clubs (excluding gas and specialty services such as travel, insurance, and cell phones).

Activation begins Tuesday, Dec. 15 and applies to your spending between Jan. 1 and March 31, 2021.

Chase Freedom Unlimited 1.5% Flat Cash Back

While it doesn’t have the benefit of rotating rewards categories, Chase Freedom Unlimited makes a potentially even more lucrative proposition: on top of the above tiered bonus categories, you’ll earn a flat 1.5% cash back on every other purchase.

Chase Freedom Rewards Example

Let’s say you use your Chase Freedom Flex or Chase Freedom Unlimited card for the majority of your family’s everyday purchases, and spend an average of $20,000 with the card annually. By rewards categories, we can break that spending down to $10,000 each year on groceries, $3,000 on dining out, $2,000 at drugstores, and an additional $5,000 on everything else. On average, you estimate your eligible spending in rotating Freedom Flex bonus categories to total about $500 per quarter. 

Here’s how that spending would translate to rewards using the Chase Freedom Flex versus the Chase Freedom Unlimited your first year of ownership:

Category Rewards Rate Chase Freedom Flex Chase Freedom Unlimited
Groceries 5% (first year bonus rate) $500 $500
Dining 3% $90 $90
Drugstores 3% $60 $60
Rotating Categories (Freedom Flex only) 5% (up to $1,500 each quarter, then 1%) $100 N/A
Everything Else  1.5% for Freedom Unlimited1% for Freedom Flex $30 $75
Total $780 $725