Card News: New Chase Freedom Flex & Updated Freedom Unlimited
A couple days ago, Chase unveiled a new credit card called the Freedom Flex that will replace the current Freedom, while also releasing plans to revamp the existing Freedom Unlimited, both rolling out on September 15, 2020. This is super interesting because it suggests that Chase is planning on bringing more updates to their existing suite of products, which in turn may cause a ripple effect of other credit card issuers refreshing their offerings.
The beloved and ubiquitous Chase Freedom Card will soon close its doors to new applicants
Signup-Bonus, Multipliers, and Benefits
Both the Chase Freedom Flex and Freedom Unlimited will offer a signup bonus of $200 after spending $500 within three months of account opening. Given that the spending requirement is only several hundred dollars, this bonus probably won’t get much higher if at all in the future.
Regarding multipliers, the Freedom Flex looks to be an upgraded version of its predecessor. The card will earn the following bonuses:
5% back on rotating quarterly bonus categories, up to $1,500 in combined purchases
5% back on travel purchases through Chase’s Ultimate Rewards portal
3% back on dining, including takeout and delivery services
3% back on drugstore purchases
1% back on all other purchases
Unlike Chase’s other core offerings, the Freedom Flex will be a World Elite Mastercard, for which some of the benefits include the following:
Cell Phone Protection - Up to $800 per claim and $1,000 per year, covering phone theft and damage. You will have to pay your phone bill with the card and can file up to two claims in a 12-month period, each claim costing a $50 deductible.
Lyft Credit - After taking five Lyft rides in a given month, cardholders will receive a $10 credit that will be automatically applied to their balance.
Boxed Benefit - Cardholders earn 5% back in cash rewards for all Boxed orders.
Car Rental Discounts - Up to a 25% discount when renting a vehicle with Avis, National, or Sixt.
Fandango Discounts - After purchasing two movie tickets, cardmembers receive a $5 coupon towards any future movie ticket purchase, also applicable towards home rentals.
Having a quarantine movie night at home? Use the Freedom Flex to earn a Fandango discount towards your next rental!
There are some other benefits that The Points Guy does a great job summarizing in their write-up, including some less substantial perks. Based on all the perks and benefits offered by the new Chase Freedom Flex, it seems nonsensical for members to hold onto their old Freedom cards since the new iteration offers the same benefits plus so much more.
The Chase Freedom Unlimited will also undergo some exciting changes, but while retaining its original moniker. Currently, the card earns a flat 1.5% back on all purchases, which is no longer as competitive when compared to Citi’s Double Cash or the Apple Card. The new Freedom Unlimited will earn the following:
5% back on travel purchases through Chase’s Ultimate Rewards portal
3% back on dining, including takeout and delivery services
3% back on drugstore purchases
1.5% back on all other purchases
As you can see, the multipliers are very similar to the Freedom Flex, with the only difference being whether you prefer rotating 5% quarterly bonus categories or a flat 1.5% back on all purchases. It’s exciting to see these popular no annual fee cards receiving significant upgrades. However, what does this mean for Chase’s premium credit cards?
What will happen to Chase’s premium offerings, such as the Sapphire Preferred and Sapphire Reserve?
The Chase Sapphire Reserve (CSR) earns not only 3X back on dining and travel purchases, but also 1.5 cents per UR point when you book through Chase’s travel portal and even greater values when transferring those points to various airline and hotel partners. However, even with the introduction of the Freedom Flex and revitalization of the Freedom Unlimited, the CSR will earn the same 3X on dining and travel purchases. Even worse, both the Flex and Unlimited will earn greater multipliers (5X) when booking through the travel portal, compared to CSR’s current 3X rate. This doesn’t make much sense from a cardholder or issuer standpoint since these newly updated cards don’t come annual fees while the CSR demands $550 per year.
Why I’ll Still Keep the Chase Sapphire Reserve… For Now
One of the main reasons why heavy travelers keep the CSR despite its hefty annual fee is due to its other amenities, including primary rental insurance and excellent trip cancellation and delay coverages. Hopefully, you won’t ever have to use these benefits, but when something does happen, these policies can really save the day. I presume the Freedom Flex won’t come with the same level of coverage, and by booking trips using the travel portal, you are forgoing any loyalty rewards for hotel and airline brands. You won’t be able to chase elite statuses and trip cancellation can become more cumbersome since travel reservations using Chase’s portal are considered OTA (Online Travel Agency) bookings similar to Expedia. Lastly, when you use OTAs, your rate is not guaranteed to be the lowest available rate, sometimes even seeing slight inflation. Taking into account these complications, is the extra 2% back on purchases through the travel portal really worth giving up the coverage and relationship with specific hotel and airline brands?
I am four nights away from earning Marriott’s Titanium status, and I couldn’t have done it if I used OTAs.
The answer is it may depend. For me, that extra 2% is not worth the hassle, especially because I’ve already committed to brands like Delta, Marriott, and Hilton; I plan on growing my points and miles portfolio as well as earning elite statuses to maximize my returns in the long run. Additionally, the slightly inflated travel portal rates may partially or even completely negate the extra 2% saved using the new Freedom cards. However, every cardholder is different, and if you travel infrequently and/or prefer to use OTAs like Hotels.com or Expedia, the new 5% earning rate may entice you enough to use your new Flex or Unlimited for future travel purchases.
My Prediction for Upcoming Changes to the Premium Card Lineup
Even after these confirmed changes, Chase has still not mentioned or added a permanent grocery multiplier. According to the Bureau to Statistics, an average American family of four spends more than $7,700 on groceries and dining out. One of the reasons why the American Express Gold Card has been so successful despite its $250 annual fee is that it earns 4X Membership Rewards (MR) points back on groceries and restaurants. With the updates to the Freedom card lineup, I can only speculate that more changes must come to the Sapphire series, and I believe one of the new multipliers may be 3X back on grocery stores. I also cautiously predict that the Sapphire Reserve will receive increased travel multipliers, earning 5X UR points on airfare and hotel stays to compete with the American Express Platinum Card. These days, the Chase Sapphire Preferred and Sapphire Reserve have remained competitive but are no longer at the top of the pack; I hope Chase will bring new surprises to the market and offer refreshing updates in the near future.
Earning 3X or 4X UR points at grocery stores will change the game.
Summary
It’s always good to see new products arrive to the market, but it’s especially exciting to see quality products get even better. The Chase Freedom and the Freedom Unlimited cards have been workhorses in many people’s wallets including mine. Whenever I encounter a purchase that does not fall into a specific multiplier, I use my Freedom Unlimited to earn UR points. Now with the Freedom becoming the Freedom Flex offering additional lucrative multipliers such as 3X back on dining purchases, the no annual fee credit card market has gotten much more competitive. The Freedom Unlimited joins the fray as well with a 3X back on restaurants and drugstore expenses. This restructuring makes Chase’s premium cards now look a little underwhelming, which could mean that Chase will roll out new multipliers and benefits for these offerings in the near future. Overall, I’m happy to see popular no annual fee cards getting more substantial multipliers, and I believe their position in everyone’s wallet has become more permanent than ever.
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