The Fall of Chase Freedom – Continued Commentary
Posted 21 May 2009 by Mr. B
If you have a Chase Freedom card, you have likely received a letter from them touting some upcoming improvements to your account. I received my letter a little over a week ago, and I giddily responded here.
The main highlights are that Chase is tossing aside the 3% cashback scheme for set categories (such as groceries and gas) in favor of rotating categories (à la Discover). They’re also nixing the current ability to cash in $200 of rewards for a $250 check, one of the primary benefits of using the Chase Freedom card.
Not long after my previous post went live, a representative from Chase’s External Affairs department contacted me. She asked me to clarify a few points. No, that’s not quite right. She wanted to point out some inaccuracies in the posting so [my] site and its authors have an accurate point of reference about Chase Freedom and its features.
Okay, sure. I’m the only author on this site, and I think I already have a pretty solid grasp of the Freedom card and its fall toward obsolescence. But out of appreciation (and respect) to the Chase representative, I will post her comments here.
About Cash Back
- Earn 1% cash back every day, everywhere, on all purchases with no caps or expiration dates.
I originally wrote that there was no change here, and it’s true, mostly. The base rate of 1% cash back rate is exactly the same as it used to be. According to the Chase representative, cash back used to expire after 36 months. Now, it never expires.
To be honest, I don’t ever remember reading that Chase Freedom cash back used to expire after 3 years. Perhaps it did, so I’ll concede this point, minor as it is. The bigger picture is about the unchanging 1% rate, not the expiration date. That’s how the bullet point starts, after all.
- The triple cash back rewards you earn on gas, grocery store and fast food purchases will no longer be available. However, there will be opportunities to earn 3% cash back in new spending categories throughout the year.
Chase offered no defense as to why the original categories are disappearing, but took offense to the obvious comparison to Discover Card, which already offers 5% cash back in rotating categories per quarter.
Chase’s comment: With Discover, they typically have very low quarterly spending caps of $400, so the customer can only earn a bonus $20. With Chase Freedom, our quarterly spending caps are at least $1200, so even at 3%, the customer can earn $36 in bonus cash back. Also, please remember that with Discover, the customer only earns .25% on their first $3,000 in annual spend, and then 1% for the remainder of the year. With Chase Freedom, you always earn 1% on all purchases no matter what your annual spending level is.
About the Online Shopping Portal
- Continue to earn up to an additional 10% cash back when you shop online at www.chase.com/rewardsplus.
In the previous article, I made another obvious comparison – Chase Rewards Plus versus ShopDiscover. Both are online shopping portals that offer additional cash back by clicking through their respective sites. I also pointed out how Chase Rewards Plus has existed for a long time and therefore should not be considered a new feature or improvement of the new Freedom card. Once again, Chase offered no defense as to how Rewards Plus is suddenly a new improvement, but only to the obvious Discover comparison.
Chase’s comment: With Chase Freedom, we also have merchants that earn up to 20%. However, we wanted to give customers a more realistic picture of what they could earn, instead of touting the few merchants (such as Teleflora, Vistaprint and ftd.com) that earn 20%. The overwhelming majority of merchants in Discover’s program only earn 5%. Discover has just over 100 merchants in their program, whereas with Chase Freedom, there are over 300 merchants participating.
About Pay Yourself Back
- Pay Yourself Back – by making a purchase with your Chase Freedom credit card and redeeming it for a credit to your account.
In the previous article, I only pointed out how this is not a few feature.
Chase’s comment: However, the minimum redemption amount for this item was $150 and has now been reduced to $25, so customers can take advantage of this option much more quickly.
Okay, fair enough. For people who actually use this feature, perhaps it is an improvement.
About Gift Cards
- Get more of your favorite gift cards from Starbucks Coffee, Target, iTunes, and Marriott – starting at just $25.
I made no complaints about this point in the previous article, only continued to bemoan the loss of the extra $50 cash back bonus.
Chase’s comment: We are now offering over 100 gift cards (instead of the limited time only 3-4 gift card choices) to choose from so that the customer has more choices when it comes time to use their Cash Back Rewards.
C’mon Chase, don’t you have anything to say to your customers about the loss of the extra $50 cash back bonus for redeeming $200?
Chase’s comment: ….
Mr. B Bites Back
Here’s my reply:
T##### (the Chase “External Affairs” representative),
First of all, I appreciate you taking the time to contact me. Most of your comments address the comparison of Chase Freedom to Discover, and while you raise some valid points, you’ve missed the bigger picture.
Frankly, I don’t really care if Chase throws out the set 3% cashback categories in favor of rotating categories, nor do I care care about the “realistic picture” of Chase Rewards Plus versus ShopDiscover. As a consumer, I do not care how Chase Freedom compares to Discover AT ALL. I will use whichever card I deem best for a given situation.
What I DO care about is Chase’s blatant disregard for the educated consumer. It’s an obvious insult to us to remove certain key benefits and call it an “improvement.” One primary reason why I applied for the Freedom card was the 3% cashback for groceries and gas. Yes, the removal of these categories stings a little, but I can live without them. I’ll just use a non-Chase card for those categories now. However, calling it an improvement for me is sheer nonsense.
On the other hand, the $250 reward for redeeming $200 was another primary reason why I used this card. Now that I’m almost to the $200 threshold, you remove that feature and then try to tout it as an improvement? Ha! What an insult!
Had Chase admitted something like, “Due to an uncertain economy, we are changing the rewards structure of the Freedom card….” then I would be much more understanding. As it is, stripping away key benefits and lauding them as improvements is infuriating and despicable.
T#####, I realize that these decisions were likely not yours to make, so in no way do I hold you to blame. After all, you’re just doing your job, right? Out of respect for you, I will update the article with your comments, but if you could deliver a message to your boss for me, I would appreciate it.
The message is this: Chase, you are effectively killing the Freedom card with your supposed “improvements.” While stripping away features for the sake of profit is completely understandable from a business perspective, stripping away features and spinning them as “improvements” to the customer reeks of indignation and offense. Rest assured that “on or about June 30″, this consumer will never again use the Freedom card.
Cheers,
Brian
The Aftermath?
What do you think? Too harsh? Not harsh enough?
The overall motto here should be: don’t treat your customers like idiots. If Chase had not tried to convince me that the card changes were good for me, I would likely continue using my Freedom card, but only in the way I use my Discover card – exclusively for the rotating categories. Instead, I won’t use my card AT ALL come June 30.
How about you? If you have a Freedom card, will the upcoming changes affect your usage?
Post Details
- Post Title: The Fall of Chase Freedom – Continued Commentary
- Date Posted: 21 May 2009
- Author: Mr. B
- Filed As: Credit cards
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I’ve been thinking about writing a similar letter and article. I’m not really to upset about losing the $50 or the 3%. Granted those were the reasons I use the card. I do understand though times change and if they cannot afford to do that any more then so be it.
I am a little annoyed at the here is something better tone they are presenting it with. I kinda get gotta put the most positive spin you can you can on it but sorry these changes are not better than what I had.
How will it change things for me? Well first I cashed out my rewards to the nearest $200 so I can get my $50 dollar increment rewards. Other than that it probably means I’ll start using my Costco Amex more often. I get 3% on gas and restuarants, 2% on travel, and 1% on everything else. As for the Freedom Card, it will be relegated to places where AMEX isn’t taken. Maybe not even then – I also have Chase’s PerfectCard which gets me 3% on gas and 1% on everything else (I need to look and see if their are any tiers). I might just use that.
I agree that the Chase Freedom card is just becoming “another” credit card. I’ve never had good feeling about Chase, and this is the only card I have with them, so I’m actively looking for another replacement. Any suggestions?
the Bogleheads are largely recommending either the Schwab 2% card or the Fidelity 2% card.
I don’t know why people go with credit cards with complicated marketing schemes. First of all, I’d certainly recommend American Express Blue Cash card. Certainly this card is not for everyone if you want to maximize your cash back while your spending cap is low. This is the one and only card you will get 5% cash back on gas, grocery and drug stores and 1.5% on everything else. Always remember the catch. You have to spend $6,500 first to get into this cash back tier. Go on to americanexpress.com to find out more for yourself. Better and more realistic yet, figure out a spreadsheet to compare the cash back cards side by side with your last two year’s spending report. You’ll know which card is truly best for you.
I don’t even know where to find the rotating categories. And Chase doesn’t bother to mark it as clear as “DISCOVER”.
Chase has been doing this for years…sending out letters that start off sounding promising (e.g. Exciting changes are coming to your Chase card!) but upon further reading reveal they’re just making things worse. I’m sure they did market research beforehand to indicate that this strategy works with the general public…either that they’re more willing to accept negative changes when they are presented in an upbeat manner, or that they don’t get past the first couple of lines in the letter anyways. But to the educated consumer, it’s just a slap in the face.
Here’s the Program Guide that is currently posted. Don’t know how current the rules actually are, since they are dated 1/15/2009 (which shows that Chase has been busy planning this “improvement” for some time now).
The legal rules on p. 1 don’t match the program description on p. 2. One difference is that the 3% cash back “quarterly bonus rewards” “in popular categories when you enroll …” doesn’t appear at all in the rules. I just verified by phone that Chase no longer (did it ever?) gives 3% back on rotating categories. Another difference is that in the rules (but not in the glossy description on p. 2), there is mention of 2% back on airline travel if you book through their system. Doesn’t seem worth it, given a variety of other 2% cash back cards (Costco Amex %2 on travel, Schwab Visa 2%, Fidelity Amex 2%).
I have a hard time seeing when I would ever use this card. The card I have has had a long evolution of conversions – started as a straight BP card (not a bank card) with high rebates on BP gas. Bought out by FirstUSA, then Chase. Converted at some point to a card that gave 5% back on groceries, gas, and drugstores. That was ultimately “improved” to 3% with top three categories. But now, we’re back to straight 1%. If Chase comes out with a better card, I might convert it again. Otherwise, it will sit in a drawer.
Comments on specific items:
Expiration date on points – they old points did expire. The Ultimate Rewards program says only that new points won’t expire. It doesn’t say whether my old (converted) points will still expire. I tried asking in writing; Chase ignored that part of my note.
Pay yourself back – I’d never looked at this option (perhaps because of the high starting amount, and that one could get $250 for $200 in points). But at $25 (I currently have a $27 balance), I might use it to cash out.
Gift cards – the $25 starting price works in my favor (see above). But generally Discover’s program is better – usually $50 cards for $45 in points.
Amex Blue – Amex has recently “improved” its program, too. On the non-everday (gas, supermarket, drugstore) shopping, the rewards are 0.5% (up to $6500), and now changed to 1.25% (above $6500). Compared with a straight 2% card, you’re losing at least 1% (and up to 1.5%) on the first $6500 of purchases during the year. (That’s anywhere form $65 to $97.50). You have to make that up with purchases above $6500. Only “everday” purchases get more than 2%, even at that level (they still get 5%). So you’ll have to purchase at least $2167 extra of only everyday items to make up the difference. Works for some people. Not for me.
All these plans and the way they’re presented is just marketing hype. One should just use the best card at the time. I’ve been able to use the Chase card for a few years – it started out significantly better than other cards; more recently I limited using it to three categories to maximize cash back. Now I will just leave it alone.
What annoys me is not so much having my intelligence insulted, but the way the rules keep changing before the new program is even implemented, and the nearly total inability to get the accurate terms of the program from Chase. I’ll work with whatever the program is, just don’t make me have to find out by spending money first.
Not much different now than my old Citi Reward card.
Looked an Chase’s website and have no idea what the rotating categories are. So I guess I’ll stop using it until they figure out how to let me know!!!!!!!!!
Thanks Mr. B.
Oddly enough I discovered the (supposed) higher rewards payout with the Chase Freedom card by using the AmEx Blue Cash calculator that is available on their web site. It’s pretty neat, one can adjust various sliders to match expected spending. It then displays a preview of an estimated cash back reward payout, which can then be compared to several popular cards. The Chase Freedom card came out ahead for my spending profile. So I promptly went to the Chase website to see what they had to offer and potentially sign up. I couldn’t find a definition of their “Rotating Category” and so I found your blog. Much appreciated… I would have applied tonight if it was still a good program–which is obviously no longer the case.
It pissed me off quite a bit to see the changes. Why bother calling it “Chase ‘Freedom’”, they should change the name to “Chase ‘the way we want you to spend your money’”.
This change will definetly effect the way I use this card. I used to use it for everything, but now I’m going to find a different card.
Like “JJ” posted earlier, I had a heck of a time finding the rotating categories.
Looked in brochure, all over my online account, all over my online account 2 more times, then finally called customer service and asked what they were.
Customer Service told me the categories vary quarterly & depend on the customer. I will be notifed by mail what they are. I asked if he could tell me or if that is top-secret information. I was then put on hold (figured it was a cop-out but luckily he came back after only a minute). I was told my categories that don’t start till October are: bookstores, electronics, & discount stores.
Of note: he did not specify what stores qualify as bookstores, electronics or discount stores. So I still have no real answer as to where to buy the laptop I was planning on purchasing.
I think I am better off closing this freedom-less freedom card right.
We, also, are amazed that Chase has the nerve to call this an improvement. We had been using that card for all purchases. So, we switched all gas and grocery purchases to another card; but, I have written to them twice to clarify what constitutes a “discount store” and twice they were not able to tell me. I know from my statement that it’s not Walmart or Menards – WHAT IS THE BIG SECRET? National City gives me the catagories right on my statement.
Can you tell me if the $250 for $200 program is back? I just went to redeem this and it still shows available.
Thanks!
I got a letter saying my program was being “improved” at the end of October. (Like I was too stupid to actually read the letter and see I was getting the shaft.) I got a bill on October 28th with a reward balance of $213. Woo Hoo, I got my $250 check in the mail before they pulled the rug out from under my feet! Now I’m surfing around trying to find my categories and see it’s as straight-forward as Discover… By the way, when I got the letter, I called customer service to see if I could stay with my current rewards program and they started quoting the terms they were getting rid of. Acted all dumb like they didn’t know they were getting ready to change the program. Talk about a blatant misrepresentation. Then when I started talking about the new terms, they stopped trying to BS me. Said that I had no choice but to follow the new rewards program… Guess I’m going to have to call them to find out my categories. Thanks for the info here.
Oops. I left out a word. Meant to say it’s NOT as straight-forward as Discover…
anyone notice that the amount of points needed to get a giftcard has gone up? Now it’s 11,000 and some points to get a $25 giftcard to target where as before it was a much smaller amount. I was waiting till I had more points to trade them in. I wish I had done it sooner. Now my points mean nothing.
I’m not surprised at all. I’m completely done with this company. An old WaMu CD of mine is coming due in a few days, and that’s my last Chase account to zero out.
I got my Chase Freedom Bill in November and I had been switched over to a new program. Sometimes when I have told other Credit Cards that I was going to close my account out, they work a deal or add benefits or tell you which card has more benefits. When I told the Chase represenative that I was going to close out my account, he said “okay”. No trying to save me as a customer. The representative had told me that the 3 rotating categories was a different card and that it had an annual fee. Very disappointing. I switched all my automatic payments to other credit cards. And put this one in my drawer to see what happens too until I decide if I want to close it too.
Thanks so much for posting this. I felt the very same way when I received my Chase letter. I called the company to ask about the specifics – and actually read part of the letter they sent me to the representative on the other line – and that person still couldn’t tell me what some of the new conditions meant.
The only issue I have with ceasing to use my card as much is that I think it may affect my credit (long-standing cards seem to have a positive impact on credit). Is that true?
The quarterly 3% bonus is shown when you log in to ultimate rewads- you just put in your last name zip code and last 4 digits of the card and they enroll you. I think Discover’s is similar…bascially you have to know about it to sign up, most people wouldnt bother to check and miss out on the bonus 3%
Right now it’s dining, utilies, education and something else—Oct-Dec was stuff I didnt use so I didnt bother to sign up.
I still tihnk the chase freedom is a good card, I only got it because I signed up for a free chase checking account (which got me $125) and the banker lady enrolled me in the card—I get 10% bonus points and also 10 bonus points per transaction because I have the checking account.
TJ
I found the sign up for the 3% bonus on rotating categories.
But one question I have is what is the limit for taht – Is it true taht it is only 3% of $1,000 spent in those categories – In effect a bonus of $30 for the whole quarter – not alot.
I think I might go with Fidelity Visa 1.5% om first %15,000 then 2% on everything else after that .
Much more staright forward & more points.
I just got a letter from Chase today to change my Chase Freedom terms. The difference from your letter is that it offers 5% cash back on rotating categories to replace the 3% on top 3 categories.
I have accumulated over $150 of rewards. Now the $250 check for $200 in rewards is no longer available. I suspect that Chase is making sure that anyone inching towards the $200 line is switched over.
My notice of the reward program changes came within the last two weeks.
The main text begins: “Congratulations! To thank you for being a valued customer, we’re changing your Chase Freedom account. You’ll receive new benefits … and there’s no extra cost”. What isn’t mentioned there in the introduction is that the primary existing benefit of 3% in the top 3 of 15 categories will be removed (although they do point out that it will be “replaced” a little farther down).
Next they do tell me that I’ll be getting a 5% cash back in popular rotating categories and that this will replace the current program. Other than the fact that it does smack of Discover as mentioned above, the main problem that I have is that the current 5% categories do not include anything where I would spend much, if anything. I suppose future categories might be more favorable, I don’t know. I usually did spend significant amounts in at least 2 of the previous 3% categories. So, for me, this “thank you’ from Chase results in giving up a 3% cash back for a 1% cash back. And, of course, as with Discover it will be necessary to “sign up” to get any 5% cash back and I really don’t want to take time to find the new categories as they change and then “sign up”. I imagine Chase realizes that many customers will mentally associate the 5% cash back with Chase, but then never actually sign up as the categories rotate. So, chase can benefit by promoting the 5% cash back and then not pay it all that often — if my assumption is correct.
Then the letter continues that I can avoid interest with the “Full Pay” part of “Blueprint” if I assign “everyday purchases” to “Full Pay” and pay them in full each month. I suppose that might be a nice feature to those who typically carry an interest accruing balance, but as I almost always pay the entire balance every month it’s nearly pointless for me. I try not to put major purchases on a credit card anyway to avoid the relative high interest.
Next I’m informed that there are no limits or expiration dates for 1% cash back purchases. I don’t know if that implies that there are limits and expiration dates for 5% cash back purchases — If I ever would have any. I did check the Chase website for details, but got a pop-up window stating that terms and conditions would only be revealed after I signed up for the program which I especially didn’t want to do before I collect my cash back rewards under the old program.
Next they inform me that I can redeem my rewards easily online. I thought that I could already do that? And then there is the mention that the $250 check / $200 rewards is no longer available. Okay, but remember, the given reason for all these changes was as a “thank you” for being a valued customer. Thankfully, my rewards balance will go a little over $200 on my early March bill and I have until March 31, 2010 before I “start receiving these new benefits”, so I think that I will still be able to get a $250 check under the old program.
As I navigated around the Chase website getting additional information on the benefit changes, I came across something called Chase Community Awards (or something like that) where they give money to various charities. There was one so-called “charity”, maybe two, that I thought absolutely outrageous receiving a substantial amount of money. Most were okay, but none would be a top priority charity for me. I would much rather do business with a company that gives me the best possible deal and with what I save doing business with that company then donate to charities I prefer rather than having a company decide what I donate to via their profits.
I’ll soon be closing my Chase account and use something much more straight forward, less manipulative, and with fewer hassles than what Chase now offers.
Thanks for the detailed commentary. Hmm, five percent in rotating categories… that sounds familiar!
I’ve switched to using my Schwab 2% cashback card almost exclusively. Chase will never get any of my business again.
i cashed in $200 for $250 back in December 2009 and will cash in the $50 i have left by the end of March. I have calculated that with their rotating categories and the fact that i can no longer get $250 for 200 rewards funds, it will cost me four times more in spending to match what i previously made under the old program. Manipulation of terms and offers makes no difference, as there is ALWAYS a bottom line, and after that line, starts Capital One rewards visa. hey, there are no loyalties in business, only negotiations and expensive brunches.
So, how do you determine what those rotating categories are? I could never get an answer from Chase.
These changes Chased me away!
Mr B, if you want to lose on chase 5% cashback that’s your position, sure you can knock chase as the big back and they do have shady tactics but all the banks do especially fia card services who is owned by BoA.
Truth is besides the fidelity amex card, the chase 5% card is the BEST cashback card on the market , no other card gives you 5% up to $1,500 in each category for 3 months besides puny discover which only gives up to $200 or $400 or so aka $10-20 or if your lucky $40 max.
Sure , chase lied and misled people but refusing to do business makes you sound immature, now I do admire your post, obviously chase upset people and stated “fake” improvements.