Chase Freedom Unlimited vs. Citi Double Cash
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Do you prefer cash back to earning points and miles as credit card rewards? Many reward credit card users find that cash back offers them unparalleled flexibility compared to the restrictions imposed on points and miles earned with travel providers. Their cash back rewards can be spent or saved in any way, while the use of travel rewards are often limited by blackout dates, capacity controls and arbitrary changes to award programs.
The new Chase Freedom Unlimited and the Citi Double Cash are two of the most competitive cash back reward cards offered, but they are still quite different from each other. Let’s take a look at the features and benefits of these cards, and see which one is right for you.
The standard Chase Freedom card has been one of the most popular reward cards for some time, and it has offered customers 5% cash back on up to $1,500 spent each quarter at featured retailers and on select categories of merchants that change each quarter, and 1% cash back on all other purchases. However, some cardholders do not want to keep track of rotating bonus categories that they have to register for each quarter.
To offer cardholders a choice, Chase recently introduced its Freedom Unlimited card that trades the rotating bonus categories for a higher level of cash back on all purchases. Freedom Unlimited cardholders receive 1.5% cash back on all purchases, with no cap on the amount of spending that is eligible. Rewards can be redeemed for cash back in any amount and at any time, and your rewards never expire.
In addition, new cardmembers can earn a $150 bonus after spending $500 on purchases within the first three months of account opening. An additional $25 bonus is offered when you add an authorized user who makes a purchase within the same three month period. Furthermore, new applicants receive 0% APR introductory financing for 15 months on both new purchases and balance transfers, with a 5% balance transfer fee. Once the promotional financing rate expires, the standard interest rate of 14.24%, 19.24%, or 23.24% will apply, depending on your creditworthiness when you applied. As with most credit cards, this is a variable interest rate that can change with the Prime Rate.
Other benefits include purchase protection and price protection plans, and an auto rental collision damage waiver policy. There is no annual fee for this card.
The Citi Double Cash card offers you the chance to earn cash back twice, once when you make a purchase and again when you pay. You earn 1% cash back on all purchases at the time of the transaction and another 1% when payment is made for a total of up to 2% cash back. This card also offers 18 months of 0% APR introductory financing on balance transfers, with a 3% balance transfer fee. Once the promotional financing rate expires, a standard interest rate of 13.24% – 23.24% will apply to the remaining balance, which is a variable rate based on the Prime Rate.
Other benefits include Citi’s Price Rewind service, which can automatically refund the difference in price when an eligible purchase experiences a price drop within 60 days. Citi also offers a damage and theft purchase protection plan which covers purchases for up to $1,000 per item for theft or damage within 120 days of purchase (90 days for New York residents). Other benefits include a trip cancellation and interruption policy, worldwide travel accident insurance, rental car coverage, and a 24/7 concierge service. There is no annual fee for this card.
Which card is right for you?
If you focus strictly on the rate of return for cash back, the Citi Double Cash appears to be the better offer, with up to 2% cash back on all purchases versus the 1.5% for the Chase Freedom Unlimited. Nevertheless, there are a myriad of other factors to consider. For example, the Freedom Unlimited is offering a sign-up bonus of up to $175, which makes up for the maximum difference in cash back earning during the first $35,000 of spending.
If a balance transfer is important to you, Citi’s 18 month offer with a 3% balance transfer fee is clearly superior to the Chase Freedom Unlimited’s offer that lasts just 15 months and has an above average 5% balance transfer fee.
Finally, the Chase Freedom Unlimited has one interesting advantage for some cardholders. Points are earned in Chase’s Ultimate Rewards program and cardholders can transfer their rewards from their Freedom Unlimited account to a Sapphire Preferred or Ink Plus account, where those rewards can be transferred to airline miles and hotel points or redeemed for travel reservations at a rate of 1.25 cents per point.