Previously, I mentioned that Chase is changing the rewards program on its Chase Freedom Card. This is true, according to the Wall Street Journal, but it appears they are doing it slowly through the year.

Here is a description of the new rewards program:

“Under the points-based program, dubbed Ultimate Rewards, customers will earn points for every dollar spent on certain Chase credit cards, with no earnings caps or expiration dates. Points can be redeemed for travel, cash, statement credits or gift cards, generally on a one-for-one basis with each point worth one penny. Users can also redeem points for merchandise, although the redemption rate is slightly less than one percent.”

And what they are going to do:

“For Chase, the move is also a way to replace older versions of its Freedom card, some of which had offered richer cash-back rewards and bonus opportunities. Throughout the year, all Chase Freedom cardholders will be moved to the rewards program, where they will earn 1% cash back (or one point) for every dollar spent and 3% cash back (or three points) for every dollar spent in categories that change each quarter. Chase had already moved to those terms for new customers last November.”

In my last entry about this, I had not received a letter from Chase in regards to the change. For me, this means that Chase has not gotten around to changing my reward program. Hopefully, I will have a couple more months before they do, so I can still get a check for $250 for $200 in rewards since I am so close. I realized now, I also don’t have to cancel my Chase Freedom card since I can just go with the reduced (standard) rewards version:

“The standard Freedom and Sapphire cards — where users earn one point for every dollar spent — don’t have annual fees. However, some Chase Freedom cardholders who want to earn a fixed 3% bonus for spending in grocery, gas and fast-food categories, will soon pay a $30 annual fee.”

Labels: credit cards

I’ve got some bad news. It looks like Chase Freedom is no longer going to be such an attractive credit card. Word on the street is rewards are going to be cut back. People have received letters in the mail (I have yet to receive it, but I haven’t really check my mail lately) mentioning the following down-grade in rewards:

1. The 3% cash back is being changed from the top 3 of 15 categories to 3 specific categories–gas, groceries, and fast food.
2. Effective June 30, 2009, the bonus redemption of a $250 check for $200 in rewards will be eliminated.
3. There will be a $30 annual fee, waived for the first year.

This is something that I heard and have not been able to confirm it, but it definitely makes a big impact on the credit cards that I use. I am also so close to the $200 reward where I could cash it in for $250 in rewards. Maybe I will load up on purchases on my Chase card this month to get to that mark before they end that reward.

I really don’t want to cancel credit cards because it could hurt my credit score, I might have cancel Chase Freedom over the next year to avoid the $30 annual fee. What I will probably do, is have them slowly lower my available credit over the next year to minimize the impact to some degree on my credit score.

Every time I spend money, I try to use a credit card. I feel that it is a lot easier to keep track of your expenses if you use a credit card. The only record of a cash purchase is the receipt, and we all know we either throw out the receipt or lose it. I also think that if you carry cash, you are more likely to use it. This might be a personal preference, however, since I know it is completely possible for someone to keep swiping their credit card and to not maintain a sense of how much they are spending.

If you are one of those people who struggle with using/abusing their credit card, you should consider just spending cash. Cash is a lot more tangible. If you have a hundred dollars in your wallet and you spend twenty, you can see how much less is there. This might help you think more about your purchases.

If you are able to be responsible with your credit card (this means keeping track of how much you spend each month and not carrying a balance each month) then I would make every purchase with the credit card. You should be getting something for every dollar that you spend. This is why I am a big fan of cash back credit cards as they give you back a small percentage of your purchase in cash. I do not believe in credit cards that do not give you anything for your purchases since I might as well use cash if I don’t get anything from spending it.
The best cash back credit cards that I have found are the American Express Blue Cash and the Chase Freedom cards. I use both of these, but in different ways since they provide different benefits. The Blue Cash card is really only beneficial if you spend a large amount of money each year. After you spend $6,500 in one year, you get 1.5% cash back on all purchases and 5% cash back on purchases at convenience stores, gas stations, and grocery stores/super markets. For the first $6,500 you only get .5% cash back on all general purchases and 1% cash back at convenience stores, gas stations, and groceries. Sometimes I have purchases to make for work for which I get reimbursed. I use my Blue Cash card for these purchases to increase my spending with that card in order to get to the more beneficial cash back percentage faster and at no real cost to me.

The Chase Freedom card is best for people who don’t spend as much per year. If provides 3% cash back on your top three spending categories and 1% cash back on all other purchases. I use the Chase Freedom card for mostly dining out (this is one of my top three spending categories) since that is one of my major expenses. For gas, groceries, and convenience store purchases I use my Blue Cash since I get 5% cash back on those.

Basically, these small percentages add up. If you do not get something out of your credit card (there are credit cards that give you points, travel rewards, cash back, and etc) you should definitely consider getting a new credit card. You might not want to cancel you old cards though, since doing that can hurt your credit score, but we can discuss credit scores in another post.