CC 5% Cash Back Offer

[DRILLINDK]

I not a real big CC user so excuse my ignorance in asking this question. I've had my one and only Chase Reward's credit card since college about 6-8 years now. I've noticed that they're offering me 5% cash back for a Chase Freedom offer for this quarter if I enroll and will have another promotion next quarter that I can choose to enroll in as well.

This offer doesn't pass the smell test to me. Am I misinterpreting this offer, or is this a ploy to have me enroll in another CC?



ps- Thought I should add that I pay my balance off in full every month. I have rarely used my CC, but would like to begin using it more to earn rewards.

[skydivingchic]

I have a Chase Freedom CC and yes, they do offer 5% cash back on particular categories of spending each quarter. They cap the rewards at $1500 worth of spending in those categories, so there is a maximum amount of rewards you can earn. The categories change each quarter. Through the end of June, the extra cash back is for Home Improvement, Lawn and Garden, and Home Furnishings categories. Starting in July, it is Gas, Hotels, and Airlines. The biggest "catch" is that you have to enroll each quarter, which many people will not remember to do. The Chase Freedom card used to offer better rewards - 3% cash back in the three categories you spent the most in every month. So one month that might be groceries, gas, and home improvement and the next it might be gas, hotels, and restaurants. Now you are locked into the categories they set out. Plus if you saved up $200 worth of rewards, you could get a check for $250. I personally don't spend much at the types of stores covered this quarter, so its not much of a reward for me. I do most of my day to day spending on a Fidelity card, which gives me 1.5% cash back on all purchases, automatically deposited into my Fidelity checking account once I've hit $50 worth of rewards. I do still have the Chase Freedom and now only use it for whatever the 5% categories are each quarter.

[tan fish]

I also have the Chase Freedom card, and was attracted to it for the very same reasons (the good rewards). As noted above, yes, the 5% categories rotate and one has to enroll every few months to take advantage of that good rate. Many people just don't do that for whatever reason.

[kork13]

Yes, it does appear that they want you to apply for a new credit card. However, if you're interested in the 'Freedom' card, you might call Chase and ask if they can simply transfer your account from your current card/terms/rewards/etc. to the 'Freedom' card. I know a number of companies who will do this for you, all you've got to do is ask. For example, I've done it twice with my Discover card (started as the 'Get More' card, then changed to the 'Open Road,' then back to 'Get More').

On that note, the idea of rotating categories at 5% is not new. Discover's 'Get More' card offers essentially the same program (except I believe the spending limit is lower, like at $500 or something). If you frequently use the categories they feature each quarter, it's a great deal. Just for the other quarters where it's not beneficial to you, you might want to have a "backup" card that gets good rewards elsewhere, like a basic '2% cash back everywhere' type of card.

[Thrif-t]

I have the Chase Rewards Card and LOVED IT. I got a letter this weekend telling me they would be changing it to the Chase Freedom Card . I think they will be doing away with the Chase Rewards Card and switching everyone over to the Freedom card eventually. I'd enjoy the Rewards card for as long as you have it. I made out on that because we had 5% on gas, food and pharmacy. This rolling 5% will probably be categories I wouldn't participate in much anyway. But everyone needs food and gas. That's probably why they're changing it, they probably lost too much money to rewards. Between my husband and my card we'd earn a total of $600 year.

[DRILLINDK]

Thank you for the replies. So to clarify, by enrolling in the 5% program am I opening another line of credit/credit card?

Also, could someone explain why they require you to re-enroll every couple of months?

[maat55]

Originally Posted by DRILLINDK

I not a real big CC user so excuse my ignorance in asking this question. I've had my one and only Chase Reward's credit card since college about 6-8 years now. I've noticed that they're offering me 5% cash back for a Chase Freedom offer for this quarter if I enroll and will have another promotion next quarter that I can choose to enroll in as well.

This offer doesn't pass the smell test to me. Am I misinterpreting this offer, or is this a ploy to have me enroll in another CC?



ps- Thought I should add that I pay my balance off in full every month. I have rarely used my CC, but would like to begin using it more to earn rewards.

No, it is legit. I activate everytime I get the notice.

[kork13]

Originally Posted by DRILLINDK

Thank you for the replies. So to clarify, by enrolling in the 5% program am I opening another line of credit/credit card?

Also, could someone explain why they require you to re-enroll every couple of months?

It depends on how Chase does it. If they simply transfer your card, it should be considered the same line of credit. If they cancel your current card and open the new one, it'll be a separate line of credit. For a number of reasons, you should try to make the first option happen, and avoid the second if possible.

Why? Who knows... As the cynic, I'll say that perhaps they hope that people will forget about when a certain quarter's rewards expire, and they go on charging regularly on the card in spite of receiving a far lower reward benefit. But really, I have no idea.

[Slug]

Originally Posted by DRILLINDK

Thank you for the replies. So to clarify, by enrolling in the 5% program am I opening another line of credit/credit card?

Also, could someone explain why they require you to re-enroll every couple of months?

It's not a new line of credit IF you ask them to transfer your existing line to the new card. Otherwise, yes, it is.

They make you 'activate' your rewards each quarter to encourage touchpoints. It's a marketing tactic. If you activate the card, you're probably more likely to use it because it's top of mind. I get a text reminder from Chase and just reply to the text and it activates for the quarter. It's very easy.

Although I have the Chase Freedom and Discover, I prefer cards without the rotating rewards. I do end up carrying a lot of cards though. See my post: Best Cashback Rewards for Credit Cards Q3 2011 | Sunk Costs Are Irrelevant