How does Chase cash back work?

Of the many rewards and incentives credit card companies offer to consumers, perhaps none are as alluring as the cash back concept. The promise of being rewarded for spending is a simple yet captivating idea and one that has proven to be a significant stride in the financial work for credit card companies. Chase, as one of the leading American banks, has also utilized this as one of their incentives for their Chase Freedom Credit Card. 

What is Chase’s Cash Back policy?

Cash Back cards can broadly be segmented into 3 categories: category bonus cards, tiered rewards, and simple cash back cards. Chase’s Freedom Card lies within the first category (category bonus cards). Cards in this category offer up to 5% cash back from certain rotating consumption categories. For instance, Chase’s Freedom Card may offer you a 2% cashback on all consumption, but a 5% cashback on certain groceries. These spending categories tend to rotate every fiscal quarter.

Redeeming your Cash Back with Chase’s Freedom Card

Chase enables its customers to redeem their cash back in 4 simple ways:

• Statement credit - think about this facet like reinvesting into your bank account. With this option, Chase allows you to allocate your cash back rewards toward paying your credit card balance. 
• Online consumption - you can spend your cash back rewards on online purchases through certain retailers. Chase also enables you to use your rewards toward certain travel booking agencies and websites.
• Check or deposit - you can also redeem your rewards via check or a direct deposit into your bank account. This is a great option for those who are not sure of what type of consumption they would like to allocate their rewards to or to those who have an eclectic consumption pattern.
• Gift cards - you can utilize your reward through certain retail stores, restaurants, and other entertainment outlets via gift cards.

How well does Chase Freedom’s cash back policy fare with other cards?

Chase’s Freedom is one of the more widely used cash back cards in the country, however, there are a few other cards that rival Chase’s offerings. 

Discover it Cash Back

Like Chase, Discover’s cash back card also fits into the category bonus segment. However, there are certain nuances in both cards that differentiate them. While Chase’s Freedom offers $200 cash back after spending $500 on purchases during the first 3 months, Discover has an automated system where it calculates all the cash you earned at the end of your first year, and therefore there is no minimum amount you have to spend to reap the benefits.

American Express - Blue Cash Everyday  

Unlike Chase’s Freedom Card, American Express’ Blue Cash Everyday lies in the tiered rewards category, which is similar to the category bonus segment, however, the categories do not constantly change with Tiered reward cards. The biggest differentiator between these cards is their rewards. Chase is more financially viable if your spending patterns are constantly evolving, whereas American Express might be the card to choose if you consume services such as gas and groceries heavily, as the categories in which you receive cash back do not change with American Express’ Blue Cash Everyday card.