Subscribe to this BlogFirst look at new Chase rewards program
The credit card industry is on shaky ground right now, with banks fretting over recent legislation that will rein in some of their most abusive practices and a decline in credit card spending on the whole.
But Chase Card Services is hoping to win some customers back by unveiling its new Ultimate Rewards program Thursday. Similar to the Citi ThankYou Network or American Express Membership Rewards, Ultimate Rewards will serve as Chase’s flagship rewards platform.
The program allows cardholders to earn at least one point for every dollar spent. Points can be redeemed for cash, travel, merchandise, gift cards or statement credits through the rewards portal at UltimateRewards.com. Here's a closer look at the program:
The good:
• There are no spending caps or tiers to earn rewards. So cardholders will get at least 1 point starting with the first dollar they spend, all the way to the last.
• Points never expire, and there are no limits to the number of points that can be redeemed in a year.
• There are several opportunities to earn more than one point per dollar spent. Airline travel booked through the Ultimate Rewards Online Travel Tool and paid with a Chase credit card will earn two points per dollar. Shopping through the Ultimate Rewards Bonus Mall can earn cardholders up to 10 points per every dollar spent.
• Thus far, it looks like one point is worth about one cent when it comes to cash, statement credit and travel redemption—effectively, 1% back, which is a decent rate, given the times. Redeeming points for merchandise, however, will be more expensive. The fact that cashback is actually cheaper bodes well for consumers.
The bad:
• Chase Freedom used to be one of MONEY’s top picks for cashback cards, when it offered 3% back in three of 15 categories (like groceries and gas) in which you spent the most each month. They got rid of that feature last year, opting for 3% back in categories that revolve each quarter, much like Discover’s Cashback Bonus Rewards program. With Ultimate Rewards, this will continue.
• Cardholders who want to earn a fixed 3% back in the grocery, gas and fast-food categories must pay a $30 annual fee.
• Cardholders must accrue $50 before a cashback check can be issued (though statement credits can be issued at any level).
The unknown:
• The program’s travel tool, which can be used with points, cash or any combination of the two, boasts “no restrictions or blackout dates for airline travel redemptions.” Sounds good, though Chase spokesperson Rob Rosenblatt says that the tool ties into all the airline reservation systems, so it remains to be seen how flexible it will actually be.
• Only two Chase cards operate on this platform (Freedom and the new Sapphire card for affluent Chase customers), though others may be added later.
• While the two cards on the platform don’t require an annual fee, Chase is offering a Sapphire Preferred card for $95 a year. It will come with additional perks, such as the ability to transfer points to other travel rewards programs.
Given the cry from experts across the industry that rewards programs will all but shrivel up, the fact that Chase unveiled this program now is what makes it so noteworthy. "I think this could be a turning point for the reward cards market. There is some scaling back, but for the most part this issuer is trying to make its program competitive," says Curtis Arnold of CardRatings.com. "When a major issuer like Chase bucks the trend with this announcement, other issuers are likely to follow."
This change was a stunner to me. I chose the card because of the rewards program & had no notice it was changing. I asked this:
"…I did NOT authorize this and don't want this presentation. Please advise as to when the former dollar amount presentation will be restored."
I received this:
"I have researched your inquiry regarding the changes that
you see online. Your reward program has changed to the Chase Freedom Exclusives 10 & 10 with Ultimate Rewards program. The marketing department reviews each account
individually and determines which accounts can be upgraded
and your account was chosen."
Apparently, Chase feels its marketing department is better equipped than its customers to make customer financial decisions.
My blood boils. This is insulting and disingenuous — the program is NOT better it is worse.
Does anyone know–do consumers have any recourse here?
Ian, I use the Chase Freedom card and am not at all happy with the new rewards program. What other card(s) do you recommend?
The only reason Chase Freedom CC WAS a good card to own, compared to other cards was the $250 cash back for $200 of rewards balance. That 25% bonus actually made the card worth owning. Let that build to $400, and you get a nice $500 check. Take that perk away (which they have now done) and there is NO point to using this card. There are better cards out there, with better returns. Too bad Chase… Too bad.
This is to Richard from Georgia, not everyone pays their full balance every month. Not because they live beyond their limits, but for a number of reasons which may include trying to establish credit. Assuming individuals who carry a credit card balance will incur "one financial disaster after another" and assuming this also equates with the fact that they can't live within their means is ridiculous and ignorant.
Chase just closed my card — payments were fine, they said balance was too close to credit limit (not that they warned me or anything) — $3400 on dead card now at 29%; while my $14,000 in Chase checking and savings is earning less than 2% — you could not make this stuff up.
I got a Chase Freedom last month and was eager to cash in my $50 cheque. However, when I called Chase they offered to pay me $250 in lieu of 200 points. This is quite contrary to what a lot of people have said in their comments.
Bottom line is that with the new legislation we will continue to see a decrease in rewards and an increase in fees. The credit card companies are not going to roll over and not do anything to offset their decrease in revenue due to caped interest rates. They will still pass it on to the consumer and in this case it will be the responsible ones (who pay their cards in full monthly) who get the short end of the stick.
I would like to see Chase keep their reward level at 3% even if it means increasing their interest rate to 50%. Those of us who pay our credit card off in full each month really have come to enjoy the cash back…..but let's face it…people who maintain a credit card balance are always going to go through life incurring one financial disaster after another….it's just the mind set of those who can't live within their means….so what's it matter if their interest rate is 50%??
As the bank cards have us OVER A BARREL (ugh!) is it not time to CHANGE OUR Behavior? Why reward crooked, racketeering banks (don't forget Chris Dodd (D-CT) was a lap dawg for Countrywide's Mozillo and got SPECIAL TREATMENT on his mortgage) and move to Schwab/AMTD/ any FEDERAL/STATE Credit Union/TIAA-Cref/USAA? Much better treatment + it's so PAINFUL to get airline VALUE and service, one might as well wake UP and smell the coffee!!! HIT BACK….just don't CLOSE that FICO-linked card.
It is not surprising, but the Chase benefits have actually been getting worse. The card I still use from Chase, which expires this September, gives me 5% cash back on gas and groceries. I've had the card for over 2 years, and I'm sure the company will be happy to see it expire. That said, I still enjoy banking with Chase and will get another Chase card afterwards.
Been a Chase Freedom CC customer starting 3 years ago. Signed up because of its rewards program. This move is nothing more than a cut in benefits and will be effective beginning the start of July 2009. Before this change, you get 3% back in the top 3 categories that you use (for me its gas, groceries, utilities) – now its 1%. Before this change you get $250 back if you have 200 points (an extra $50 back) – but this new program will no longer offer that.
I got my letter from Chase yesterday about my Freedom card and it also appears they are dropping the ability to exchange 200 in earned cash rewards for $250. I didn't look at this move as a "new rewards program" – I looked at it as slashing the benefits of an existing rewards program.
Chase interest rates are over the roof. They do little to work out a rate that is comparable with other cards. I am extremely unhappy with my Chase card and the rewards benefit is not worth the high interest rate.
I have had a Chase Freedom for almost two years, and my rewards details still say I earn 3% back on my top 5 spending categories (being a chase checking customer gets you two extra categories). When did that policy change and should I expect it to affect my card?
BOA is a joke. Got a recent notice from them that they were raising my APR from 9.99% to 23.99%. Called and was told they "Have the right to change my rate at any time" per my agreement. Had the card for 8+ years and never missed a payment or late even 1 day. What a sad excuse for a company
Bank of America which manages schwab visa reduced my credit limits by 40% because they are in financial trouble. When I called to ask why, they reduced my limit by a total of 95% and closed 3 of my 4 credit cards with them. Don't give them your business unless you want that to happen to you. Pentagon Federal is just as good.
Any program sounds good until they (banks) get themselves into trouble again and the "no expiration date" turns into "expired". Let's see them lower the interest rate by 1% for every year you never miss a payment, There's a real reward!
Sallie, who in the world would have a credit card that has a 29% interest rate on it? Why? How? 3,400. @29% there are cards with a lot less rate. look for one. I am happy with my Chase card.