cameljockey

Has anyone looked at the economics which is better, Discover 5x (2x in first year) or the Freedom 5x?

sdsearch

It depends what you're after.

Discover is a purely cashback card, with cashback easily applied to statement credit, etc.

Freedom is an Ultimate Rewards points card, which creates points which can eventually (once you get an annual-fee UR card for at least a little while) be transferred to airlines (where they can be worth well over 1c per transferred point, depending on if you only use them for expensive flights) or hotels (where again it depends on the hotel program, and the particulars of the hotel nights points vs cash cost how it's valued), or you can redeem for travel (on which you don't earn points if you use it for hotels, because it's treated as a third-party site), or finally you can use it for cashback just like Discover.

If you're only going to use it for cashback, it's a bit simpler, but still not super simple, because the categories while similar are not exact. For example, right now Chase Freedom has restaurants and movie tickets, but Discover only has restaurants for most people. So it would depend on how much you're spending at the movies this quarter as to how much worse Discover would be this quarter.

To me, UR points because of the (eventual) transferability makes Freedom better for me than Discover (I have both) when the category is the same at the same time. Discover is better for me only when in a given quarter they have some category (that I can use) that Freedom doesn't, and that no other card I have has anywhere close to that earning on that category either. (Ie, for me, 5% cashback doesn't trump 5x UR points, but does trump 1x UR point.)

cameljockey

This is what the heart of the question is for me: why would UR points be worth more than cash, if in fact you are getting 5% cash back on Discover as you would getting 5% cash back on UR points? It seems like if it truly is the same amount of points as cash, then cash would always be more valuable. Does that mean you value the point more (in cash for what you can buy with it) than the cash back from Discover?

mia

If you look at Freedom in isolation the points are worth $0.01, but when paired with other Chase cards the points earned with Freedom can become more valuable. The value of points depends on how they are redeemed. An Ultimate Rewards point might be redeemed for $0.01, but depending on which cards you hold it might be worth $0.0125 or $0.015 when used to purchase travel, or more if transferred to an airline frequent flyer program.

Ratamacue

Or if you would like to use them at hotels Chase has a number of transfer partners, with Hyatt typically offering the most value for your UR points.

sdsearch

Because if later you get certain other Chase UR cards, you'll be able to transfer all those UR points you earned with Freedom 1:1 to an airline (such as United), and if you use them to redeem for expensive international flights, chances are they're worth way more than using them as 1c cashback. Or you can book travel through the UR portal and also get more value than 1c cashback.

So if you're interested in redeeming UR points for travel, then it can be worth much more than 1c cashback. But if you want to redeem them for anything other than travel, then it's no better than 1 UR point = 1c cashback (and thus no better than what Discover earns if Discover and Freedom have the exact same 5x categories at the same time, which they don't exactly).

wco81

Anyone ever charge at Starbucks to see if those get 5X points when Restaurants are the category?

I have an upcoming international trip and am tempted to charge my meals on the Freedom despite the forex, though I also have the Sapphire Reserve which gets 3X at restaurants so maybe the forex wouldn't be worth it for the 66% more UR points over the Freedom 5X.

Though wouldn't the forex also get 5X points?

Many of the restaurants are attached to hotels so maybe they won't get coded as restaurants for Freedom.

mia

Think about money rather than percentages. You would be paying $0.03 per 2 bonus points ($15 per 1,000 points), with the risk that some transactions will not be coded as expected.

sdsearch

It depends on whether Chase mixes up the forex in the purchase amount, or itemizes it as a fee, as to whether it gets 5x points. I'd assume the latter (and that there's no 5x on forex, probably not even 1x on forex) unless you know for a fact that it's the former.

ryanmcv

Yes, Starbucks qualifies for 5X on the Freedom.

No, you will not earn any points on foreign transaction fees.

Duke787

Better bet for Starbucks is to:

1) Load money to Starbucks Card using Freedom (and earn 5x)

2) Utilize Starbucks card for payment while in foreign country (Starbucks doesn't charge FX fees as far as I know - they just use the daily FX rate)

That should allow you to get the 5x while at Starbucks without being hit by the FX for using the Freedom. Just make sure you load in USD before you leave the US.

mia

Apparently this only works in a few countries:

freeflyin

According to a Chase rep, Q4 is Walmart and department stores

sdsearch

Source?

I just logged into Chase and it still says only "Holiday and more".

freeflyin

I asked via SM . Personally, it is a good complement to Discover,which is Amazon and Target. Lots of gift card possibilities.