Chase Freedom vs Chase Freedom Unlimited: What Every Entrepreneur Should Know

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If you’re an entrepreneur you’ve probably received countless offers and applications for a business and personal credit cards. You may be wondering whether you should have one or how they differ.

Business credit cards can be a convenient way to access short term financing needs and increase your business’ purchasing power. According to research by the National Small Business Association, 37% of small business owners testified using credit cards for the same purpose.

Like any other source of financing, business credit cards come at a cost and should be carefully managed. As such, here are important things you should know about Chase Freedom vs Chase Freedom Unlimited and how credit cards can boost your mall business.

Chase Freedom vs Chase Freedom Unlimited Credit Cards: Similarities & Differences

Similarities

  • No annual fees on both cards
  • Both cards earn Chase’s in-house rewards currency, also referred to as Ultimate Reward Points, which are redeemable.
  • Both cards attract a sign-up bonus of $150 after spending the first $500 in three months.
  • Can earn a $25 bonus for adding an authorized user.
  • Both cards have a 0% introductory APR for 15 months on balance transfers and purchases.

Differences

  • Chase Freedom offers 5% cashback rotating quarterly categories reward of up to $1,500 per quarter while Chase Freedom Unlimited does not.
  • Chase Freedom also offers 1% cashback reward on other purchases while Chase Freedom Unlimited offers 1.5% cashback on every purchase.

Chase Freedom Credit Card – Advantages & Disadvantages

Chase freedom was among the pioneers of true cash back credit cards. It’s offer of unlimited 1% and 5% cash back remains. However, you have to manually activate your 5% cash back categories.

Chase doesn’t disclose the precise credit card score you require to qualify. Nonetheless, Freedom is openly promoted to credit card users with moderate income, less than perfect scores, and inexperienced.

Advantages

  • Cash back boost can increase your earning power.
  • No annual fee unlike other credit cards such as Capital One, Blue Cash from American Express.
  • Large and easily achievable sign-up bonus
  • Although Freedom has late fees, it doesn’t charge a penalty APR.
  • Flexible cash back redemption helps you get statements, gift cards and bank account deposits.
  • No minimum amount of accumulated cashback to redeem.

 Disadvantages

  • Chase Freedom’s 1% baseline cash back rate is lower that rates offered by other competing cards.
  • One must manually activate the 5% cash back categories each quarter which can be annoying.
  • Unlike other competing credit cards, Chase Freedom doesn’t offer credit score updates and credit monitoring.
  • It’s expensive to get cash advances using Chase Freedom as compared to other cards.

Chase Freedom Unlimited Credit Card – Advantages & Disadvantages

Chase Freedom Unlimited is a cash back credit card with 0% APR, sign-up bonus, no annual fee and unlimited 1.5% cash back earning rate on any purchases made.

Unlike Chase Freedom, Unlimited has no rotating cash back categories. However, they can be annoying to activate and track.

Advantages

  • No annual fee makes it ideal for cardholders who don’t earn enough points fast enough to pay recurring charge.
  • Good intro APR promotion of 15 months 0% APR and balance transfer as compared to other cards that offer the same for 12 months.
  • You can redeem cash back earned in any amount at any time. You can redeem for virtually anything ranging from business travel, third party purchases to merchandise.
  • No need to manually activate 5% cash back earning as it’s automated.
  • No penalty APR.
  • Perfect credit score is not necessarily required.

Disadvantages

  • Cash back earnings set at 1.5% means no matter how much you spend, you can’t earn more. Other cards such as Chase Freedom and Citi Double Cash Card offers more.
  • Foreign transaction fee of 3% affects businessowners who move abroad with a credit card. Competing cards like Discover it don’t charge.
  • High balance transfer fee of 5% is higher than competing cards offering 3%.
  • No redemption bonus under any circumstance.

Chase Freedom vs Chase Freedom Unlimited: How Credit Cards Can Boost Your Small Business

Access to capital is among the biggest barriers for entrepreneurs and small business owners. It isn’t always a breeze to secure business acquisition financing or any amount needed. A business credit card can give you access to a line of credit. And, if used wisely, can also assist your bottom line.

Here’s a run down of how using a credit card can assist your small business.

Access Credit: If you can’t take out a small business loan, a credit card can help your business stay afloat. Since credit card bills aren’t due until a few weeks after close of statement, you have a small cushion of time.

Always keep in mind that credit cards charge high interest rates as compared to standard bank loans. As such, ensure you business is capable of paying off the balance on time.

Establish business credit history: When you begin a business, lenders usually use your personal credit score when applying for loans or a business credit card. Using a card tied to your business can assist you build your business credit score. That makes it easier to get better borrowing terms in future.

Streamline expenses: Putting all expenses on one credit card helps you track your money. This helps in accounting and when filing taxes. Cards such as BBVA Compass ClearSpend Prepaid Visa Card offers apps for tracking expenses.

Consider adding employees as authorized users. That way, you reduce the headache of dealing with reimbursements and makes it easier to keep time. Some credit cards even offer the option of limiting individual spending for your employees.

Get Rewards: Credit card companies like Chase offer large sign up bonuses and rewards to businesses. For instance, 5% rewards on expenses appear small, but if you take it as adding to your profit margin and bottom line, a small percentage can make a big difference.

Chase Freedom vs Chase Freedom Unlimited: Credit Card Cons

Before rushing to use or apply for a credit card, consider the following downsides:

More Expensive: Small business credit cards offer convenience and ease at a price. They attract higher interest rate than small business loans. If not repaid, it can add up quickly.

Personal Legal Liability: Most credit cards require personal liability agreement to repay debt. In case of nonpayment or late payment, it adversely affects your credit report. Even if you move abroad with credit card debt, it won’t just go away.

Fluctuating Interest Rates: Credit card companies can adjust your interest rate based on how you utilize and manage your account. Without a good system, managing credit card usage can be an uphill task. This eventually affects your bottom line. Here are some tips to responsible ownership.

  • Install a bomb-proof accountability system
  • Decide who gets and uses a card
  • Set specific spending limits
  • Be watchful
  • Use credit cards wisely.

Using a credit card can get your small business access to capital. If used wisely, it can help you remain organized, boosts your finances and creates a good business credit score. It’s imperative to note that credit cards can do more harm in the long run if you end up paying interests monthly and carrying balances.