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Chase Freedom Q3 categories hit the mark again

Replacing gas with Amazon and Whole Foods leans into Americans’ pandemic-induced spending habits

Summary

I’ve had the Chase Freedom card since 2012, and I think this year’s assortment of 5% cash back categories are the best yet. My family will especially benefit from the card’s Q3 categories: Amazon.com and Whole Foods.

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I’ve had the Chase Freedom* card since 2012, and I think this year’s assortment of 5% cash back categories are the best yet.

As a reminder, Chase Freedom offers 5% cash back (after activation) on up to $1,500 in quarterly spending in categories that change every three months. After you reach the spend threshold, you’ll earn 1% on all purchases. Through 2016, Chase used to release the entire calendar in advance (as its main rival, the Discover it® Cash Back card, continues to do). In 2017, Chase started revealing these quarter by quarter.

Here’s how the past few years have played out:

Chase Freedom bonus categories, 2018-2020

201820192020
Q1: Gas stations, internet/cable/phone services and mobile walletsQ1: Gas stations, drugstores and tollsQ1: Gas stations, internet/cable/phone services and select streaming services
Q2: Grocery stores, Chase Pay and PayPalQ2: Grocery stores and home improvement storesQ2: Grocery stores, gym memberships, fitness clubs and select streaming services
Q3: Gas stations, Lyft and WalgreensQ3: Gas stations and select streaming servicesQ3: Amazon.com and Whole Foods Market
Q4: Department stores, Chase Pay and wholesale clubsQ4: Department stores, Chase Pay and PayPalQ4: To be announced

It’s clear to me that Chase puts a lot of thought into the Freedom card’s categories and is willing to adjust on the fly. For example, streaming services were a late addition in Q2 2020 once the COVID-19 pandemic temporarily closed most gyms and fitness clubs and forced people to spend a lot more time at home (much of which they spent streaming movies, music and TV shows). The Q3 2020 categories also appear to be a nod to COVID-era spending habits.

For the first time in years, gas stations failed to make a Q3 appearance. This category normally has a summer road trip angle, but not this year, with fewer people venturing far from home. Replacing gas with Amazon and Whole Foods leans into Americans’ pandemic-induced spending habits on food and other household necessities.

See related: Which is the best card for Amazon.com purchases?

Q3 categories are a welcome change for my family

I’ve often lamented how the Chase Freedom likes to double down on gas stations in Q1 and Q3. My family doesn’t drive much (I took public transportation to work before the pandemic shuttered our office), and even in a nation that loves the open road, most Americans don’t spend as much as you might expect on gas.

According to the Bureau of Labor Statistics, the average household spends $2,039 annually ($170 per month) on gas. That’s only about a third of the Chase Freedom’s quarterly limit. At Amazon, meanwhile, my family averaged about $275 in monthly spending last year. Over the past three months, we’ve averaged $365.

We easily maxed out the Q2 2020 grocery category, and we came close in Q1 (mostly on internet, cable and phone services, which provided a nice supplement to gas stations). The last quarter of 2019 was another big winner for us, thanks to PayPal.

I appreciate how Chase Freedom has broadened its appeal in recent years. Whereas some categories in years past were more narrowly focused (such as Lyft, Walgreens and Chase Pay), the recent trend has been toward flexibility.

See related: How to redeem cash back

What’s in store for Q4?

The final quarter of this year will likely have something to do with holiday shopping. I hope it includes PayPal again, which broadened the appeal well beyond traditional department stores. This is something the Discover it Cash Back card does well, too.

Discover will include Amazon.com in Q4 2020 (along with Walmart.com and Target.com). Its Q3 2020 categories are restaurants and PayPal – a nice mix of physical and e-commerce. Discover emphasized groceries in Q1 (plus Walgreens and CVS). Its second-quarter categories were gas stations, Uber, Lyft, wholesale clubs and The Home Depot, which was a late addition for June 2020 and likely a response to the virus.

Bottom line

There’s a lot of value to be had on these cards, and their categories are staggered such that many no-annual-fee cash back fans would be well-suited to own both.

Have a question about credit cards? Email me at ted.rossman@creditcards.com and I’d be happy to help.

*All information about the Chase Freedom card has been collected independently by CreditCards.com and has not been reviewed by the issuer. Chase Freedom is no longer available through CreditCards.com.

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