Citi Double Cash vs. Chase Freedom Unlimited
Which card is best for you?
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In the showdown between the Citi Double Cash card and the Chase Freedom Unlimited card, how do you decide which card takes the prize for best cash back card?
When you compare the Citi Double Cash card’s 2 percent cash back to the Chase Freedom Unlimited’s 1.5 percent cash back, the Citi Double Cash card appears to be the clear winner.
But wait: You also need to figure in the Chase Freedom Unlimited card’s $150 sign-up bonus for new cardholders and $25 authorized user bonus – could an extra $175 worth of cash in the first year surpass the earnings on the Citi Double Cash card?
Actually, our math gives the edge to the Citi Double Cash in most instances for most cardholders. But the Chase Freedom card has a secret up its sleeve: You can pair it with other Ultimate Rewards cards to optimize your points value.
|CITI DOUBLE CASH VERSUS CHASE FREEDOM UNLIMITED
Citi Double Cash
Chase Freedom Unlimited
||Up to 2% cash back:
|Average earnings over three years ($15,900 spend. Includes sign-up bonus)||$318||$296|
|Who should get this card?||
Citi Double Cash overview
The Citi Double Cash is the original 2 percent cash back card. You get 1 percent cash back when you make a purchase and another 1 percent back when you pay your bill on time. While a few similar cards have recently entered the market, none of them beat the simplicity and ease of use of the Citi Double Cash card. The card doesn’t require you to have a bank account with Citi or to deposit your rewards into a Citi bank account – once you hit the $25 minimum redemption threshold, you can redeem your cash back as a statement credit, check, gift card or deposit into a checking or savings account.
Upsides: Simplicity and a 2 percent cash back rate that few cards can match, even cards with category bonuses. Since you earn the same rate on every purchase, you don’t have to keep track of bonus categories, nor do you have to worry about enrolling in categories each quarter.
Downsides: You have to pay your bill on time to earn the full 2 percent rate (but is that a really a downside? Or a good incentive to pay your bill?). You can’t redeem your cash back until you hit the $25 redemption threshold, though it’s a pretty reasonable threshold. Since you can’t transfer your rewards to other cards, you can’t maximize your rewards value – you always earn 2 cents on every dollar.
Chase Freedom Unlimited overview
Like the Citi Double Cash card, the Chase Freedom Unlimited card is a flat-rate cash back card that offers the same percent of cash back on all your spending, but at a slightly less impressive rate: 1.5 percent, to be exact. Unlike the Citi Double Cash card, the card includes a sign-up bonus of $150 for spending $500 in the first three months of card ownership plus a $25 bonus for adding an authorized user and making a purchase in the first three months. And – probably its best feature – the Freedom Unlimited card earns Ultimate Rewards points, which you can transfer to certain Chase cards, such as the Chase Sapphire Preferred card, and redeem for travel rewards to get better point values.
Upsides: Simplicity and ease of redemption – you earn the same cash back rate on every purchase, and you can redeem any number of points at any time for a variety of options, including cash back, gift cards, travel and Amazon.com merchandise. The card’s bonuses, totaling $175, make it very valuable in the first year. Also, the ability to transfer points to other Chase Ultimate Rewards cards means you can get more than 1 cent of value out of each point.
Downsides: Since the card doesn’t offer any category bonuses, you can‘t use it to earn extra cash back in categories where you spend heavily.
Best for first year cardholders: The Chase Freedom Unlimited card
Thanks to its $150 sign-up bonus and $25 authorized user bonus, the Chase Freedom Unlimited is by far the best card for new cardholders. As you can see from the chart below, the Chase Freedom Unlimited offers more than $400 in cash back to the average user in the first year – that’s nearly $100 more than the Citi Double Cash card, despite the Double Cash card’s higher cash back rate.
|AVERAGE CASH BACK IN FIRST YEAR ($15,900 SPEND)
|Citi Double Cash||Chase Freedom Unlimited|
|2% x $15,900 = $318||$150 sign-up bonus + $25 authorized user bonus + (1.5% x $15,900) = $414|
Best for someone who spends more than $35,000 per year: The Citi Double Cash card
However, there’s one caveat for new cardholders: If you put more than $35,000 of spend on a card per year, the Citi Double Cash card becomes the clear winner. It’s an unlikely amount for most cardholders, but you should take your budget into account before you spring for the Chase Freedom Unlimited card. As you can see from the chart below, at $35,000, the cash back on the Citi Double Cash card equals the cash back including sign-up bonuses on the Chase Freedom Unlimited card.
|CASH BACK ON $35,000 SPEND
|Citi Double Cash||Chase Freedom Unlimited|
|2% x $35,000 = $700||(1.5% x $35,000) + $175 bonuses = $700|
Best for second year cardholders: The Citi Double Cash Card
Also, it pays to stick with the Citi Double Cash card in the long haul. As you can see from the table below, it doesn’t take long for the higher cash back rate on the Citi Double Cash card to beat the Chase Freedom Unlimited card. Halfway through the second year, the earnings on the Double Cash card already exceed the earnings on the Freedom Unlimited card for the average cardholder:
|REWARDS VALUE HALFWAY THROUGH YEAR TWO ($15,900 YEARLY SPEND)
|Citi Double Cash||Chase Freedom Unlimited|
|2.5 years x (2% x $15,900) = $795||2.5 years x (1.5% x $15,900) + $175 bonuses = $771|
Best for pairing with most back cards: The Citi Double Cash card
The Citi Double Cash card isn’t just a great standalone card. It also works well as a companion to a card with category bonuses.
In the table below, we’ve paired it with the American Express Blue Cash Preferred card – a great grocery card that earns 6 percent cash back on U.S. supermarket purchases and 3 percent on gas station and department store purchases. If you use the Blue Cash Preferred card for your grocery, gas station and department store purchases and swap in the Citi Double Cash card to earn 2 percent on the rest of your purchases, you can seriously boost your cash back rate.
We estimate that the average cardholder can earn a rewards rate of 3.1 percent per year with the two cards combined, for an average of $398 cash back minus the Blue Cash Preferred card’s $95 annual fee. That’s $80 more than the value of the Citi Double Cash card on its own.
|SCENARIO: PAIRING THE AMERICAN EXPRESS BLUE CASH PREFERRED WITH THE CITI DOUBLE CASH ($15,900 yearly spend)
|Average rewards rate||Cash back earned||Total minus annual fee|
Best for pairing with Chase Cards: The Chase Freedom Unlimited card
That said, if you’re looking for the highest rewards value, your best option is to pair the Chase Freedom Unlimited card with other cards that earn Chase Ultimate Rewards points.
Chase Ultimate Rewards points are some of the most valuable and versatile rewards points. You can transfer them to certain Ultimate Rewards cards – such as the Chase Sapphire Preferred and Reserve cards – where you have a plethora of options to redeem your points for travel rewards. You can redeem them for statement credits at a value of 1 cent per point, redeem them for travel through the Chase Ultimate rewards portal to earn a 25 to 50 points bonus, or transfer them to one of Chase’s many travel partners to get even higher point values.
Our table below shows the value of combining the Chase Freedom Unlimited card with the Chase Freedom and Chase Sapphire Reserve card. The combined bonus categories push the rewards rate for the average cardholder to 1.6 percent. When you transfer the points that you earn on $15,900 of spending to an airline partner such as British Airways, it’s possible to get values of $500 or more on those points:
|SCENARIO: COMBINING 3 ULTIMATE REWARDS CARDS ($15,900 yearly spend)
|Average rewards rate||Estimated points/year||Sample redemptions: estimated value|
How do other cash back cards compare?
The Citi Double Cash card pretty much rules the cash back category, both as a standalone card and card for pairing with bonus category cards.
However, the Blue Cash Preferred card is probably the best of all cash back cards, in terms of its rewards rate and average rewards value. The 6 percent bonus that you earn on U.S. supermarket purchases and 3 percent bonus on gas and department store purchases actually pushes the overall rewards much higher than 2 percent for the average cardholder. The card does come with a hefty $95 fee, but as our table below shows, with the fee included, the average rewards value of $370 still far exceeds the value of the Citi Double Cash card.
|COMPARING CASH BACK CARDS
|Credit card||Bonus value||Average rewards rate||Average annual value ($15,900 yearly spend)|
|Citi Double Cash||N/A||2%||$318|
|Chase Freedom Unlimited||$175||1.5%||$296|
|Blue Cash Everyday||$150||1.64%||$311|
|Blue Cash Preferred||$200||2.51%||$370|
|Discover it chrome||$205||1.29%||$273|
|Capital One Savor||$150||1.51%||$290|
|Wells Fargo Cash Wise Visa||$206||1.5%||$307|
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