Wealth and Wants

How to maximize the Q3 Chase Freedom categories

Get your car fixed up at a gas station, and buy some gift cards there while you wait to make the most of 5 percent cash back


From July to September, Chase Freedom will offer 5 percent cash back at gas stations and select streaming services, capped at $1,500 in spending after you activate. Here’s how to get the most cash back from these categories.

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The Q3 Chase Freedom 5 percent cash back categories (gas stations and select streaming services) are going to be tough for most people to maximize.

But fear not, there are some things you can do to boost your return. It just won’t be nearly as easy as last quarter. Remember that the 5 percent cash back offer is capped at $1,500 in spending each quarter, after you activate. The Bureau of Labor Statistics reports the average U.S. household spends just under $500 on gas in a typical three-month span. So you’ll need to get creative in order to wring out every last drop of value.

Including select streaming services – a first for the Chase Freedom – will help, but most households aren’t spending all that much in that area, either. The most expensive Hulu plan is $50.99 per month. A premium Netflix subscription runs $15.99 a month and a monthly family subscription to Apple Music is $14.99.

Someone with all three spends roughly $246 per quarter. The average gas consumer who’s also a high-end streamer is still only about halfway to maximizing the July-to-September Chase Freedom categories.

See related:  Best credit cards for streaming services

Tips for maximizing your spending

Have you been putting off car maintenance? If so, Q3 would be a good time to catch up on that stubborn check engine light, squeaky belt and overdue oil change.

Your Chase Freedom card will give you an effective 5 percent discount on whatever work your car needs. (Note that for this strategy to work, you need to get the maintenance done at a gas station, not a car dealership or a service station such as Firestone, Jiffy Lube or Valvoline.)

Also, stock up on gift cards at the gas station. Major gas brands generally have their own gift cards that you could buy in Q3 and use later in the year, effectively extending your 5 percent cash back. An added bonus: paying with a gift card scores you the lower cash price at gas stations that charge more for credit.

Some gas stations even sell other gift cards for restaurants, retailers and so on. This opens up a lot of 5 percent cash back possibilities if you can find a gas station with a good selection.

See related:  3 ways to stack your rewards at the gas station

You can’t win ‘em all

Chase is, after all, a for-profit business. If it’s paying out 5 percent cash back and pocketing a 2 or 2.5 percent interchange fee, the bank is actually losing money, especially when you count staff costs, technology expenses and the other companies that take cuts from each credit card transaction.

Yes, Chase earns interest when cardholders carry balances (ranging from 16.49 percent to 25.24 percent variable APR on the Freedom card, depending on credit quality). But as smart rewards chasers, we know that rule number one in any credit card rewards strategy is to pay your bills in full to avoid interest.

To that end, Mark Graf, the chief financial officer at Discover (the other company that offers a popular 5 percent cash back card with rotating quarterly categories, capped at $1,500 in spending upon enrollment), said this during his company’s most recent earnings call:

“The grocery category is the most lucrative. It’s really easy for people to engage and max out the benefits. If you think about it, to spend $1,500 in groceries in the quarter, you only need to spend something less than $125 per week. So not a lot of people spend it on gas, but a lot of people spend that on groceries.”

Translation: for every blockbuster category like groceries, which cost Discover a lot of marketing dollars in Q1, issuers are going to throw in some more margin-friendly promotions such as gas.

Streaming is a particularly smart one from the issuers’ perspective because these are recurring subscriptions in most cases. If Chase can get you to set your Netflix, Hulu or Apple Music subscription to its Freedom card in Q3, I’m sure it’s banking on some people forgetting to switch it back in Q4. And then that habit will cost Chase just 1 percent cash back, which is profitable even when the cardholder pays in full.

See related:  9 ways to make cash back more fun

One final tip

This brings up another way you can play card issuers off each other to your advantage. You could sign up for both the Chase Freedom and the Discover it® Cash Back. Their rotating categories complement each other nicely.

For instance, you could have gotten 5 percent back on groceries from Discover in Q1 and Chase in Q2 after activating their respective bonus categories. Chase offered 5 percent back at gas stations in Q1 and Q3 and Discover did so in Q2. In Q3, Discover’s 5 percent categories are restaurants and PayPal, which are more lucrative for many people than gas stations and streaming services.

It’s like investing in stocks and bonds. When one is up, the other is usually down. But when we’re talking 5 percent cash back, everybody wins.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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