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Grocery spending may have reached its peak earlier in the pandemic, but it remains an important category for U.S. consumers. Many popular cards have offered limited-time bonuses on groceries as spending shifted from travel and other discretionary spending.
This latest offer from Chase furthers that trend. For new Chase Freedom Unlimited cardmembers, you'll now be able to receive a $200 sign-up bonus after spending $500 on purchases in the first three months, along with 5% cash back (5x) on grocery store purchases (excluding Walmart and Target) on up to $12,000 spent in the first year.
This is hot on the heels of a temporary Chase promotion for existing Chase Sapphire Preferred Card and Chase Sapphire Reserve cardholders on Instacart orders. With that offer, you received 3x points on Instacart delivery and pickup orders on the Preferred and 5x points on the Reserve.
Is this a good offer for the Chase Freedom Unlimited?
Previously, the sign-up bonus on the Chase Freedom Unlimited was $200 (or 20,000 Ultimate Rewards points) after spending $500 in the first three months. That part hasn't changed.
However now new cardholders will also receive 5% cash back (or 5x Ultimate Rewards points) on grocery store purchases for the first year (on up to $12,000 for the year). Five Ultimate Rewards points are worth 10 cents (according to TPG valuations) so that tops our list for the best grocery card — at least for the first year of card ownership.
The card already offers unlimited 1.5x on every purchase (with no limits to earning) so a 5x and 1.5x combo for that first year is pretty lucrative. Additionally, you can also earn 5x points or cash back every time you take a Lyft ride, through March 2022.
Finally, you'll get a 0% intro APR for 15 months from account opening — perfect if you have any upcoming large expenses. Of course, we recommend paying your card balance in full so you don't accrue any interest after this promotional period.
Earning Ultimate Rewards points
Pairing the Chase Freedom Unlimited with an Ultimate Rewards-earning card is where you can unlock outsized value. By converting cash back rewards into fully transferable points, you can take advantage of airline and hotel partners and increased redemption rates on Chase's travel portal.
Cards that earn Ultimate Rewards points include the Chase Sapphire Preferred, Chase Sapphire Reserve, and the Ink Business Preferred Credit Card.
The information for the Ink Business Preferred card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
If you have one of these cards, it's a no brainer to couple it with the no-annual-fee Chase Freedom Unlimited. Keep in mind all Chase cards are subject to the 5/24 rule, essentially limiting consumers from opening any new Chase card if you've opened five or more personal cards across all banks in the last 24 months.
What counts as groceries?
Chase notes that superstores such as Target and Walmart do not count toward the 5x grocery store bonus. This is nothing new, as the grocery category typically limits these stores from bonuses along with membership warehouses including Costco, Sam's Club and BJ's.
However, the exception to this is grocery delivery services such as Instacart. If you use these services and you're billed through them, purchases should be categorized as groceries.
Other cards to consider
If you're interested in a credit card that earns cash back — and also has ability to earn more lucrative transferable points — the Citi® Double Cash Card is another compelling option.
The card actually offers a higher 2% cash back on all purchases (1% when you buy plus 1% as you pay). Plus, Citi now allows cardholders to convert their cash back to ThankYou Points via a linked ThankYou account.
The Blue Cash Preferred® Card from American Express earns 6% cash back at U.S. supermarkets (on up to $6,000 of spending each calendar year, then 1%). It's one of the best cash-back cards on the market, especially during the pandemic. The card's bonus categories are perfect for being close to home: supermarkets, streaming, and gas.
Bottom line
If you don't yet have the Chase Freedom Unlimited, now is the perfect time to apply. With no annual fee, 1.5% cash back on everyday spending, and this new elevated 5x grocery bonus for a full year, it's the ideal card to pair with an Ultimate Rewards card.
The card has always been designed to provide value for everyday spending — and this 5x bonus squarely puts it in our best cards for groceries too.
Featured photo by John Gribben for The Points Guy.
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