On April 1st I bought a $25 Costco Cash card on Costco.com with one of my 3 Freedom Visa cards. The charge finally posted to my account and I can confirm that it earned 5 points per dollar:
While you can use any card type to shop on Costco.com, you won’t be able to use a Visa in Costco stores until 6/20 when Costco switches from AMEX only to Visa only. But you can buy cash cards online with free shipping and use those in Costco stores.
Be sure not to wait until the end of June to try this, as it took a week for Costco to actually make the charge.
Chase Freedom is an excellent no annual fee card thanks to its quarterly 5% categories. While they call it 5% cash back, you’ll really get 5 Ultimate Rewards points per dollar spent which can be worth much more than 5% cash. For $1,500 in spending per quarter you will earn at least 30,000 Ultimate Rewards points over the course of a year (7,500 points per quarter at 5 points per dollar spent).
While Chase Freedom is a great card for the bonus categories, it’s not a great card for everyday spending. However the brand new Chase Freedom Unlimited card is excellent for everyday spending.
2016 Chase Freedom bonus categories:
Q1: Gas stations and local commuter transportation
Q2: Grocery stores and wholesale clubs like BJs and Sams Club. Effective 6/20 Costco will also start accepting Visa cards and should qualify as a wholesale club.
Q3: Restaurants and more to be announced.
Q4: Holiday shopping (Likely Amazon.com and more to be announced)
Freedom alone can’t transfer points into much more lucrative airline or hotel miles, but if you or your spouse has a Sapphire Preferred or Ink Plus card then you can transfer points from Freedom to one of those cards and from there to your favorite travel currency. You can read at the end of this post which currencies they can transfer to and why those points are much more valuable than just taking cash back. The Freedom card can also keep your points alive for free if you do close one of those cards.
The value of the points will be based on where you use them, but if you use those points for a trip worth where they are worth 2 cents each then you’ll have effectively earned 10% back on those “5 point categories.” The sky is the limit of the value of airline miles as they aren’t tied to the cost of a ticket. That’s good for people in the know and bad for those who are not. 1 mile can be worth 0.25 cents or it can be worth 25 cents, it all just depends on how you use them!