Update: Chase Freedom Announces 5% Cash Back Categories For Q4 17

Financial IndependenceEarlier this year, I wrote about our attempt to optimize our credit card usage to maximize potential rewards.

Since we aren’t frequent travelers, I focused on finding a card with attractive cash back features, rather than a card with great perks for world travelers. We signed up for a Chase Freedom Credit Card in the spring, which has been a smart financial decision thus far.

As a reminder, Chase Freedom offers 5% cash back on up to $1,500 in purchases in specific spending categories each quarter, and 1% cash back on everything else. Our Fidelity Rewards card offers 2% cash back on all purchases.

To date, we’ve earned $260 in cash back since getting the Chase Freedom card, including sign up bonuses, but the pace at which we earned rewards from our new card slowed dramatically during the third quarter.

As I mentioned three months ago, the bonus categories for Q3 17 were Restaurants and Movie Theaters.

I thought we’d be unlikely to spend much in those categories, and I was right. We’ve spent just over $200 at restaurants so far during Q3, and nothing at the movies.

Even though I bring my lunch to work more often than I did in the past, I still purchase lunch at work with some frequency. Almost all of our spending on Chase Freedom since the beginning of July was at the cafeteria at my office, which fortunately qualified as a restaurant for purposes of the bonus rewards. We did eat out once when we were on our summer vacation, but the restaurant we ate at did not accept credit cards, so we weren’t able to earn cash back on our biggest restaurant purchase of the quarter!

Fortunately, it will probably be a bit easier for us to earn bonus rewards from our normal spending patterns during the fourth quarter. I received an email from Chase yesterday announcing the 5% bonus categories for Q4 17, which include spending at Walmart and Department Stores.

While we shop at Walmart less than we did before we became Costco members, I still probably go there once a month to stock up on household or personal care items. The 5% bonus also applies to shopping at walmart.com, where we might end up making a purchase or two as we get closer to Christmas.

The 5% bonus on department store shopping is probably very attractive to some people as they prepare for the holidays. Macy’s, Kohl’s, Nordstrom, Sears, and J.C. Penney highlight the list of a few dozen retailers that qualify as department stores according to the folks at Chase. Target is specifically excluded, for those who were wondering.

Honestly, we’ll probably earn most of our bonus rewards during Q4 at Walmart. Mrs. ROMT and the children make an occasional trip to Kohl’s or J.C. Penney, but I don’t think our family will spend much at department stores over the next three months. Based on our experience at Sears a couple of months ago, we probably won’t be doing too much spending there!

When I originally posted about signing up for the Chase Freedom card in May, I estimated we’d receive about $300 in total cash rewards from the card this year. Now that we have another quarter of spending on the books and know the bonus categories for Q4, I think we will probably come up a little short of that target. I’d be surprised if we spent more than $500 at the retailers that qualify for bonus cash back over the next three months, and the final number could be well below that.

Use of the Chase Freedom card in tandem with our trusty Fidelity Rewards Card is moving us in the right direction on our path towards financial independence, but here’s hoping the 5% reward categories for 2018 are more aligned with our normal spending patterns. We’re crossing our fingers that grocery stores, gas stations, and warehouse clubs will be among the 5% bonus categories next year!

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