Chase Freedom and Chase Freedom Flex cardholders can now activate their 5% cash-back categories for the first quarter of 2021. And with the coronavirus pandemic continuing to shape consumer spending habits, the bank has made a tweak that could help cardholders maximize their rewards.

Key Takeaways

  • Chase has introduced its Freedom 5% bonus categories for the first quarter of 2021.
  • Cardholders with Freedom or Freedom Flex cards can earn 5% cash back on up to $1,500 in combined purchases at wholesale clubs and on internet, cable, and phone services, plus select streaming services.
  • The wholesale club category replaces gas stations, which have been included in first-quarter bonus categories for the last few years. The other two categories are also relatively new to the 5% lineup.
  • Cardholders must activate their bonus categories by March 14, 2021, to receive the accelerated rewards rate.

Pandemic-Influenced Bonus Categories

The coronavirus pandemic has forced people to stay home more often and spend more on groceries instead of eating out. Many major credit card issuers have responded by altering or adding benefits and bonus rewards categories.

The Freedom cards’ 2021 first-quarter categories go along with that trend, focusing on some of the more common expenses consumers have in the era of social distancing. 

For example, with more employees working from home, it’ll be tougher to maximize rewards on gas station purchases without a commute. Replacing that category with wholesale clubs allows cardholders to stock up on bulk food and household items to make staying home more convenient. 

And with fewer opportunities to go out, consumers can enjoy better rewards on at-home entertainment via streaming, cable, and the internet.

Maximizing the New 5% Categories

If you have one of these cards, the first thing to know is that the 5% bonus rate doesn’t come automatically—you’ll need to activate the promotion by March 14. The good news is that even if you wait until the last day, you’ll receive the higher rewards rate on qualified purchases retroactively. 

Cardholders can activate through the email from Chase announcing the new categories or by logging into their online account or mobile app, by phone, or by visiting a Chase branch. 

Once you’ve activated, check whether all of your eligible recurring expenses for streaming, internet, cable, and phone services are billed to your Freedom credit card. Note, however, that only the following streaming services are included: Disney+, Hulu, ESPN+, Netflix, Sling, Vudu, Fubo TV, Apple Music, SiriusXM, Pandora, Spotify, and YouTube TV. 

If you normally purchase grocery and household items at a supermarket or superstore, consider switching your shopping trips to wholesale clubs like Costco, Sam’s Club, or BJ’s. Just keep in mind that wholesale clubs charge annual membership fees, so it might not be worth it if you’re not already a member. Also, Costco only accepts Visa credit cards, so Freedom Flex cardholders are out of luck there. (Freedom Flex is a Mastercard.)

What's it worth to you? If you coordinate your spending with the card’s new bonus categories, you’ll be able to earn up to $75 in cash back in addition to rewards earned on all other purchases.