Chase Bank is freeing up the way consumers handle their rewards through a new credit card offering which lets consumers choose points or cash for their loyalty.
The Chase Freedom card is a no annual fee card, which hit the marketplace last month. Chase is promoting the card as “the first and only credit card that gives consumers ultimate control over their rewards options, setting the standard for next-generation rewards programs.”
With the card, consumers earn one point for every dollar spent or can choose to earn cash at the rate of 1% of every dollar spent (a $100 purchase earns $1). The “freedom” consumers have is being able to convert their accrued points into cash or vice versa at anytime. For instance, 5,000 points, when converted, equals $50 in cash (mailed to consumers in the form of a check). As an added incentive, the bank is also giving consumers who earn $200 in cash rewards a $50 bonus.
“We’re happy to reward customers for their loyalty and for using the card,” said Doug Filak, senior VP-marketing, Chase. “If a consumer has built up enough points on our card to be able to redeem $200, they’ve been very loyal to us and that’s really why we’re giving them the bonus.”
Additionally, consumers earn triple rewards on eligible everyday purchases at grocery stores, gas stations and QSRs. Points can be redeemed for merchandise or gift cards at retailers such as Best Buy and Home Depot, or can go towards dining out at restaurants like The Olive Garden.
The card, which can be obtained at Chase.com/freedom, took the financial company 14 months to develop “to get it right,” Filak said.
“We were doing research with customers and knew they had busy, dynamic lives and were looking for something that helped them make life simple and flexible,” Filak said. “People need to be able to make changes as their lifestyle changes whether for travel, business or at home and we wanted to find a way to meet their need. It was essential to give consumers the flexibility to change their mind.”
The move by Chase is compelling as consumers may feel locked into a reward program that gives them little or no control, experts say. However, the Chase Freedom card enters a heated credit card rewards industry hungry for new ways to draw consumers via incentives. Added to the mix is a broad spectrum of merchants that partner with banks such as Chase to offer their own reward-based credit cards.
The company believes the card will do well in a competitive industry in which some 60% of consumer offers are rewards-based, Filak said.
Direct mail pieces, banner ads on Yahoo, MSN, CBS Sportsline, TV and print ads in Sports Illustrated, Time and People magazines support. New York City-based McGarry Bowen produced the ads. The Think Tank, New York City handles the online component. Delaware-based Chase is a division of JPMorgan Chase & Co.