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Chase Freedom Credit Card Closed to New Applicants: Here’s Why

When you open a new credit card, you are probably not worried about what might happen if it is interrupted. But card issuers are constantly coming out with new products for consumers, and old favorites can either be interrupted, rolled into a new card, or shut down from accepting new applications.

The latest example is the Chase Freedom® credit card. As of September 15, the Freedom Card is closed to new applicants. If you have the Freedom card, your card will not be canceled, but you have a few options for what you want to do.

Current Freedom cardholders can continue to use their card without modification, but you can also request a product change for another Chase card. Below, CNBC Select reviews these two options so you can decide what̵

7;s best for your needs.

What happens to your Chase Freedom credit card?

Existing Chase Freedom cardholders will not receive any notification from Chase about this change. Although you have two options for how to proceed:

  1. Do nothing and continue using your card without modification.
  2. Contact Chase and ask for product change.

If you choose the first option and do nothing, your Freedom card will continue to be serviced with all the benefits and there will be no difference. There is no forced migration to the new Chase Freedom Flex℠.

On the other hand, if you choose the second option, you can choose to change your Chase Freedom card to either the new Chase Freedom Flex℠ or Chase Freedom Unlimited® at any time. If you request a product change, your old Freedom card will be deactivated after activating your new Freedom Flex or Freedom Unlimited card.

Here are a few things to consider when deciding whether to keep your Freedom card or request a product change:

Which card suits your spending habits?

The Chase Freedom Card is known for 5% cash back up to $ 1,500 in combined bonus category purchases each quarter you activate (then 1%) and 1% on all other qualifying purchases. You may still like this rewards program, but you should consider what the Flex and Unlimited cards offer.

The Freedom Flex card offers the same basic rewards as Freedom plus 5% cash back on travel booked through the Chase Ultimate Rewards® portal and 3% cash back on dining and in pharmacies. The extra rewards allow you to make more money back with Flex.

Freedom Unlimited scrapes the bonus categories and instead offers a more straightforward 5% cash back on trips purchased through Chase Ultimate Rewards, 3% on dining and pharmacy and 1.5% on all other qualifying purchases. These are great prices if you are looking for a passive rewards program that requires no activation.

Do you want to earn a welcome bonus or benefit from special funding?

The only way to get a sign up bonus is to apply and be approved for a new card. If you make a product change, it will not be considered as a new application and you will miss out on the welcome bonus and intro 0% APR offer currently running on Freedom Flex and Unlimited cards.

Both Freedom Flex and Freedom Unlimited currently offer $ 200 cash back after spending $ 500 on purchases in your first three months from account opening and 5% cash back on purchases at grocery stores (excluding Target and Walmart) of up to $ 12,000 spent in the first year. This is an industry-leading offering, so you may not want to miss it by making a product change.

Plus both cards offer no interest on purchases for the first 15 months your account is open (then a 14.99% to 23.74% APR). You also miss out on financing new purchases if you make a card change.

If you want to take advantage of new card membership offers, your best option is to keep the Freedom card and apply for the Flex or Unlimited card.

What are the fees?

You should check the annual fee and the annual apr for the new card you plan to switch to. Fortunately, all Freedom cards have the same non-annual fee structure and interest rates, so there are no changes there.

Is your credit report deducted?

Sometimes card issuers review your credit report before switching you to a new card to see if you qualify. This can cause your credit score to temporarily drop a few points. Ask the customer service representative if a credit report is drawn before requesting a product change. If it is withdrawn and you are in the middle of applying for a mortgage, you may need to put up with switching cards until you close.

Bottom line

Despite the fact that the Chase Freedom card is closed to new applicants, existing cardholders can still benefit from the full card benefits. But if you are interested in switching to another Freedom card and do not mind missing a bonus, either Chase Freedom Flex or Freedom Unlimited is a great choice.

With Flex, you get the benefit of many of the same signature features in Freedom, such as up to 5% cash back on rotating categories and no annual fee plus new bonus rewards on travel, dining and in pharmacies. And Unlimited offers almost all the same features except 5% rotating bonus category rewards, though you can take advantage of 1.5% cash back on purchases outside of increased rewards at travel, dining and pharmacy stores.

Editorial note: Opinions, analyzes, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

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