Stretching my rewards 10% further with the Chase Freedom Flex

There have been some silver linings of the pandemic – more family time, less commuting and a greater appreciation for the great outdoors are three of mine. In the credit card world, I’d list Chase’s Pay Yourself Back program as a pandemic-inspired innovation that I hope will stick around.

The bank initially rolled this out in May 2020 on its popular travel cards: the Chase Sapphire Reserve and the Chase Sapphire Preferred Card.

In an acknowledgment that most people weren’t traveling, Chase began allowing cardholders to redeem their Ultimate Rewards points for statement credits to offset eligible grocery, dining and home improvement purchases.

Whereas cash back statement credits are normally worth 1 cent per point, the Pay Yourself Back redemptions are worth 1.5 cents per point on the Sapphire Reserve and 1.25 cents per point on the Sapphire Preferred. Those are the same elevated valuations that cardholders used to receive only when they booked travel through Chase.

The program was initially supposed to expire at the end of Sept. 2020, but Chase has extended it multiple times and it’s now slated to run through Sept. 2021. I hope it lasts even longer.

In addition, Chase has expanded the program a few times, and I recently took advantage of it on my Chase Freedom Flex℠ card.

How to get 10% more value from your points

From July 2 through Sept. 30, 2021, the Freedom Flex, Chase Freedom Unlimited and original Chase Freedom card (which is closed to new applicants) are offering a 10% bonus on Ultimate Rewards points redeemed to offset eligible dining purchases (up to $250 in credits).

I recently cashed in 3,650 points for a $40.16 statement credit. In other words, instead of a standard cash back redemption worth $36.50 (1 cent per point), I got $40.16 (10% more value, or 1.1 cents per point).

If you want to do this, however, it’s a little hard to navigate. I logged in to my Chase account and clicked on the Ultimate Rewards section. Next, I clicked on Earn/Use in the upper left and selected Pay Yourself Back. I appreciated how I could make partial redemptions, using all of my available points even if they didn’t cover the entire dining bill.

Freedom Flex cardholders normally earn 5% cash back on rotating categories (note that activation is required and the 5% rate applies on up to $1,500 in quarterly purchases, with 1% cash back after that), travel purchased through Chase Ultimate Rewards and Lyft purchases (through March 2022).

In the second quarter of 2021, the rotating categories were gas stations and home improvement stores. This quarter, they’re grocery stores (excluding Target and Walmart) and select streaming services. Thanks to the 10% rewards bonus, the 5% categories are essentially worth 5.5%.

There are also a couple of 3% cash back categories (dining and drugstores) that pay an effective 3.3% cash back during the promotion. And other transactions earn 1% cash back (1.1% after you factor in the 10% bonus).

The future of Pay Yourself Back

Even though this program started as a way to appease travel cardholders who weren’t traveling, I think keeping it around for the long haul could be a win-win for Chase and its customers. And there’s a chance this will happen since Chase has already extended and expanded the program multiple times.

On the consumer side, the main benefits are flexibility and potentially getting more from your points. For Chase, they keep their customers happy and encourage them to use their points. Since these show up as liabilities on card issuers’ financial statements, banks don’t love it when customers hoard points, and there has been a lot of that over the past couple of years since the majority of people haven’t traveled much.

Besides, most people – myself included – prefer cash back rather than travel rewards. By blending the best of both worlds on the Sapphire cards, Chase could gain a competitive advantage over its competitors, who tend to offer much lower cash back payouts on their travel cards. And on Chase’s Freedom-branded cash back cards, making those rewards 10% more valuable is a great incentive to keep them at the top of your wallet.

The Chase trifecta is already a popular way to maximize rewards by mixing and matching the bank’s offerings, and Pay Yourself Back makes it even sweeter.

Have a question about credit cards? Email me at ted.rossman@creditcards.com and I’d be happy to help.