Chase Freedom Rewards Credit Card Upgraded

Over the weekend, we received a letter from Chase telling us that our Chase Freedom Rewards card had been “upgraded” to a Chase Freedom Visa Signature card. From what I’ve heard, card companies like to upgrade customers to Signature cards because they get to collect more in fees. Good for them, but what about us?

I’m still sorting out exactly what this means for us, but here’s a rundown of the benefits that they’re promising:

• No Pre-Set Spending Limit. Your account will no have a credit access line instead of a credit line which provides peace of mind when you need to make a large purchases — with no overlimit fees.
• Warranty Manager. Extends the life of your warranty and saves your purchase information for easy reference.
• Increased Purchase Security. Covers you if an item is accidentally damaged — up to $500 for 90 days after purchase.
• Complimentary Concierge Services. Offers opportunities for preferred seating at special events and free upgrades at fine resorts or spas.

My biggest concern with this “upgrade” has to do with the lack of a traditional credit limit. As you may or may not know, credit utilization is a major determinant of your credit score. I’m not sure how Chase handles this, but other card issuers have been known to report your highest balance in place of your credit limit, which can dramatically increase you apparent utilization (the percent of your credit limits that you actually owe) thereby dragging down your credit score.

The good news is that it appears you can opt out if you don’t want their new and improved card by calling the number on the back of your card. I’m still not sure what we’re going to do, but I’ll keep you posted…