Chase Cash-Back Card

Chase advertised its Freedom Rewards Credit Card as a way for consumers to earn 5% cash back … on select purchases with a $75 cash-back limit each quarter. Capital One, a competitor, challenged Chase’s advertising with The National Advertising Division (NAD) is the advertising industry’s self-regulatory body administered by the Council of Better Business Bureaus., claiming the 5% claim confused consumers into believing they could get 5% cash back on all purchases.

According to Capital One’s challenge:

Chase’s five percent cash rewards are limited to bonus categories that rotate quarterly; require special activation quarterly; and have a $1,500 cap on combined purchases in the specified categories. Capital One noted that the maximum a customer could earn in cash-back awards was $75 a quarter.

Capital One, which apparently got really into this challenge, also commissioned a consumer-perception study that found 50.8% of respondents interpreted Chase’s advertising to mean they would earn 5% cash back on all purchases with the Chase Freedom Rewards Credit Card.

After review, NAD suggested that Chase modify its advertising to make clear that

• The bonus rewards require quarterly activation
• Are available for only a limited time in specified categories
• Are subject to a spending cap of $1500, and avoid simultaneous distracting audio and visuals.

Chase responded that it “supports the self-regulatory process, and to enhance consumer transparency, Chase will take into account NAD’s recommendations in formulating future Chase Freedom 15-second spot and banner advertising that features the five-percent bonus.” Which in our experience tends to mean “that’s nice, but we’re not going to change anything because it’s working.”

For more on credit cards offers, click here.