Starting April 2, United is changing how mileage is earned for flights in order to push customers to get their credit card. They’re also marketing changes to how award travel is priced – to make clear that if you want to get value from your points, you need to hold a MileagePlus credit card.
I wrote yesterday that I expected United to restrict the best awards to cardmembers and to charge non-cardmembers more for awards. They’ve announced this, but they also now announced changes to how miles for flights are earned as well.
Gutting Mileage-Earning For Non-Cardholders In Order To ‘Reward Cardmembers More’
United is reducing mileage-earning for customers without a credit card by 2 miles per dollar, and they are increasing earning for those who have one by 1 mile per dollar. This will be frustrating for members residing outside the United States in foreign markets where United doesn’t offer a card.
No annual fee and co-brand debit customers will earn fewer miles until they spend $10,000 on their card in a calendar year (earning it for the rest of that calendar year and the next one).
| Status | Current Earning | New Earning | New Cardmember Earn | ||
| General member | 5 miles/$ | 3 miles/$ | 6 miles/$ | ||
| Premier Silver | 7 miles/$ | 5 miles/$ | 8 miles/$ | ||
| Premier Gold | 8 miles/$ | 6 miles/$ | 9 miles/$ | ||
| Premier Platinum | 9 miles/$ | 7 miles/$ | 10 miles/$ | ||
| Premier 1K® | 11 miles/$ | 9 miles/$ | 12 miles/$ |
They’re taking away as much as 40% of mileage-earning (from base members) while giving as little as 9% more (to 1Ks with a credit card). But this allows United to say that ‘cardmembers can earn twice as much as non-cardmembers’ (general member).
There’s a strong recognition that MileagePlus is a credit card program, rather than a tool for putting people in seats.
At the same time, the risk in making the program so much less valuable for non-cardholders is that they won’t nurture and grow the top of the funnel – program members who value MileagePlus enough to be a big pool to draw card conversions from in the first place. On the other hand, perhaps offering Starlink internet onboard in exchange for joining MileagePlus could be enough to compensate for this.
More Earning With MileagePlus Credit Cards
They are also increasing the multiplier for uhying a ticket with a MileagePlus co-brand card.
- United Explorer card will earn 3 miles per dollar on United purchases (up from 2 miles per dollar)
- United Quest card will earn 4 miles per dollar on United purchases (up from 3 miles per dollar)
- United Club card will earn 5 miles per dollar on United purchases (up from 4 miles per dollar)
There is no change to the earn rates on other United cards. And United cards still won’t be the best for earning points on United purchases (Amex Platinum is better at 5x, and booking through Chase’s portal with a Sapphire Reserve earns 8x).
This doesn’t move the needle a ton, especially on non-United spend, but helps keep the cards competitive for United spend.. and helps them market a bigger number of miles per dollar spent that elite members with the credit card will earn. E.g. it lets them say that a 1K with the United Club card earns 17 miles per dollar, even if that’s a bit disingenuous because it doesn’t account for the opportunity cost of paying with another credit card (you’re giving up 5 or 8 points).
Reduced Mileage-Earning On Basic Economy Fares
United is eliminating mileage-earning on basic economy fares for general members without the credit card, effective April 2 – and deducting those 3 miles per dollar from everyone else’s earning.
As a result, general members with a credit card will earn 3 miles per dollar on basic fares. And those with status will earn:
- Silver: 2 miles per dollar, but 5 if they have the credit card
- Gold: 3 miles per dollar, but 6 if they have the credit card
- Platinum: 4 miles per dollar, but 7 if they have the credit card
- 1K: 6 miles per dollar, but 9 if they have the credit card
Kids Not Age-Eligible For A Card Only Partially Left In The Cold
Children of cardmembers can have their accounts linked so they get the benefit of higher mileage-earning as well. That’s important – kids can’t get the card themselves, and United doesn’t want to punish family members of those who are engaging in the behavior that they want. But it does mean that kids won’t accumulate as many miles when they fly if their parents don’t happen to be in the position to get an eligible card (or spend enough on it in the case of no annual fee and debit products).
That’s a little bit weird in a broader moral universe vis-a-vis inequality, something that flying generally used to represent but has certaily become democratized in recent decades.
I would have preferred to see the reduced mileage-earning apply only to members without the card who are 18 years of age or older, or to accomplish the same thing they could have framed it as bonus mileage-earning for young flyers (under 18 earns the cardmember bonus without the card). That way it would apply to all children, not just those financially fortunate by circumstance of birth.
Higher Award Pricing For Non-Cardmembers And Those Without Status
Delta Air Lines charges customers without their credit card more SkyMiles for award tickets. They call this a cardmember benefit, ‘TAKEOFF15’ where they apply a 15% discount for cardmembers. (We saw what appeared to be a general price increase concomitant with the introduction of this benefit.)
United has long offered better award inventory (and therefore flights at lower prices) to their elite and cobrand cardmembers. Now they’re marketing this in a different way.
- 10% or more savings on United flight redemptions for cardmembers
- Elites with the card get at least 15% off
- Applies to United flights only, and doesn’t include ‘miles and money’ redemptions. The discount doesn’t apply to taxes and fees.
Primary cardholders can see their savings called out on United’s app and website, and soon United will show the discounted prices to everyone so customers can see exactly how much having a United card could save them on their travel.
For example, an award in United Economy® priced at 15,000 miles will now cost 13,500 miles – 10% less – for primary cardholders without Premier status. A United Polaris business class seat priced at 200,000 miles will now cost 170,000 miles – 15% less – for primary cardholders with Premier status.
Additionally, United is promoting “additional inventory of Saver Award seats in United Polaris business class” for cardmembers. What this really means – and it’s been in effect for months – is that they’ve mostly eliminated saver awards for non-cardmembers and those without status, making space available only to customers they’ve deemed more valuable. (This has also largely eliminated the use of partner program miles to redeem for United long haul business class – a kick in the teeth of joint venture partners like Air Canada and Lufthansa.)
In truth, these efforts are not new but they’re packaged differently. And they’re going to be aggressively promoted – so that MileagePlus members know that if they want to get value out of the program, they’re going to have to take the card.
Trying To Grow MileagePlus Profit 50% In Four Years
CEO Scott Kirby recently announced a goal of driving up MileagePlus profits by 50% in four years, something the airline failed to accomplish when he promised the same thing in 2021.
These efforts should drive card adoption. Card adoption alone has a relationship with growing card spend, but they aren’t the same thing. It’s interesting that the effort here is strictly conversion (get the card = unlock the benefits) and that there are no new incremental benefits for hitting spend thresholds. Surely they should consider this at some point as well.
If any one from United is paying attention, I used to spend a minimum of $5,000 and frequently more per month on my United card earning 1.5 points per spend on anything. When they took that away now I may average less than $1,000 now. Most of that spend went to American where every dollar earns status and Hyatt where every $5,000 gives me two night stays. A message to all credit card issuers do not mess with what works unless you are making it better. Delta points are mostly useless, I have not used my Delta card in over a year or my Southwest card, they will be eliminated soon.
United miles are so much less valuable now I’m not sure this will have the desired effect. One world programs are way more lucrative for spend and flying
So, Gary, as I understand it, as an elite, I will lose just 5% award savings on United Economy class tickets if I don’t have their credit card and some miles on revenue flights?
I think I can endure that haircut.
Sounds like UA ran out of patience with their Frog boiling efforts, going all in with a blow-torch now
American is just about the only program left that hasn’t over-complicated matters. This latest UA update makes their program even more confusing than DL’s, and that’s difficult to do to begin with. Hopefully customer fatigue drives numbers in the opposite direction they are planning on.
One wonders if they are doing anything more special to convince their Global Services members to get/use a United card. They seem to be the most likely to move the needle on United card spend. Matching the Sapphire rate for earning when buying from United directly would be a start, and lowering the threshold for getting GS for putting significant spend on the card would be a second.
Let’s say I’m booking a flight for my family, which includes my spouse and minor children. I purchase all the tickets using my United card. If the card is only in my name, does my spouse suffer the new points penalty?
@KP – Yes, unfortunately.
Did they remove the 75k cap in earnings per ticket?
This is part of a terrible trend. The airline alliances that were built up over decades are rapidly starting to get ripped apart out of short-term thinking and greed (like a shift in time preferences in a prisoners’ dilemma from Game Theory).
Restricting saver awards or business/first class redemptions to only program elite members or cardholders will ruin the alliances once alliance members eventually respond in-kind. The alliances will increasingly become PINOs (partnerships in name only).
This will, if not reversed, in turn eventually destroy the value of the frequent flyer mile ecosystems (like a snake eating its own tail). Why bother getting involved in frequent flyer ecosystems at all if the partnerships functionally disintegrate?. Why get a transferrable currency card if the transferrable currency can’t actually broadly unlock high quality redemptions? The future of the entire travel rewards industry looks bleak if this exclusionary trend continues. The airlines will come to regret destroying the alliances if they eventually have to rely only on cash purchases for premium cabin seats after customers reluctantly defect to pure cash back cards.
The alliance leadership should proactively stop this trend by setting alliance rules and standards. If alliance leadership is feckless then new alliance organizations should be created. Alliance members should be required to implement non-discriminatory redemption rules (award space should be available to all alliance members in good standing on an equal basis with no restrictions on premium cabins or lounge access). Alliance members who restrict saver award space to just their own program should be quickly kicked out of the alliance to provide a deterrent and to prevent an escalatory spiral that functionally unravels the alliance entirely.
As long as Chase is 3x on spend on travel, United isn’t going to get me to spend any more than absolutely necessary on their cards (meet signup bonuses and 25% off in-flight/lounge purchases) until they make their PQP spend bonuses competitive with other airlines. You want me to spend $100k+ a year on your card at these earning rates? You have to get me at least halfway to 1k.
MAAYBE next year when I switch my club card from a business to personal card I’ll put my United spend on it for the 5x bonus. (Also ridiculous that the personal card Untied spend rate is 5x and business card United spend rate is 2x.)
Igive props to united that their 15% cardmember redemption discount is real – it’s 15% off what awards were priced at before they added the discount.
Miles have been hyperinflated so much that a 10% discount won’t matter.
Have not flown United in about a decade. So now it seems I’ll fly them even less.
Thank you United for completely screwing over your overseas customers who aren’t able to get a USA credit card.
I was happy to be Silver this year and had booked 5 flights accordingly for May/June. I’ll now be looking to cancel these and rebook alternative and cheaper airlines and also will be burning my rather large stash of United miles. The removal of the excursionist perk was the thin end of the wedge, this is the fat end. Goodbye United.
@ Gary — All the details are just a clever disguise of the bottom line — theire screwing every single customer one way of the other. They can go pound sand.
@Gary, do we know whether the Enhanced Polaris Saver Award Availability is given to ALL who hold the no fee Gateway credit card? Or, with the Gateway, is that benefit tied to a spending minimum (as is the case for the 10% price discount)? The T&Cs aren’t clear to me on whether there’s a spending minimum for the enhanced award space. Thanks, if you know.
This works for me, as I’m a United credit card holder. If this gets me better awards on flights, super. It’s all part of the game and you either agree to play or you find another team.
For me, I just bank miles and then use them on a huge vacation every 3 or 4 years. For regular domestic flights, I buy in cash, usually first class so I get to avoid Peasant Land in the back (go ahead, hate me). Oh, and the two complimentary lounge passes a year I get as a credit card holder don’t hurt, either. Neither does the $100 travel bank money that I can put towards a flight as a credit card holder, which partially offsets the yearly fee.
Thank you, United!