Delta and United Both Report: People Aren’t Shifting To Cash Back From Mileage Credit Cards

by Gary Leff

United Airlines told investors on Tuesday that while new card applications are down, and that’s expected to last 6 to 12 months, spending volume is reduced only in line with current economic conditions. In other words, they don’t find that people are taking their current spending and shifting away from earning miles to cash back or other rewards.

That’s consistent with what Delta also told investors on Tuesday. The airline’s CFO, Paul Jacobson, suggested that the “brand proposition for miles versus cash is unchanged.”

He acknowledges SkyMiles members taking “a little hiatus when people aren’t going to travel,” but that the program still continues to motivate spend because it gives people “something to look forward to [the] prospect of saving up for something.”

Giving us a window into how Delta’s charge volume compares with that of other American Express products, which he’s privy to based on data their co-brand partner shares with them, he suggests that there hasn’t been a shift to other products – that spending reductions are in line with those of other cards. He says Delta hasn’t “seen proportional shift or bigger shift of demand for sales on Delta-related cards” versus American Express’ other cards, and that “everything is in line with pre-Covid.” As a result they project Delta card spending will grow as the economy recovers.

While spending in travel and entertainment is down markedly other spend has held up better. Nonetheless Delta and United reporting that spend volumes on their cards are consistent with those of non-travel rewards products seems contrary to data from Chase that their heavily travel-focused portfolio has seen spending drop 40%, an above average figure for an issuer.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. If Jacobson is correct, I am surprised. I have moved all my spending to cash back, except when it’s a bonus category in a transferrable points program. I wonder what percentage of co-branded cardholders just use a single card for everything. Perhaps those of us who think things through to try to maximize value are a small minority in the larger scheme of things.

  2. I’m based in the UK so we dont have the same wealth of options, but i switched all my miles spending from miles credit cards to Amex points (which provides transferability) and to a cashback Barclaycard. It didnt make sense to get miles from any UK airline at the moment.

  3. I’ve moved my spending to either cashback or a card with multiple options to use the points (Sapphire)

    Cancelled 2 airline cards already this year

  4. Moved most 95% of spending to cash back cards
    Less to do with corona virus and more to do with deltas overpricing awards which eventually led to most of the airlines doing it over the years
    And I’m sitting on millions of miles as I over consumed with now no place to go safely
    and the possibility of airlines perishing
    I never flew Delta typically though except in a push come to shove situation
    Devaluation and horrific customer service along with the virus and it could be years before I will ever go back to 200 nights a year in hotels flying globally

  6. I have moved all spending to cashback and cashed out amex at 1.25 cpp. Gotta have your money/points working for you at all times.

  7. Shifting money from ETrade premium savings (previously paying 1.75%, now paying 0.05%) to Bask Bank. Fingers crossed I can use the AA miles some day.

  8. I have shifted all of my non-AA ticket spending to two 2% back credit cards the past year.

  10. I suspect this has a lot to do with the fact that a lot of people don’t pay much attention to the miles and points world (or the broader credit card world) and just put most of their spend on one credit card.
    Most Delta/United co-branded cardholders are probably used to putting their groceries/clothes/dining/travel all on their airline card (regardless of how good or bad their return is) and that hasn’t changed even though the travel world has shut down.

  11. 1
    They are not telling you how much they dropped
    If DL dropped 50% and so did Amex Membership rewards – they can claim no relative drop
    2
    If UA is looking at Chase Ultimate rewards as a comparison, perhaps both dropped 40% as people shifted to Citi

    I for one have gone full cash back and would recommend it to anyone
    You can always buy miles for 2c

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