United Airlines has a new ‘cash and points’ option for using miles to reduce the price of a ticket. It is not a good deal, and not a good use of miles. This began with a soft launch in August.
This new revenue-based redemption option uses miles at 1 cent apiece to pay down the cost of airfare. It sure seems like everything old is new again. In 2006 United introduced the ‘Choices’ program letting members use miles earned with a cobrand credit card at one cent against paid fares. This was their response to Capital One ads suggesting airline miles could never be used, and they limited it to miles earned by credit card as a result.
It was a bad deal then, and it’s a bad deal now that they’ve opened the idea up to miles earned from any source. It’s no longer a response to a competitor bank’s advertising, just a poor way to use miles, and actually more restrictive in some ways.
You’re not allowed to use more than 90% of the miles in your account, or redeem miles for more than half the cost of a ticket.
The only upside is that these are paid tickets you’re buying so they’ll earn miles and elite qualifying credit on the cash portion of the fare. (However these tickets can’t be credited to a Star Alliance partner program.)
If you’re redeeming your miles this way you shouldn’t be intentionally accruing United miles. Why not get a 2% cash back card, for instance, use the cash earned to buy tickets on United or another airline? And if you aren’t earning United elite status, credit your United flights elsewhere and redeem at greater value.
However if you’re flying United and redeeming to travel on United no matter what, and United is offering less than a cent per mile for a traditional redemption then this is better than that. The sad thing though is that they’ve spent money on the IT infrastructure to support this, and spent money marketing it.
(HT: Zach Griff)
Delta’s Pay With Miles, which allows you to redeem at 1 cent per mile for any portion of a ticket, has been around for years and is popular. People understand it is not maximizing miles but it can be useful nonetheless for people, especially for those with smaller balances. Not sure why bloggers take such a hard line on this
@Anthony – following Delta in the race to the frequent flyer bottom isn’t a defense of the move, it’s an indictment. And the point remains, if you’re redeeming your miles at 1 cent apiece you’re losing and shouldn’t be actively accruing the currency. “People do this” is all the more reason to shout it from the rooftops!
Ouch Anthony!
There is always a segment of society that is uninformed and uneducated. In this case they are points and miles uneducated. Therefore, United, Delta and others are more than willing to take advantage of them. Those of us who know better, are always looking for ways to turn the table on these clowns.
Anthony is right. Infrequent flyers with small balances benefit from paying with miles at a 1 cent valuation. Notice how Gary avoided rebutting this point. This us irrespective of indictments, rooftops, or being uninformed or uneducated. If you save up your balance for an award redemption over a long period of time you may find that by the time you finish saving, the award price has increased due to devaluations and award chart changes, if there is even an award chart at all. Then what do you do with your miles?
What do people feel is the best use of UA miles?
Any way to get .02 value per mile?
I’ll agree that the one case this may make sense is for an infrequent flier with a small balance. Which is what makes “You’re not allowed to use more than 90% of the miles in your account” such a slap in the face. I wonder what their marketing spin would be if asked why they have this rule?
I imagine the internal reasoning is that they want to keep you at least a little engaged. But even if you could zero-out your balance, since these tickets are mileage earning, you’d still end up with a balance when all is said and done.
Agreed with @swag – this is nakedly all about meeting UA’s corporate needs, not those of customers. Kirby’s fingerprints are all over it. They’re too concerned with customers having not enough breakage, and taking in hard cash (the 50% value cap meets both needs from UA’s perspective, while providing a limit on customer value for those least engaged).
DL does this better, and has for many years. IDK how UA screwed it up so badly, except out of fear of customers actually using it. That… seems confused. You WANT customers using it, because then they’re engaging with the program, and likely to continue doing so!
What a crap change for Mileage Plus I mean Mileage Minus.
Scott Kirby sucks.
I already assign UA miles an acquisition value of 1 cpm. In other words, I only acquire them only when there’s a promo for at least 3x on base spend, even though I plan to redeem for 2 cpm. This program’s floor value tells you exactly how to weight UA miles against other currencies. I’d rather see a 1 cpm floor than have UA miles turn into Bonvoy points
Its a fine redemption as long as your aquisition cost is less than a penny. For BIS miles, its fine, as the acquisition cost of these miles is zero. If you are paying for these miles via credit card spend, ie: giving up 2-5% cash back, then not so much.
Another charming Kirby move. The guy does truly have a gift for offering worse options to United customers. How’s that Polaris conversion from 2016 that he slowed down going?
Maybe if you’re leaving the program and have some orphan miles it’s a way to get rid of most of them. Otherwise a dumb way to use the miles for just about everyone.
Raif says:
November 16, 2021 at 7:42 am
What do people feel is the best use of UA miles?
Any way to get .02 value per mile?
Sure. Most international biz class tix can return .02-.04.
provided you get SaverFares. It has been the only way
I fly 1st/Biz on an international route.
Raif asks
What do people feel is the best use of UA miles?
Any way to get .02 value per mile?
Sure. Most international biz class tix can return .02-.04.
provided you get SaverFares. It has been the only way
I fly 1st/Biz on an international route.