Big Changes to United Mileage Plus Revealed By New Credit Card Launch

Yesterday I uncovered details on the new United Explorer credit card from Chase, a bit before they had intended to launch it, and divined some details on the future of the Mileage Plus program from the card’s terms and conditions.

One of the interesting things was that holding the card would prevent miles in your account from expiring due to inactivity (I guess this would be useful to people who keep the card and never use it, pay the $95 annual fee for the card, and never earn or redeem miles in their account, there can’t be that many of those people).

That was a giveaway that in the combined United-Continental program, miles would expire. United has had 18 month mileage expiration. Continental hasn’t expired miles. I fully expected that this would be the approach the combined program would take, though I doubt they intended to roll out expiring miles through the launch of the Chase credit card, and in that card’s rather buried terms and conditions.

Well, the card has officially launched today, and United has more details to share on Milepoint.

And there are some bombshells.

  • Upgrades on Reward tickets for Elites. Unlimited domestic upgrade benefits apply the same to award tickets as to purchased tickets “beginning in early 2012” for those elite members with the card. Presumably for upgrade prioritization, award tickets will be treated as the lowest fare class, so Premier Executives on award tickets will be below Premier Executives on paid tickets but about Premier members.

  • Last seat availability on standard awards will be restricted to elite members and cardholders. This is a huge break in the value proposition of the program — previously any Mileage Plus member willing to spend enough miles could have a seat on any United flight. That is no longer true. Following the Continental model where only their elite members had true last seat availability for additional miles, the combined program will offer this only to their own elites and now also to cardholders. Everyone else will have additional inventory for more miles, but not any seat on any flight.

These are big changes to the program, and unsurprisingly it represents a huge incentive towards getting members to adopt the card. In the case of non-expiring miles with Continental and last seat reward availability on standard (extra mileage) awards with United, it represents taking away benefits that were previously part of the program for everyone and telling members that they can only retain those benefits if they adopt the airline’s co-branded credit card.

None of which is surprising, I’ve long said that United flew through bankruptcy in order to support the underlying credit card business. The issuer of the United Visa provided debtor-in-possession financing for the airline entering bankruptcy, it provided their exit financing, and pre-purchased half a billion dollars worth of miles to provide liquidity. The card product is a major revenue source, and angling to get its combined 80 or 90 million members engaged with the card is a priority.

Still, and while I don’t like taking away benefits or holding them hostage in exchange for members taking specific actions like getting a credit card, I understand it and do like offering upgrades on award tickets. United is going a step farther than anyone else in the US market. Delta offers an option but prioritizes award tickets lower than othersof course with Delta full fare at lower status trumps even paid fares, here your status matters regardless of the fare paid. In other words, a loyal customer is important every time they step on a United or Continental aircraft, not just when they pay enough. The miles are the rewards for the behavior that the program incentivizes, just like Priority Club / Intercontinental Ambassador refusing upgrades on award nights I’ve never understood making elite members sit in back just because they were using their points.

So by the beginning of next year, this benefit would seem to suggest that every Mileage Plus member likely to fly domestically on an award ticket ought to get the card.

That means, interestingly enough, that members may recalculate a bit their purchase versus redemption decisions. Sure, they’ll need to purchase enough tickets to requalify for their status or reach for the next level. But 100,000 mile flyers might start using their miles more on domestic flights for personal travel instead of buying tickets out of pocket, when they’d previously likely have purchased those tickets in order to receive upgrades.

Apparently, Continental Onepass Plus cardholders will just ‘get the benefits’ without switching to this card, they do seem to see this card as a re-branding of the Onepass Plus card for the new combined airline (albeit with a $10 higher fee). United Visa holders can switch to this card with a phone call to Chase (provided Chase agrees).

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 Milepoint.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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  1. Any thoughts on what happens for 1Ks, especially those grandfathered in who do not pay the annual fee for their UA Visas today?

  2. Well, I’m not a loyal United flyer, and this won’t make me one. These days, my wife and I only travel for that “big vacation” or to VFR. So, I look to acquire miles as effortlessly as possible, and this card just won’t cut it.

    With the huge sign-up bonuses in recent history, to require spend of upwards of $10,000 to get a paltry 10k-15k miles just won’t cut it.

    I’ll go spend $25k on my SPG AmEx for 25k SPG points long before I spend $25k on this UA card to get a measly 35k bonus points.

  3. It seems they really want to wean people off of the EQM cards, like the UA Plat Signature cards which offered 5,000 EQM at signup, 5,000 EQM with 35K$ spend and 1 EQM for each $ spent purchasing on ual.com. That card is a major benefit to many I know who might easily do 35K a year and want to achieve 1P, yet know they can get about 10K a year in EQM just for combined spend. None of the new cards offer anywhere near this juicy and EQM benefit. I get it, they want people on the planes but it means I’ll pretty much never give up my current card – or get TWO and split the spend.

  4. I would imagine 1K’s will continue to have a statement credit well into 2013 as that was still a published benefit just a while ago.

  5. Am I the only one getting a 50K sign-up bonus when I click through to the application from united.com? This seems to put it on par with the promotion that expired yesterday…

    Also, am I the last to know that they’re rebranding the RCCs/PCs at “United Club,” as it says on the application page?

  6. Gary,

    After full fares (regardless of status), Delta prioritizes all upgrades by status and then fare class (including award fare classes), so United’s offering is not unique.

    For example, as Diamonds, my partner and I cleared upgrades for this Sunday at the “5-day” (really more like 6 days) window on Delta domestic coach awards.

    Delta is not ALL bad!

  7. Great analysis and read Gary. But they punished us all with the no prior cardholder sign up bonus clause. Will I get this card for no sign up bonus? I don’t think so.

  8. @Gene I’ve tried to clarify in my post. And I don’t think Delta is all bad — love the pimped out wifi and onboard entertainment compared to United/Continental, and the miles are useful for Air France and V Australia! (Not that I want to fly Air France business class vs most other carriers, and getting to LAX for the V Australia reward seats can be a challenge if you don’t live in an Alaska Airlines city.)

  9. If you book an award ticket for someone else using your card, will that person be eligible for upgrades? Will he/she be eligible for last-seat awards if you book for him/her using your card?

  10. @Drew- I’m also getting the 50K sign-up offer when I’m logged into my account. So, the bonus miles (targeted) seem to be as good as the old cards. Although, this card really doesn’t have much use for me…I’d rather have the old Select card that got you 3 miles per $ on United, 2 miles per $ on Star partners, and 1 mile per $ on everything else. This card to me is meh.

  11. I am quite happy with the United Mileage Plus Platinum Visa: the benefits of this card are excellent. I make use of earning 5000 EQMs for United.com purchases and can also earn 5000 EQMS more for spending 35K on the card in a calendar year. What is even better, the annual fee of $140 is waived for 1Ks whom opened their accounts before September 1, 2006. The upgrades on award tickets is a nice feature of the new card, but I really do not see much benefit to the MP Explorer card. Even if I had to pay the $140 annual fee, the MP Platinum Visa is far better in terms of EQM earning benefits.

  12. The other thing I see lots of people missing in this card is the removal of rewards categories. The previous Mileage Plus Visa Signature does double miles on Gas / Groceries / Dining / *A and Triple Miles and single EQM on united purchases. This one mimics the OnePass card that offered just double miles on continental.com

  13. @Rick

    I don’t really care about the “no previous card holders” clause… I won’t jump at this card for 30k miles anyway. The “bonus” 10k for pushing through large spend? No thanks. I’m at my limits with Chase these days, so it’s probably a good thing this card sucks. I do want to get the Hyatt card early next year, and I’d only pass on that one if chase has a blockbuster. (I want to get two nights at the PH in Paris.)

  14. Looks like they also realigned the CO Presidential Plus card. The literature now says 1000 EQMs for $5000 of spend with a limit of $25,000. Am I reading that right? If so, so long uber-spend on business…

  15. The award UDU benefit is huge, for me more valuable than most credit card sign-up bonuses I’ve seen. (My redemptions tend to be high-value ($650-$1,000) 25K mile awards). But it really sucks that as a non-U.S. resident, I can’t get the card and therefore have no way to access this benefit (other than spending tens of thousands of miles) even though I’m a 1K.

  16. With respect to upgrades on award flights, you say “United is going a step farther than anyone else in the US market.”… except that Continental already did this, earlier this year, with their co-branded credit cards (which is where this benefit would seem to come from), though they have since removed this from the fine print for new applications. See, for example, http://www.flyertalk.com/forum/continental-onepass-pre-merger/1091212-elite-upgrades-reward-tickets-chase-not-responsible-offer-fulfillment-11.html.

  17. Gary – Does the annual 10k bonus on $25k spend change your analysis of everyday spend on reward cards? In theory this is slightly better than the 1.25 miles per $1 on the Chase BA card (though without the 2-for-1 cert you’d get with $30k spend).

    Also, does this turn UA MP into a stealth 3-tier program like DL (or even 4 tier?) with the following levels: 1K saver awards, non-elite saver awards, non-elite standard awards and elite cardholder standard awards?

    Personally, from SFO I don’t see the UDU on awards as a big deal and here’s why: (1) The last 2 times I’ve needed a domestic award (both somewhat short notice transcons where the cash fares were prohibitive) UA/CO had no saver coach inventory so I ended up flying Mrs. B on a saver F award. Admittedly YMMV with advance planning, but that brings us to (2) UDU on popular hub routes like SFO-IAD/NYC is rarely available for 1P and 2P, and 1Ks are often shut out as well as is obvious from the many 1Ks boarding after F is called. So UDU on award tickets is what I would call an illusory benefit for lower level elites, with the exception of Hawaii (and Mexico) flights where availability is good – assuming you can get the saver coach award.

    Of course, YMMV depending on your status level, the routes you fly, and how far in advance you can book your saver awards.

  18. @Gary – “So by the beginning of next year, this benefit would seem to suggest that every Mileage Plus member likely to fly domestically on an award ticket ought to get the card.”

    Unless you provide more reasons, I disagree.

    I have to agree with Boraxo that low level elites wouldn’t get upgrades very often (and non-elites never would).

    While it is better than not allowing any upgrades, I think that airlines should value those who are loyal enough to earn an award seat more than, at least, those who purchased the cheapest ticket.

    And making this as a requirement to get full standard award availability just made United/Continental miles worth less.

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