United Explorer Card Dropping Some Benefits

I receive compensation for content and many links on this blog. You don’t have to use these links, but I am grateful to you if you do. American Express, Citibank, Chase, Capital One and other banks are advertising partners of this site. Any opinions expressed in this post are my own, and have not been reviewed, approved, or endorsed by my advertising partners. I do not write about all credit cards that are available -- instead focusing on miles, points, and cash back (and currencies that can be converted into the same).


Katie Genter says that effective June 1 the United card will drop price protection and return protection, and reducing trip cancellation coverage (trip delay coverage is not affected).

I’d make two observations.

  1. United President Scott Kirby is squeezing Chase for more revenue.

  2. United doesn’t appear to be growing its credit card portfolio any increase in MileagePlus revenue seems to be coming from points transfers from Chase Ultimate Rewards.

With Chase largely spending the interchange on consumers, and having to make money off the revolve, any more money to United out of each transaction (rather than more money from more customers driving more spend) has to come out of consumers’ pockets.

Still the United card is arguably the most benefits-rich airline co-brand credit card. Uniquely it offers annual club passes; a spend threshold bonus; extra saver award availability; last seat availability on extra mileage awards; and primary collision damage waiver.

Most customers aren’t using benefits like price protection. In fact that’s one reason card companies can offer so many bundled benefits — the cost is low because usage is low. A future where less revenue is available to fund benefits (e.g. if interchange rates fall) likely is one with fewer bundled benefits, and if they’re benefits that are used most that trend could accelerate further still.

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 »

More articles by Gary Leff »

Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of any advertiser to ensure that questions are answered, either. Terms and limitations apply to all offers.

Comments

  1. I could not help but respond to the issues/complaints in today’s Tribune feedback drafted by Mr. Gary Leff. Yet where is the priority here when it come to passengers being removed off of planes, pets dying in the overhead compartments and more. When they, the city of Chicago decided to adopt the single runway approach in Sept of 2005′. Yet again the impacted families within the ORD collar communities remain a target of the Ultra Fine Particles (UFP’s). In the 80’s the city of Park Ridge was classified as a high cancer rated area due to the overhead jet fuel emissions exposure 24/7. Again, let’s get out priorities together when Sen. Durbin dropped the flight cap in Oct 07…and the City of Chicago decided to over load our skies.

  2. Benefits will be reduced…customers will cancel or use other cards….and credit card revenue will go down even more. Fares are at an all time high (we go to PSP every year and for this years trip the economy fares are close to $600 which is the highest we’ve ever paid) and the airlines charge you for everything short of using the restroom. In the end the consumer looses out which anyone with half a brain knew was going to be the end result all the consolidation.

  3. Yup, I’m closing my 2 United Chase cards. One is a Visa and the other is a Mastercard from Continental days. I’ll have Chase transfer the credit available to one of other cards. If I have to extend my United miles life, easy transfer from UR. Easy, peasy, done….

  4. I think we all saw the use of Airline cards decreasing, due to the harder hoops to jump through to acquire them. More precisely, I mean the change to miles being earned on flights being revenue based. This was the core of my miles earned in years past, the credit card usage was a minority piece of mileage accounts. Now that more and more consumers see this, there simply better reward cards (one of my favorites is the Fidelity Visa with 2% back on ALL purchases, if no other card makes more sense for a transaction).

    Although, I have yet to cancel my United Visa, I’m more willing to give it up than I’ve ever been. I do enjoy the primary vehicle coverage for rental cars; this is one perk that isn’t too common these days.

    Basically, I find it humorous that United would have the slightest unfavorable feeling that Mileage Plus revenue from Chase would be declining. To me, that’s where they’ve lead us and shouldn’t be surprised. As a side note, I believe that’s why Amex has some Delta card offerings to entice card membership in a declining new member environment.

  5. Christian, when you say “… fares are at an all time high…”. I’m not so sure about that. I’d argue that it’s more likely the exact opposite.. As example, looking at the the Burrau of Transportation Statiscs for Chicago to Palm Springs tells me that inflation adjusted 2017 Q1 US average fare is $355… whereas the 1996 Q1 fare was north of $450…
    While this is just one market, I suspect the data on a national basis will yield similar results… flying really is quite cheap on an inflationary adjusted basis, and far from an “all time high”

    https://www.transtats.bts.gov/AIRFARES/

  6. @JohnB you can instead downgrade it to the MileagePlus no annual fee card (which you can’t apply for). This a) is healthier for your credit history by extending your account age, b) retains access to more award space if you are not a Premier, and c) gets you a 20% discount on nearly all iPad-orderable food in Newark Terminal C.

  7. I’d much rather have the 10% points rebate on the AAdvantage cards (either Citi or Aviator) than these “perks” with the United card. Maybe if United introduced additional first saver award availability as well, instead of just economy, it would be more enticing. I don’t travel as much as I used to anymore, but I take two round-trips from ORD -> LAS every year. I like to use my miles and fly first. On American, I can almost always find availability at the 25k first saver level (so 22.5k after the points rebate), which comes out to 45k round-trip after the rebate. On United, I can’t ever find first saver availability, which would mean 50k each way or 100k round-trip for that same route (before anyone says anything, I’m not stupid enough to do that!).

  8. @IvanX., Great point on the downgrade option to the unsolicited/unknown Mileage Plus. I second that, it is definitely something to do instead of cancelling to preserve things with a no annual. But…. with that said.. I wager that this no fee card disappears entirely within a year of this June 1 change.

    @Mike, agree on them doing something about availability but not holding my breath. Plus I wish I could effectively move to/fly with consistently a different airline, but given that I live within 30 mins of IAH, I am stuck and have to grudgingly continue to fly them. I so miss Continental

  9. I bet this is all from Chase. If you look at their books from last year they crazily overspent on marketing associated with new card signups from CSR. There has been a leadership change with who is in change for this division. It’s looks pretty clear that they are in the process of optimizing their portfolio to reduce costs and increase profitability. Just wait and see more changes will com to other chase cards. First IHG, now United, but what will be next…

  10. Hi Gary and all on this post, I have two questions. First, JohnB says it is easy to transfer United miles; but to which card? I have had the United Explorer for card for over 10 years, have acquired 260K+ miles, but see no option to transfer to any other card. I would love to transfer to the Chase Sapphire Preferred, but don’t see how this can be done. Also, will changing to the no annual fee Mileage Plus as Ivan X says keep my Signature card, and will I still get the primary car rental insurance? Between this and trying to find out what would be the best move to make with my AMEX SPG card, I am really at a loss as to what to do. Any help would be apppreciated.

  11. @Stephen P, JohnB wasn’t talking about transferring his United miles — rather, transferring his credit access limit (credit line) to another Chase card for the benefit of his credit report. This would always be good practice prior to closing a card, but is unnecessary if you are downgrading, since you are keeping the credit access limit by keeping the account open.

    As for your 250K+ miles, like me, you’re just gonna have to use them on United, or one of their partners booked as a United ticket. They stay at United. I suppose you could also use one of their usually poor redemption items like booking hotels, even though that won’t get you the best value for them.

    My strong guess is that the no-fee card doesn’t include Primary rental; you could call Chase, tell them you’re thinking about converting, and ask if that benefit exists. You could also SM and ask if there is a way to see all card benefits of the MileagePlus no-fee card. There aren’t many, though I still find value in 20% off dining at Newark, and, of course, expanded saver award availability.

Leave a Reply

Your email address will not be published. Required fields are marked *