Credit cards are big business for airlines. For example, American Express and Delta recently renewed their partnership through 2029, in a deal that Delta expects to benefit from annually to the tune of $7 billion by 2023 (compared to $3.4 billion in 2018).
So as you can see, for the most part airlines expect their profitability through these partnerships to increase, rather than decrease. While both American and Delta seem quite happy with their bank relationships, it would appear that United is less happy. What’s going on?
United isn’t happy about the Sapphire Reserve
The Wall Street Journal has an interesting story about how United executives allegedly want more from their partnership with Chase. They allegedly believe that the Sapphire Reserve is competing directly with the airline’s credit cards.
Their current agreement is valid for another six years, and United President Scott Kirby has said publicly that the airline wants to get more money out of their partnership with Chase.
Officially the companies issued the following statement regarding this:
“This is a solid, longstanding relationship, and we’re working together to find new ways to grow our partnership for years to come.”
Is United onto something?
I do think United is onto something here, though I’m not really sure this should be Chase’s problems. It seems to me like the problem is a combination of two things — Chase has really good bank cards, while United’s co-branded cards could offer more value.
In general I recommend getting airline credit cards for the benefits, while there are only limited circumstances under which it makes sense to actually put spending on them.
The Sapphire Reserve has so much going for it:
- The card is easy to use and offers 3x points on dining and travel
- Points can be redeemed directly towards the cost of a travel purchase at the rate of 1.5 cents per point
- Points can also be transferred directly to United MileagePlus, as well as several other airline partners
When it comes to these credit card partnerships, airlines typically benefit in a few ways:
- They see increased loyalty from those who have their co-brand credit cards
- They get a cut on the merchant fees for purchases made on their co-brand cards
- They get paid for the value of the miles they’re issuing
When it comes to the Sapphire Reserve, presumably United is still making money off of people transferring points from Ultimate Rewards to MileagePlus, though that’s probably not nearly as much as they made when people were just outright using their United cards.
How does this compare to American and Delta?
In general the trend of bank cards replacing airline cards in peoples’ wallets is logical enough. As I’ve explained before, generally you shouldn’t be spending money on airline credit cards:
- Airline credit cards can be worth having for the benefits they offer, like free checked bags, priority boarding, etc.
- In general you’re going to get much better value earning points with a bank card than with an airline card, given that bank cards often have much more generous bonus categories
You might be saying “well why is United the most frustrated airline here, and why don’t American and Delta have the same problems?” There’s probably a reason for this:
- American AAdvantage:
- Has partnerships with both Barclays and Citi, so they have more co-brand opportunities since they have two banks competing with one another
- Isn’t transfer partners with Citi ThankYou; we know Citi tried to get them to sign on as one, but they allegedly couldn’t agree on price, and I guess they anticipated this issue
- Delta SkyMiles:
- Is transfer partners with Amex Membership Rewards, but Amex doesn’t have a single “super card” in the same way that Chase does
- Actually has a unique value proposition for their credit cards when it comes to spending, since you can earn status exclusively through credit card spending
What could United do differently?
The contract between Chase and United allegedly runs for several more years, so I guess there are some potentially interesting implications:
- United allegedly wants more from Chase for the miles they sell to them, though it seems like there’s no agreement there; maybe this is why we’re seeing United move to dynamic award pricing, since if they can’t increase the amount they’re paid, they can at least decrease how much redemptions are costing them
- United could try to withdraw from Chase Ultimate Rewards eventually, though it sounds like that can’t be done with their current contract, and it also seems like that would cause a huge rift
- United could actually try to make it compelling for members to spend more on their credit cards
I sure feel like airlines aren’t very creative on that last point, and that’s an area with a lot of potential. With redeemable miles being easier to earn through bank cards, it sure seems to like other airlines should follow Delta’s lead by making it easier to earn elite status (or elite benefits) through their own co-branded credit cards. That would give members an incentive to actually spend on cards.
Bottom line
It will be interesting to see how partnerships between airlines and banks evolve in general. Nowadays bank cards are almost across the board more lucrative than airline cards, as they give consumers more valuable and flexibility.
Airline credit cards can be worth having for the benefits, but the upside for airlines is limited if that’s the reason consumers pick up those cards. They want people to actually spend money on airline cards, and for that to happen there needs to be more value.
What do you make of this situation?
Anyone have some advice here about the united presidential plus card (chase) I've been carrying since Continental. I have close to a million miles. Main reason for keeping the card: united club membership. It appears that in Nov. 2019 the rules were changed and despite paying $400 for the card, u only have access to the united club if you are flying united. There was no notification on this change. (Some people have the card...
Anyone have some advice here about the united presidential plus card (chase) I've been carrying since Continental. I have close to a million miles. Main reason for keeping the card: united club membership. It appears that in Nov. 2019 the rules were changed and despite paying $400 for the card, u only have access to the united club if you are flying united. There was no notification on this change. (Some people have the card but aren't on a united flight) For those flying united that must work, but there are times when people aren't flying united but want club access anyway as they wait for their flights. This was always possible. When they changed this in 2019 (nov) there was no notice, and the usual November promotion did not have this new info. Then came the pandemic and even if someone flew, the united clubs were closed. Just this past weekend I was in Texas, non stop/ Alaska. United did not have this itinerary. I walked into the United Club and was told the new, no united boarding pass, no entry. They were rude and disgusting. Talking to Chase yesterday was useless. They took no responsibility for offering a perk that should have been clarified. Advice what to do? BBB? Consumer Affairs. Cancel the card and risk losing the million miles?
I may be United's worst nightmare - I dropped my $450 Presidential Plus (I had the card since Continental days) for a $450 Sapphire Reserve. The United card just didn't even come close to the value I get from the Reserve Card for the same annual fee. I did get an Explorer Card for the free bag and group 2 boarding - but I only use that card for United purchases.
As many have noted, UA has only itself to blame with regard to consumers dumping their product and using something else. It is simply no longer competitive, which I why I've dumped my UA Club Card - why keep it when UA devalues its worth, both in terms of dynamic awards and a declining club experience?
I'm afraid you're right. I don't know what is possessing them to treat long-time loyal patrons this way, but I have noticed that since Continental ate them, the service as gone into the toilet (although they seem proud to use the purchased United brand).
Right now United miles are just a hair more valuable than Delta's Skypesos (which can be redeemed for about a penny a point). I'll keep using their card for the time...
I'm afraid you're right. I don't know what is possessing them to treat long-time loyal patrons this way, but I have noticed that since Continental ate them, the service as gone into the toilet (although they seem proud to use the purchased United brand).
Right now United miles are just a hair more valuable than Delta's Skypesos (which can be redeemed for about a penny a point). I'll keep using their card for the time being, but only for United purchases, restaurants, and hotels. One more devaluation, though, and it goes into the shredder.
I have decided that airline cards are not worth using at all. The problems United is facing are self inflicted. They devalue points and offer a very mediocre credit card. The repeated devaluations destroy any trust in the integrity of the program. Someday I hope United realizes loyalty is not a one way street. Same with the other airlines - except Alaska Airlines. Alaska still gets it right.
I fly 2/3 times a month on mainly UA so I find value in the UCC. I've been upgraded on award tickets, appreciate the respite of the lounges, expanded award access and Hertz PC, haven't suffered during the dynamic movement, appreciate the additional cash back on the portal and MPX app, and generally appreciate it as a noncategory spend card. That said, I wouldn't mind seeing some of the Explorer discounts with food/bev purchases and...
I fly 2/3 times a month on mainly UA so I find value in the UCC. I've been upgraded on award tickets, appreciate the respite of the lounges, expanded award access and Hertz PC, haven't suffered during the dynamic movement, appreciate the additional cash back on the portal and MPX app, and generally appreciate it as a noncategory spend card. That said, I wouldn't mind seeing some of the Explorer discounts with food/bev purchases and wifi on flights. I'm on board to get the PDQ waiver...the bane of my existence to date due to discounted flights.
I recently got a general survey from UA with one part asking which cards I use, with CSR as an option. You can tell they are interested to learn more.
For me, it’s simple. A few years back I could pretty reliably get a UA saver award when I wanted it. Now I rarely find saver award availability with good routing when I want it, so miles are worth far less to me. That coupled...
I recently got a general survey from UA with one part asking which cards I use, with CSR as an option. You can tell they are interested to learn more.
For me, it’s simple. A few years back I could pretty reliably get a UA saver award when I wanted it. Now I rarely find saver award availability with good routing when I want it, so miles are worth far less to me. That coupled with the fact that CSR earns 3 points/dollar (or 3 UA miles/dollar) on dining and travel, why would I spend on UA Club Card for only 1.5x? If I can’t find a saver award, just redeem Chase points for 1.5 cents. Easy.
I still have the UA Club Card just for UA Club access. But with the club overcrowding and new restriction to only use when flying UA, I plan to downgrade it to the Explorer Card when it is up for renewal.
UA did this to themselves. I used to spend every dollar on my Club Card back when I could almost always redeem for saver awards. Now all my dining and travel spend goes to CSR, and everything else goes on Citi Double Cash for 2% cash back.
The miles game just isn’t worth it anymore.
I dumped my United card. I'm a Million Miler with gold for life so the free bags and boarding etc mean nothing. I hate Chase from previous run ins so the $495 to use the United Club a few times a year wasn't worth it. I use Hilton Honors Aspire Amex. It gives me Diamond status, airport club access when I do have the need and plenty of points and ways to use them, including converting to airline miles if I'm desperate.
I wish UA had executed the recent mileage program changes better for the co-branded cardholders. Earlier this year, I upgraded my explorer card which I had it since 2010 to UA club card based on the fact that the club card holders were excluded from close-in booking fee of $75 (I have no status with UA). Since then UA eliminated close-in booking fee for everyone, so there were no points for paying extra $350 for...
I wish UA had executed the recent mileage program changes better for the co-branded cardholders. Earlier this year, I upgraded my explorer card which I had it since 2010 to UA club card based on the fact that the club card holders were excluded from close-in booking fee of $75 (I have no status with UA). Since then UA eliminated close-in booking fee for everyone, so there were no points for paying extra $350 for UA co-branded card for me at this point. Additionally, since I upgraded my explorer card to club card, I cannot receive the discount for inflight wifi etc. I feel that UA should extend the same benefit of explorer card plus additional benefits for upgraded co-branded cardholders. Another one is minor but, UA would soon limit United Club access to the boarding pass holders of UA or partner airlines only. It is personally bummer for me, because at certain airport, I prefer United Club over Priority Pass lounges (like NRT, with both ANA and UA lounges). I will most likely cancel my club card or switch it back to explorer card if possible for next year. If UA co-branded cards offer some credit towards PQD or x4 to x5 miles per dollar for purchase of UA tickets etc, I will consider to use the co-branded card over my CSR card.
I’ve been part of a consumer survey group for more than a year with an airline-related CC as the focus. They’ve floated a few ideas here and there but nothing as compelling as the CSR, which I have. I also hold a card that offers airline club membership as a benefit but aside from slightly cleaner bathrooms, I’m jammed into a ridiculously crowded place that offers cheese cubes and celery sticks, so not sure how I come out ahead.
Justin said, "I actually received a survey today from United related to a potential new CC. Nothing too innovative on the sample used through the survey ($450/year, UA Club Access, $2 UA spend, $1.5 all other, priority boarding/bags/etc), but their questions towards the end were interesting. "
Sounds exactly like the United Club VISA card from Chase. I got a free year use of the card and I've put some bucks on it, but when...
Justin said, "I actually received a survey today from United related to a potential new CC. Nothing too innovative on the sample used through the survey ($450/year, UA Club Access, $2 UA spend, $1.5 all other, priority boarding/bags/etc), but their questions towards the end were interesting. "
Sounds exactly like the United Club VISA card from Chase. I got a free year use of the card and I've put some bucks on it, but when the freebie runs out I'll cancel (no way worth $450 a year to me). I'm lifetime Gold with United, so already have priority boarding and free bags, and bought Lifetime Red Carpet Club membership for about $250 decades ago (best investment I've made, actually), so the Card's access benefit simply duplicates what I already have.
If that's the best they can do, it's nowhere near enough.
The answer for United is simple:
1) Allow United-brand CC spend to waive PQD requirement for 1K status.
2) Bring back the United Select card. 3 miles/$ on United, 2 miles/$ on gas grocery and home improvement stores (grocery and home improvement are not common bank card categories), and 5,000 PQM on United.com spend.
This is really about United being mad that they can’t hold people captive to their program. Every year United has had devaluations or program changes that undermine the value and trust in the Mileage Plus program. Examples in the last two years changes to EQM on premium tickets and now most recently dynamic pricing which reduces the predictability, flexibility and planability of United miles. It’s a bit like a coffee shop wanting to charge their...
This is really about United being mad that they can’t hold people captive to their program. Every year United has had devaluations or program changes that undermine the value and trust in the Mileage Plus program. Examples in the last two years changes to EQM on premium tickets and now most recently dynamic pricing which reduces the predictability, flexibility and planability of United miles. It’s a bit like a coffee shop wanting to charge their customers a unpredictability higher price for coffee based on when the shop might be more busy and being surprised that nobody wants to come in anymore...
Especially with dynamic pricing I would never get a United credit card. Currently a United 1K but am steadily reducing my flights with United as they have created multiple reasons to fly other airlines. Love my Chase CSR and Citi Premier card and eventually will get a Amex as your a sucker to trust any airline with their belief that we have to fly them and there are so many airlines I’m crediting miles to these days. That’s where the non-airline cards are so great for topping of mileage accounts.
I get more than enough UA miles by flying. I have been using the World of Hyatt card (also Chase) more to get the nights I need to maintain Globalist and otherwise will use the Chase Sapphire, as I find I need the points more for my favourite Hyatt escape, which is 25k per night, than for flying. As I live in Japan, lounge access isn't that attractive as a 1K (get everywhere except in...
I get more than enough UA miles by flying. I have been using the World of Hyatt card (also Chase) more to get the nights I need to maintain Globalist and otherwise will use the Chase Sapphire, as I find I need the points more for my favourite Hyatt escape, which is 25k per night, than for flying. As I live in Japan, lounge access isn't that attractive as a 1K (get everywhere except in the US), so more miles per $ spent or global upgrade awards would be the key attractions.
Having read the WSJ article, thanks to one of your commenters who posted it yesterday, it was clear that UA is unhappy that spending has noticibly dropped on its Chase branded cards. Well duh, and whose fault is that? Seems that they are upset that Chase, their "partner" is offering more valuable awards to fly airlines (others and their own) then they do. This is UA's problem to fix and they don't have to look...
Having read the WSJ article, thanks to one of your commenters who posted it yesterday, it was clear that UA is unhappy that spending has noticibly dropped on its Chase branded cards. Well duh, and whose fault is that? Seems that they are upset that Chase, their "partner" is offering more valuable awards to fly airlines (others and their own) then they do. This is UA's problem to fix and they don't have to look outside the chase eco-system to see how to fix it. Look at what Hyatt did last year to go from a sock-drawer card to one where people would actually put spend on it. 4 Points for spend at their property. Couldn't UA do the same with their flights to one up CSR? WIth Hyatt's Chase Card, 15k spend gets you a cat 1-4 award night free. Couldn't chase offer a flight certificate for a certain spend threshold? WIth Hyatt's card, for every 5k spend, you are awarded 'nights' towards the next status. Couldn't UA do something similar for elites. 2x points on fitness, dining, transport; couldn't UA work with chase to add some 2x categories?
And what do UA's execs expect Chase to do, be even less competetive from a points earning perspective than their main competitors (Amex Gold 4 points grocery and dining, Citi Prestige 5X dining and flights)? Sorry UA, stop whining and either move forward by ensuring your loyatly program is a compelling option for customers and make your co-branded card a compelling option again by offering something worthwhile. Or don't whine, do nothing of substance, plead with Chase (and the media-- how did this even leak to WSJ) and continue to fall further and further behind...
I was going to get a Chase United card but when they announced the switch to dynamic award pricing I was glad I didn't get it and have no plans to get one now. I'm fairly new to this game and seeing the insane costs and sparse actual award availability of Delta flights doesn't make me want either co-branded card. The transferrable currency cards get my spend.
Because United is a Chump airline. It’s not more complicated than that!
I worked in the industry, but don’t have specific knowledge of the Chase/United deal. Typically on the cobrand card, the issuer is paying a premium per mile, let’s assume $0.0175 per mile, because the airline is bringing their customers to the issuer. On the bank cards, the bank will pay the airline less, let’s assume $0.0125 per mile, because the argument is that it is the bank that is bringing the airline its customers (and...
I worked in the industry, but don’t have specific knowledge of the Chase/United deal. Typically on the cobrand card, the issuer is paying a premium per mile, let’s assume $0.0175 per mile, because the airline is bringing their customers to the issuer. On the bank cards, the bank will pay the airline less, let’s assume $0.0125 per mile, because the argument is that it is the bank that is bringing the airline its customers (and therefore broadening its revenue potential from its mileage program).
I have 3 United Chase cards, and my wife had two. (2 Club cards, 2 Mileage Plus, and 1 Business Mileage Plus).
United is losing customers like me because they devalued their program. I put about $150k annually on my United Club Card; but I'm seriously considering changing to Sapphire Reserve. The 1.5 miles per dollar was valuable - the card was my primary card because I could literally earn 3 one way business clad...
I have 3 United Chase cards, and my wife had two. (2 Club cards, 2 Mileage Plus, and 1 Business Mileage Plus).
United is losing customers like me because they devalued their program. I put about $150k annually on my United Club Card; but I'm seriously considering changing to Sapphire Reserve. The 1.5 miles per dollar was valuable - the card was my primary card because I could literally earn 3 one way business clad tickets to Europe annually. But with the devaluation and what I suspect will be very expensive redemptions for business class, it's no longer worth it.
I'd rather have the flexibility of Ultimate Rewards. I already have begin to use my Ink Preferred more than my United cards.
Rather than acting like a victim, United should never have screwed with their program. Terrible service; average business class internationally; less than average business class domestically. The only thing they had going for them was the mileage program, and Kirby screwed it up.
Curious if the vast majority of credit card holders care about status? The commenters are a small percentage of card users, and less likely to carry debt, which is what the banks want. I suspect the more significant credit card purchasers don't care about status but care about multipliers and free tickets based on over-tourism in Europe. In my opinion, the airline cards need to stop focusing on getting the high fliers but broaden their...
Curious if the vast majority of credit card holders care about status? The commenters are a small percentage of card users, and less likely to carry debt, which is what the banks want. I suspect the more significant credit card purchasers don't care about status but care about multipliers and free tickets based on over-tourism in Europe. In my opinion, the airline cards need to stop focusing on getting the high fliers but broaden their base. The status people are likely using the card anyway.
The airline cards don't have multipliers except some do for restaurants. The Chase cards do and have more flexibility. Why would anyone pay a fee for an airline card when you can transfer to that same airline and be able to adjust where you move depending on program changes?
The airlines are all moving to dynamic pricing, which further weakens their cards and confirms to consumers to stick to generic cards.
United needs to come up with creative options that no other program has. I think credit cards should offer a menu of options so people can tailor the card to meet their needs. United wants loyal users, and loyal users are people who "have it your way."
I am lifetime Plat on UA. the united card offers benefits that I already have (e.g. free checked bags, priority boarding). If they offered alternate benefits to people with status, I might consider the card.
Makes sense. Since I started reading this blog and have CSR I only use my mileage plus card for United WiFi. Previously I spent a LOT on the card. I’m keeping it now only for the United club membership which I do use frequently. In years past I also needed it for the PQD waiver but it’s irrelevant when trying to keep 1k.
I had written in this space after Chase introduced the CSR that it made all UA cards obsolete. I am surprised it took UA so long to recognize a 'problem' that was evident the day the CSR launched!
I have both the United explorer and CSR, and only keep and use the United card for flights where I need to check a bag. The way baggage fees have gone, it is worth it just for that, but not competitive for any other purchase vs. CSR rewards and points versatility.
The secondary reasons to keep the Explorer card aren't bad, but again not competitive to CSR. I like the extra award availability and...
I have both the United explorer and CSR, and only keep and use the United card for flights where I need to check a bag. The way baggage fees have gone, it is worth it just for that, but not competitive for any other purchase vs. CSR rewards and points versatility.
The secondary reasons to keep the Explorer card aren't bad, but again not competitive to CSR. I like the extra award availability and have benefited from that. The bonus points using the MileagePlusX app for egift cards add up. As a frequentish United flyer with varying status, I like guaranteed boarding group 2 to get overhead storage when not checking a bag
Explorer also serves as my backup no foreign transaction fee card, and due to the $75 authorized user fee on CSR, Explorer covers my wife's Global Entry fee every 5 years.
Again, not enough to use as a credit card other than to skip baggage fees, but I'll stick with the $95 fee for the secondary benefits.
"What could United do differently?"
It could be a better airline, for starters
I travel a couple of times a year, and really only want to earn miles for premium travel. The United card limits me to United flights, which are often unavailable. CSR gives me options, which I used this year to get Air France Business class tickets s when there was nothing available from United.
Maybe United should focus on building an airline that I want to fly, rather than one that I avoid. Why build up points with an airline that treats me like livestock?
As a non-elite with UA, I'm offput by the requirement to purchase the flight using the UA card in order to get a free bag. CSP/CSR are much better in terms of travel benefits/points.
Yeah, I guess I just want both. But I can get that with AA or DL by merely holding the card in a sock drawer.
Exactly as above. I have Platinum Elite Status On United and it is qualitatively better than Gold- more/better amenities and service, better access to award seats, including Super Saver Business Class, frequent free upgrades or use of certificates to upgrade etc. so I spend 25k on the card, suck up the spend with only 1:1 point earned per dollar, Always spend when it’s a United purchase, and when I reach 25k, it goes in a...
Exactly as above. I have Platinum Elite Status On United and it is qualitatively better than Gold- more/better amenities and service, better access to award seats, including Super Saver Business Class, frequent free upgrades or use of certificates to upgrade etc. so I spend 25k on the card, suck up the spend with only 1:1 point earned per dollar, Always spend when it’s a United purchase, and when I reach 25k, it goes in a drawer. Then I only have one other target to meet to keep my Platinum.
I sold my soul long ago and every year I tell myself I’m gonna go for another airline Lolol.
I recently went with CSR and didn’t even think about an airline card. I travel a fair amount but nothing crazy.
As someone stated, I, as a very moderate travel have no incentive to throw my eggs all to one airline. With CSR I have a lucrative airline reward program without being married to one (I recognize they won’t address the latter part) but the point is I am not stuck with not enough...
I recently went with CSR and didn’t even think about an airline card. I travel a fair amount but nothing crazy.
As someone stated, I, as a very moderate travel have no incentive to throw my eggs all to one airline. With CSR I have a lucrative airline reward program without being married to one (I recognize they won’t address the latter part) but the point is I am not stuck with not enough miles for travel and have an option for cash back or some other reward.
Secondly, I gain points quickly! I use it for almost all purchases. Insurance converge for rentals, good points accrual options. In a few mos I have enough points for an international ticket between my spending and bonus rewards.
They at least kiss me before they **** me!
People want value on their terms. Thankfully bank cards understand this.
While the UA Explorer card offers a PQD waiver, I don't understand why UA doesn't allow you to increase your status with spending, for example if for every $25k you spend you get bumped up on status level, so those with no status get Silver, Silvers get Gold, etc.
I can't imagine that the incremental cost of this would be much and I would certainly put all of my spending on the UA card if I could earn status.
The only reason I use my UA Explorer card is to reach the @25k spending per year to remove the PQD requirement from achieving status. I can make the PQM requirements easily, but since I fly on many star alliance members and book cheap tickets I never make the PQD requirements.
Pure greed. Airlines are using the 737-MAX debacle as forward looking for a "poor" profit year. "Poor" at $28Bn for the year, even though it's going to be the 10th most profitable year for them. With AA refusing to put proper F class seats, much less J seats (not!) and UA's massive devaluation on the scale of the Venezuelan Bolivar, airlines are strictly gearing towards the full price Business traveller ("Full Boat" in New car...
Pure greed. Airlines are using the 737-MAX debacle as forward looking for a "poor" profit year. "Poor" at $28Bn for the year, even though it's going to be the 10th most profitable year for them. With AA refusing to put proper F class seats, much less J seats (not!) and UA's massive devaluation on the scale of the Venezuelan Bolivar, airlines are strictly gearing towards the full price Business traveller ("Full Boat" in New car sales parlance). That leaves us vacation travelers feeling like (unwanted) Used Cars.
BTW: "Used Cars", a 1980 movie with Kurt Russel is a great comedy farce, and AFAIK shows exactly how the airline industry is currently being run.
People have shifted their spending to bank cards like the Sapphire Reserve because they have little trust in airlines after all the recent devaluations. Why invest in a particular currency when you have no clue what they will be worth tomorrow? Many consumers also seem to prefer the ability to redeem points for a fixed rate or straight cash back-- it's a lot easier to figure out even if it's a worse value.
As for...
People have shifted their spending to bank cards like the Sapphire Reserve because they have little trust in airlines after all the recent devaluations. Why invest in a particular currency when you have no clue what they will be worth tomorrow? Many consumers also seem to prefer the ability to redeem points for a fixed rate or straight cash back-- it's a lot easier to figure out even if it's a worse value.
As for United, I'm fairly sure they're raising the price of United Club memberships to $650 solely to push people to sign up for the $450 United Club card. I wouldn't be surprised to see them add PQD for spending. Beyond this, I think the airlines have put themselves in a trap relative to the banks.
I don't see what airlines can offer to keep people away from cards like the CSR or American Express Gold, which are easy to use and offer the best value with the most flexibility.
It's funny reading all the comments. Everyone agrees United IS the problem, they suck at their benefits. I see no reason to get their card; you only get to use their lounge like 2x a yr, their point system sucks cause they're greedy and premium award seats are becoming increasingly scarce. For me to get a UA card they would need to up their game big time and do a companion ticket like Delta, do...
It's funny reading all the comments. Everyone agrees United IS the problem, they suck at their benefits. I see no reason to get their card; you only get to use their lounge like 2x a yr, their point system sucks cause they're greedy and premium award seats are becoming increasingly scarce. For me to get a UA card they would need to up their game big time and do a companion ticket like Delta, do unlimited lounge access like Chase and greatly improve to match or beat Chase's insurance insurance and other perks. In other words, United is too stingy!
There's no reason to use a United credit card except to hit the necessary spend to get your promotional miles. You redeem your miles, use the United cc to cover the fees so that you get the free checked-in luggage perk then cancel the card after you're done. After that, there's no use of using it for your daily spending. That's when you switch back to your CSR.
The United cards only offer free checked bags on flights booked through United with the card. If it were tied to my MileagePlus account instead (like Delta does) I'd sign up. Then I could book through the Chase portal, but still get free bags.
We should take the perspective put forward here with a grain of salt because of the blog's business model. The CSR and maybe even the CSP as they are today are money losers for Chase.
It's going to be really interesting to read the comments of the article that discusses the inevitable devaluation of the Sapphire cards. Will there be shock? Surprise? Ranting galore?
What LAXJeff said - make UR-to-UA transfers less than 1:1 by raising the price of mile sales to Chase - makes sense. To do that, though, you have to also keep people from transferring to SQ, meaning raise SQ's cost of award flights on UA. The savvy UA flyer not seeking status is already using SQ miles, as they can earn maximum SQ/$ by divvying up their spending based on "highest-X" alone (regardless of issuer)...
What LAXJeff said - make UR-to-UA transfers less than 1:1 by raising the price of mile sales to Chase - makes sense. To do that, though, you have to also keep people from transferring to SQ, meaning raise SQ's cost of award flights on UA. The savvy UA flyer not seeking status is already using SQ miles, as they can earn maximum SQ/$ by divvying up their spending based on "highest-X" alone (regardless of issuer) AND taking advantage of sweet spots. Lax routing rules further sweeten the deal.
My wife and I used to accumulate United miles religiously, using our United Explorer cards, among other things. That is all a thing of the past. We now strife to collect Chase Ultimate Reward points, using our Sapphire Reserve and Freedom Unlimited. We still have ca. 500,000 MileagePlus miles, which we have found not particularly valuable, as miles are no longer worth much and (premium) award seats are becoming increasingly scarce.
No, none of this is Chase's doing.
I like flexibility. After many years of chasing status and holding cards with (at different times) all three legacy carriers, I am not interested in that anymore. I just want to use miles to go where I want to go. Just this week, I helped a relative book a trip and we had SO MUCH flexibility because he had both MR and UR points. If he’d come to me with just UA miles, it would’ve...
I like flexibility. After many years of chasing status and holding cards with (at different times) all three legacy carriers, I am not interested in that anymore. I just want to use miles to go where I want to go. Just this week, I helped a relative book a trip and we had SO MUCH flexibility because he had both MR and UR points. If he’d come to me with just UA miles, it would’ve been so much harder. So honestly, it would require something really compelling to get me to sign up for another airline co-branded card.
It's a bad time to be thinking about an airline card, with United and AA both randomly devaluing points redemptions. I'll probably keep using UR points on Star Alliance through United, but I'm glad there are other options for my points.
You say Citi and Barclays are competing for AA customers, and the competition is a good thing. All I see is both dumping the main reason for keeping the card - the 10% point...
It's a bad time to be thinking about an airline card, with United and AA both randomly devaluing points redemptions. I'll probably keep using UR points on Star Alliance through United, but I'm glad there are other options for my points.
You say Citi and Barclays are competing for AA customers, and the competition is a good thing. All I see is both dumping the main reason for keeping the card - the 10% point refund. Seems more on a par with price fixing than competition.
@MattR - good point: 5/24 is part of the equation too.
IIRC there was some buzz from Hyatt last year that 5/24 disqualified people who Hyatt would have liked to signup as customers.
Connect a few dots, and you wonder if 5/24 might be an impediment to Chase renewing some of their partnerships.
There has not been a less compelling financial product since the Kardashian Kard. No sane, rational person would put spend on a United card vs a CSR.
Chase just sent this email for my UA Explorer 27-JUN:
"Pick up your Card. Pump up your miles. Fill up your mileage balance faster. Earn 4 bonus miles per $1 spent on up to $2,000 in gas station purchases with your UnitedSM Explorer Card or United MileagePlus® Awards Card between July 1 and September 30, 2019."
Seems Chase sent out offers for some of their personal cards for a summer campaign. More of this please, Chase.
Chase has...
Chase just sent this email for my UA Explorer 27-JUN:
"Pick up your Card. Pump up your miles. Fill up your mileage balance faster. Earn 4 bonus miles per $1 spent on up to $2,000 in gas station purchases with your UnitedSM Explorer Card or United MileagePlus® Awards Card between July 1 and September 30, 2019."
Seems Chase sent out offers for some of their personal cards for a summer campaign. More of this please, Chase.
Chase has also left the signup bonus for CSR at 50K while upping the bonus for CSP to 60K. CSR is also much harder to be approved for, even for those with 800+ scores AND under 5/24.
Perhaps Chase has heard United & doesn't want to lose their US legacy carrier? Another great article Ben
~Cap
I have an old (Mileage Plus Select - no longer available) United card - and the only reason I use/keep it is is that I get 3x on United (same as my Chase Reserve), but I get 5,000 bonus miles (not a big deal), but that it also earns up to 5,000 PQM on united spending. I tend to book a lot of flights for other people/colleagues - so I use that on their flights...
I have an old (Mileage Plus Select - no longer available) United card - and the only reason I use/keep it is is that I get 3x on United (same as my Chase Reserve), but I get 5,000 bonus miles (not a big deal), but that it also earns up to 5,000 PQM on united spending. I tend to book a lot of flights for other people/colleagues - so I use that on their flights to earn those bonus PQM, but for personal flights I use the Reserve since that also provides me with trip insurance, reimbursement for delays etc.
Up. The. Points.
2x on United, 1x elsewhere is garbage. Zero reason to use aside from free bag + avoiding basic economy restrictions.
Not sure why there is not more of an uproar on the November AA and UA change. The club access benefit goes away if you are not flying directly on the respective airline. Example for me. Cannot not use the AA or UA clubs in Orlando when flying out on Spirit here in Orlando. The three airlines are located in the same airside. Just my thoughts on moving forward on this card devaluation.
There are a bunch of issues here, and they're all on United.
1) CSR travel insurance/benefits are better than anything else United has on their cards. And honestly that's one reason why I think CSR is going to get some of Citi's card revenue
2) CSR earns more points EVEN ON UNITED FLIGHTS. Not to mention on any other flight/hotel/etc.
3) United cards don't provide a method towards earning status. This is...
There are a bunch of issues here, and they're all on United.
1) CSR travel insurance/benefits are better than anything else United has on their cards. And honestly that's one reason why I think CSR is going to get some of Citi's card revenue
2) CSR earns more points EVEN ON UNITED FLIGHTS. Not to mention on any other flight/hotel/etc.
3) United cards don't provide a method towards earning status. This is one huge differentiator that the CSR is never going to be able to do. Delta does this well.
4) UA miles are frequently difficult to use for good value. Chase UR points are worth a minimum of 1.5 cents for flights, on practically any paid flight. United needs some way to increase the value proposition of UA miles, especially since everyone is pretty sure they are going to devalue shortly anyway. I don't want to lock myself into UA points where I have no control over how much they're worth or where I get to use it.
I will give props to UA for one thing. WIth a UA card, it gives you access to XN award space which is very helpful domestically. So I still keep a UA card, but I put literally $0 spend on it.
So my recommendation for UA would be the following:
1) Work with Chase and add the top tier insurance/protections to the Club card.
2) Either drastically improve the earning rates on the UA cards, or add a floor on the value of the points if you own the card. For example, if you own a UA card, you can book a paid flight with points at a value of 1.5 cpp. They'll never do that because they count on the breakage of people using points for toasters and magazines.
Look @ Hyatt - CSR used to earn more points than the old Hyatt card, so I never used it. Now that I earn 4 points/$ on the WoH card, I now use the WoH card at Hyatts.
In summary though - United wants top tier payments and reimbursements from Chase, when Chase managed to put together a fantastic package together with the CSR that shows just how little the UA cards are really worth. UA needs to step up their game if they want to be competitive.
By launching the successful Sapphire Reserve card, Chase has superseded and largely supplanted the market for individual airline credit cards, that United is now unhappy about. Chase has expanded their CSR/UR program coverage in the airline/travel realm, not unlike how Amazon has expanded their online retail system to impact numerous other markets (such as freight logistics and groceries).
If Chase wants to take things a step further, they could take an ownership or other financial...
By launching the successful Sapphire Reserve card, Chase has superseded and largely supplanted the market for individual airline credit cards, that United is now unhappy about. Chase has expanded their CSR/UR program coverage in the airline/travel realm, not unlike how Amazon has expanded their online retail system to impact numerous other markets (such as freight logistics and groceries).
If Chase wants to take things a step further, they could take an ownership or other financial interest in a new or existing airline and preferentially boost the rewards received when Sapphire cardholders earn/fly on (or transfer UR points to) that carrier.
In addition to the great points that Lucky raised, AXP also gives DAL lounge access as a part of the former's flagship card product, the Platinum Card. AXP's deal with DAL is more lucrative to the latter, because they give more value up to AXP than UAL gives to JPM.
Pretty simple: Go back to the perks of the Continental Presidential Plus card. I still have it and am grandfathered into its rules with PQM earning and PQD waivers. It's a blessing I never cancelled that card.
As a 1k, the United Club Card really has not a lot to offer.
The only benefits that status doesn't offer:
- Upgrades on Award Tickets hardly happen anyway as most of the times I book International Business or travel with a +1 where I don't want to get upgraded just by myself
- Upgrade tie breaker
- Lounge Access
I would appreciate
- PQMs and Companion Ticket (see Delta Cards)
and/or
- Lounge Access for Authorized Users (see American Cards)
United racing to the bottom and complaining when others won't join them... classic.
This seems like it's likely a 5/24 issue rather than a CSR issue. And of course, a United cards offer nothing of significant value issue. As a Denver-based traveler, if they add a chance to earn qualifying miles I would be in.
I agree United should try to improve the value proposition on their credit cards. It is the only airline that does not provide any elite "qualifying" miles on credit card spend. Also it is the only airline that does give any elite qualifying dollars on partner airline ticket purchase so they are certainly lagging behind Delta and AA on this.
Credit card points (such as UR) were quite a disruptive innovation. I used to put all my spend on a UA card. The idea of doing that now is laughable to almost anyone who spends 2 minutes comparing the various options.
How can UA bring back credit card customers? We forget around here that most people love cards like the Sapphire Reserve and Freedom Unlimited because they are lucrative as *cash-back* cards. But, as far...
Credit card points (such as UR) were quite a disruptive innovation. I used to put all my spend on a UA card. The idea of doing that now is laughable to almost anyone who spends 2 minutes comparing the various options.
How can UA bring back credit card customers? We forget around here that most people love cards like the Sapphire Reserve and Freedom Unlimited because they are lucrative as *cash-back* cards. But, as far as I know, you can't convert UA miles to dollars. If they allowed people to do that at 1 cent per mile, AND increased the miles earned on at least some spend categories (dining, etc), I think many people would view that as an interesting option. They'd get to choose whether they want to pursue a UA award or take the cash back.
This is important because the average Joe views airline miles with a lot of suspicion, and doesn't want to be stuck with a pile of useless miles that are insufficient for an award. With UR, you can always cash in for $$. With UA miles, you can't.
I do not fly UA but I am AA EXP for the last 9 years. About two years ago I ditched all my AA-branded cards because I would rather charge AA travel to Chase Sapphire. As lifetime PLT with AA, I do not need free bags and seat assignment benefits. I do not see value is putting a lot $$$ on AA card to get some small EQM and EQD because I will re qualify...
I do not fly UA but I am AA EXP for the last 9 years. About two years ago I ditched all my AA-branded cards because I would rather charge AA travel to Chase Sapphire. As lifetime PLT with AA, I do not need free bags and seat assignment benefits. I do not see value is putting a lot $$$ on AA card to get some small EQM and EQD because I will re qualify for EXP next month without any help from CC. Admirals Club is a a business expense. Yes, I do spend a lot travel and AA tickets but there are no attractive propositions from airlines recently especially with a rapid devaluation of award charts.
Why would any consumer willingly choose an inferior product? This reminds me, I need to cancel my Explorer.
1. United award redemption options are a joke for the most part. I used to transfer points to United from Chase all the time for both United and Star Alliance partner redemptions. Now I rarely do as Singapore Air offers a much better value proposition for Star Alliance flight redemptions. Probably wouldn't even notice if United was no longer a transfer partner. United needs to fix the rewards program they trashed, not blame Chase for...
1. United award redemption options are a joke for the most part. I used to transfer points to United from Chase all the time for both United and Star Alliance partner redemptions. Now I rarely do as Singapore Air offers a much better value proposition for Star Alliance flight redemptions. Probably wouldn't even notice if United was no longer a transfer partner. United needs to fix the rewards program they trashed, not blame Chase for their incompetence.
2. Increase the value proposition for the United card. Earn status though spend, higher earn rate for different categories, reduced price awards for cardholders, etc.
3. Have Chase remove the 5/24 restriction from the United card and people might actually sign up for it. Chase has far too many great cards to waste a 5/24 slot on the mediocre United card that is just going to sit in a drawer after meeting minimum spend.
I've always been surprised Delta doesn't see this as more of a problem, given the number of ways one can earn more Delta miles with other Amex cards than with Delta's own cards (if one should want to earn Delta miles). But I think part of the difference is that none of the other Amex cards with bonus categories have ever "broken through" to become widely known and carried in anything like the same way that the CSR has.
I see this as a warning shot that Chase UR could be devalued again. If United isn't happy they could potentially push Chase to change the transfer ratio of 1:1 to less than an equal conversion of UR to Mileage Plus.
United needs to give me a reason to use their card... I have the club card for just that, the club... but NEVER use it... the CSR is much more flexible with earning AND spending... Hotels? Not just flights.
He's being greedy here... People do earn with the CSR and transfer to United Mileage Plus... Though I would never LOL
The big kicker for me is EQD... Using my CSR points gets me...
United needs to give me a reason to use their card... I have the club card for just that, the club... but NEVER use it... the CSR is much more flexible with earning AND spending... Hotels? Not just flights.
He's being greedy here... People do earn with the CSR and transfer to United Mileage Plus... Though I would never LOL
The big kicker for me is EQD... Using my CSR points gets me EQDs... Using United Miles does not...
Sounds like Kirby wants his cake and your brownies...
I actually received a survey today from United related to a potential new CC. Nothing too innovative on the sample used through the survey ($450/year, UA Club Access, $2 UA spend, $1.5 all other, priority boarding/bags/etc), but their questions towards the end were interesting.
Questions posed about what would make a UA card more attractive. One item was users could potentially apply credit to PQDs and PQMs through spend thresholds to earn status. That...
I actually received a survey today from United related to a potential new CC. Nothing too innovative on the sample used through the survey ($450/year, UA Club Access, $2 UA spend, $1.5 all other, priority boarding/bags/etc), but their questions towards the end were interesting.
Questions posed about what would make a UA card more attractive. One item was users could potentially apply credit to PQDs and PQMs through spend thresholds to earn status. That would definitely make a United card more appealing, and move the card to the front of people's wallets.
I wonder how much of this is also affected by transferring to from Chase to Singapore to use less miles.
Simple way to solve this for United:
1) increase points earned per $ spent on its own cards. 2 per $ on United spend is a joke. Needs to be 3-4 to be competitive. On premium club card offer 3x on dining 4x on UA purchases.
2) allow one to earn status via spend, or at least get 75-80% that way
3) quit devaluing points causing people to not want to hold one currency
I agree this is a United problem, not Chase. As a Delta Flier I have and use the Delta Reserve Amex for 2 reasons 1) the lounge access benefit and 2) getting 10k MQMs after hitting $30k in spend. Otherwise I would use my Sapphire reserve or SPG card for for spending. There is no value for United card other than simply holding it.