No United Airlines credit card? Soon you will earn fewer miles than other travelers.
United is revamping its MileagePlus frequent flyer program to reward travelers with more miles and lower redemption rates, including for some of its long-haul business class seats, if they have one of the airline’s credit cards. It’s the latest move by an airline to reward its biggest-spending customers.
The changes mark the biggest shake-up to the lucrative program in more than a decade, when United began rewarding customers for the amount they spent, not just the distance traveled.
Andrew Nocella, United’s chief commercial officer, told CNBC in an interview that the airline had been working on the changes for about 18 months and aimed to reward its most loyal customers.
The change also comes as United attempts to stand out in an increasingly competitive travel credit card and rewards landscape. This space also includes American Express’ Platinum, Capital one‘s Venture Chase Sapphire reserve cards.
United Airlines planes taxi for takeoff from San Francisco International Airport.
Tayfun Coskun | Anadolu | Getty Images
“In the credit card space in general, a lot has changed over the last five to 10 years in terms of the number of travel credit cards,” Nocella said. “What I’m thinking about in making these changes for United is making sure that if you hold the credit card, you put it at the top of your wallet, and if you don’t hold the credit card, there’s a reason to get the credit card that seems incredibly compelling if you want to fly United Airlines and if you want to take that… trip to Tahiti or Rome or wherever we might take you.”
The changes will come into effect on April 2. United plans to display discounted award flights on its website “so customers can see exactly how much a United card could save them on their trip,” the airline said.
United’s loyalty program update is part of a trend among airlines to reward frequent flyer program members based on their spending. About a decade ago, major carriers tweaked their loyalty programs to reward customers for dollars spent on miles flown.
Airlines also encourage customers to sign up for their credit cards by offering perks such as no checked baggage fees and early boarding.
What’s changing with United MileagePlus
United MileagePlus primary cardholders will get more miles per dollar spent on United flights compared to customers without a card, and higher fares than currently. Their income also increases when they actually use this card to purchase the ticket.
Meanwhile, cardless customers will earn less than today.
For example, a traveler without a United Airlines co-branded credit card will get three miles per dollar spent on a ticket, compared to five miles currently. Under the new structure, a cardholder could earn six miles, and more if they use the card to purchase it. Those with MileagePlus elite status also earn miles at a higher rate.
United debit cardholders will also receive more miles once they spend $10,000, United said.
Discounts on redemption rates for cardholders
United will also now allow customers with one of its credit cards to redeem their miles for flights at at least a 10% discount compared to those without a card.
The carrier said that, as an example, an economy class award ticket worth 15,000 miles will cost 13,500 without Elite Premier status. United said it was setting aside a special inventory of discounted award tickets for cardholders, including for front-row Polaris seats.
Advantages for the elites
Those with MileagePlus Premier elite status will enjoy greater discounts and better mileage redemption. Elites with a card receive at least 15% off mileage tickets.
United said its seat in a Polaris long-haul business class cabin traveling 200,000 miles would be 170,000 miles if the cardholder had Elite Premier status. United added that the lowest-cost “Saver Award” seats for Polaris would be available to MileagePlus members with a United card, seats that were previously reserved only for high-level elites.
Their earning rates also increase if they have both a credit card and status. MileagePlus 1K, the highest tier before Global Services, will get 17 miles for every dollar spent when using their United Club credit card.
What happens to basic economic flyers?
United Airlines travelers who do not have a credit card will not receive miles for basic economy tickets. American airlines last year it also said it would no longer allow travelers in that class to earn miles, following an earlier decision by Delta Airlines. There is, however, an exemption for United Premier elite status holders, who can still earn miles in basic economy.
What about business travelers?
Business travelers are often required to book with company credit cards, in accordance with corporate travel policies. But United said people who personally hold a United credit or debit card will still get more miles than an employee who doesn’t have one.