United Airlines is fundamentally reshaping its MileagePlus loyalty program, prioritizing customers who hold its co-branded credit and debit cards. The changes, set to take effect on , will significantly increase mileage accrual rates for cardholders while simultaneously reducing them for those without a United-affiliated card.
Under the new structure, United cardholders will be able to earn up to twice as many miles per dollar spent on flights compared to non-cardholders. For the airline’s most frequent flyers – 1K members who also use a United Club card – potential rewards could reach as high as 17 miles per dollar on eligible flights. In contrast, general members without a United credit card will earn just three miles per dollar on most tickets. A significant change is the elimination of mileage accrual for non-cardholders purchasing basic economy tickets.
The move reflects a broader industry trend of airlines increasingly tying loyalty benefits to credit card spending, rather than solely on flight activity. “It’s a copycat industry – I definitely think others will follow,” said Ted Rossman, a senior industry analyst at Bankrate. “We’ve seen these programs become a lot more tied to how much you spend, as opposed to actually how much you fly.”
This shift is driven, in part, by the substantial revenue and profit generated by co-branded credit card programs. Michael Taylor, senior managing director of travel, hospitality and retail at JD Power, noted that “People don’t fly every day, but they can use that card every day. Investors are going to be saying to airlines, ‘Are we leaving money on the table?’”
The announcement comes as airlines face increasing pressure to maximize revenue from all sources. While United’s stock closed down nearly 6% on , coinciding with broader market concerns related to U.S.-Iran tensions and rising oil prices, the long-term impact of the MileagePlus overhaul remains to be seen. American Airlines and Delta Air Lines did not respond to requests for comment.
The Value Proposition of Airline Credit Cards
The changes raise the question of whether the benefits of a United co-branded card now justify the annual fees. For frequent United flyers, particularly those traveling for business, the answer is increasingly likely to be yes. Travel sites estimate that the new cardholder-only pricing could reduce the number of miles required for certain flights by as much as 40% compared to non-cardholder rates.
United currently offers four credit cards with annual fees ranging from $0 to $695. Mid-tier options, such as the Explorer and Quest cards with annual fees of $150 and $350 respectively, can quickly offset their costs through perks like free checked bags. The premium-tier card, while carrying a substantial $695 annual fee, offers higher mileage earning rates and access to United’s airport lounges.
However, the value proposition diminishes for occasional flyers. “This is not good news for the family that flies once or twice a year in basic economy,” Rossman cautioned. “People like that have been deprioritized by airlines in recent years.”
A Shift in Loyalty Program Dynamics
The overhaul represents an unprecedented shift in airline loyalty program dynamics, according to Ben Mutzabaugh, managing editor of aviation at The Points Guy. He highlighted that earning rates are now tied not only to having a credit card, but to which credit card a customer possesses.
This tiered approach to mileage accrual is likely to prompt other airlines to re-evaluate their own loyalty programs. “A strategy in which United has tied earning rates not only to have a credit card – but also to which credit card – is sure to catch the interest of Delta, American and others,” Mutzabaugh said. “You can bet they’ll be looking for clues on how it’s working for United.”
Evaluating the Costs and Benefits
Before applying for an airline-branded card, consumers should carefully consider their spending habits and travel patterns. Experts recommend asking several key questions: Can I afford another credit card? Do I understand the rewards and how to redeem them? And will I realistically earn and redeem enough points to justify the annual fee?
For those not loyal to a specific airline, general travel cards, such as the Capital One Venture X or Chase Sapphire Reserve, offer alternative rewards programs with the flexibility to transfer points to various airlines. However, even with these options, customers will miss out on United’s steepest discounts available exclusively to cardholders. As Kurt Adams, a senior marketing manager at Going, pointed out, “Ultimate Rewards points still transfer to United, but if you want the 40% lower rate, guess what – you’ve got to get a United card.”
Southwest Airlines remains an outlier, continuing to offer benefits like free Wi-Fi and unlimited points-based bookings to all members, regardless of credit card status.
