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What United Eliminating Its Award Chart Means for Your Credit Card Strategy

April 08, 2019
7 min read
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To the chagrin of many US-based travelers, United announced that it was taking a page out of Delta's playbook and removing its fixed award chart in favor of the dreaded dynamic pricing for flights beginning on Nov. 15.

It will take weeks for us to fully understand the implications of this change, but TPG's Summer Hull dug through a number of different routes and found that while some awards are going down in cost (hello 5k domestic economy awards), many others, especially international routes and premium-cabin flights, are increasing in cost by 30% or more depending on the date. Perhaps the only saving grace is that dynamic pricing will only apply to United-operated flights. For now, at least, United's partner award chart for Star Alliance flights will remain intact.

There is absolutely no sugarcoating this news, as many award travelers will now need to spend more miles to book United award flights. Some of the most egregious pricing comes during peak holiday travel time, when the most people are trying to use their miles. I'd say that the people hurt the most by these changes are those who live in a United fortress hub like San Francisco (SFO) or Houston (IAH) and can't switch their loyalty to a different carrier.

In close second place would be people who've built the majority of their United redemption strategy around Chase Ultimate Rewards. One of Chase's most attractive airline transfer partners has been United MileagePlus, and while points will continue to transfer at a 1:1 ratio, you'll likely need to transfer a lot more points to book the flight you want. Still, there are a few things you can do to limit the effect this devaluation has on your own points-earning strategy with credit cards...

Fixed-Value Cards Are Looking More Attractive

I love my Chase Sapphire Reserve because it gives me the flexibility to transfer points to airlines across all three major alliances and unlock a number of high-value award sweet spots. Still, every time an airline devalues its award chart, adds fuel surcharges or imposes some other restriction on when/how you can use your miles, fixed-value cards begin to look a lot more attractive.

If you aren't familiar with this genre of rewards credit cards, think about the Barclaycard Arrival Plus World Elite Mastercard or the Capital One Venture Rewards Credit Card. Both of these cards earn 2 miles per dollar spent, and miles can be redeemed at a rate of 1 cent each toward the cost of travel. These cards are also sometimes referred to as "purchase erasers," since you redeem your points to wipe eligible travel purchases off your card statement. Of course, the Venture Rewards card added transfer partners in 2018, so it's not only a fixed-value card.

While United's dynamic pricing is in theory supposed to reflect day-to-day fluctuations in demand and pricing, there are some scenarios where buying the cash ticket you want on a fixed-value credit card is a clear winner. For travel on Dec. 7, United wants 72,000 miles for a one-way economy award from Newark (EWR) to Hong Kong (HKG).

Meanwhile, the cash ticket is only $675, or 67,500 points with either the Arrival Plus or Venture Rewards card.

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As a bonus, the Arrival Plus offers a 5% rebate on redeemed miles, so your net cost is only 64,125 miles or ~$641. When you consider that both of these cards earn miles at a 2x rate on non-bonus purchases, not only will you spend fewer miles to book your ticket but you'll also earn the miles you need faster.

Leverage the Chase Ultimate Rewards Portal

Of course, this devaluation doesn't mean that Chase Ultimate Rewards points are suddenly worthless. They were, and still are, one of the most valuable loyalty currencies you can possibly have thanks to their seemingly endless flexibility.

One great perk of the Chase Sapphire Reserve is that it offers a 50% bonus when you redeem your points directly through the Chase portal, allowing you to book this same flight for only 45,040 points. If you have the Chase Sapphire Preferred Card or the Ink Business Preferred Credit Card you'll get a 25% bonus, so this same ticket would cost about 54,000 Ultimate Rewards points.

In all of these cases, whether you book with a fixed-value card or redeem Chase Ultimate Rewards points or even Amex Membership Rewards points with a Pay With Points bonus, these flights will be booked as revenue flights, meaning you'll earn both redeemable award miles and Premier Qualifying Miles (PQMs).

I should note that this strategy doesn't work as well for those looking to fly long-haul in United's shiny new Polaris business class. On the Newark to Hong Kong route, one-way cash tickets start at ~$4,500, and even at its worst, United's variable pricing is only going to charge you about 210,000 miles for a business class award (for now).

What About United Credit Cards?

There are also the United cobranded cards to consider. These don't offer any redemption rebates or fixed-value redemption options, so with the airline's switch to dynamic award pricing the United Explorer Card, United Explorer Business Card and United Club Card will not be the best options for maximizing your purchases if you're looking to fly on UA metal. As we'll cover in another post, booking United flights through other programs such as Avianca LifeMiles and Singapore KrisFlyer will often be a better bet now. The information for the United Club Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

However, the United cobranded cards could still be worth holding for benefits like a free checked bag (when you pay for the ticket with your United card), a Global Entry/TSA PreCheck application fee credit (up to $100), two United Club one-time passes per year and expanded award availability — all available on the United Explorer Card. Plus, in early tests by TPG staff, it appears that holding a United cobranded card can get you a 1,000-mile discount on awards, though we're still testing this and you may find different results in your own searches.

Bottom Line

There's no way around the fact that United pulling its award chart is bad news. The airline has at least given us plenty of warning to adapt to these changes, so if you were hoarding MileagePlus miles for a specific redemption you can still use them at the old fixed cost for flights until Nov. 15. After that, it's up to you to readjust your points strategy by incorporating fixed value cards, utilizing pay-with-points bonuses, diversifying into different points currencies and leveraging other Star Alliance loyalty programs to achieve your goals.

Featured image by Photo by Zach Honig / The Points Guy
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.