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You can use United miles to pay for some United credit card annual fees - but should you?

May 18, 2020
5 min read
United Club United Explorer_1_CCSL
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In a time when some consumers are short on cash and most aren’t sure when they’ll start traveling again, non-travel redemptions have increased in popularity. Usually, redeeming your points and miles for statement credits and other non-travel redemptions provides much less value than you could get from redeeming for hotel nights or flights. In fact, TPG's Samantha Rosen even wrote a post begging readers not to use their points on Amazon and Seamless.

Although the best use of United miles is generally booking flights, that's not really an option right now. Luckily, some United credit cardholders now have a new option for using their United miles. As DansDeals reported, cobranded United cardholders who had an annual fee billed in March, April or May can now use United miles to reimburse their annual fee.

TPG's Summer Hull found that she could redeem 30,000 United miles to cover the $450 annual fee on her United Club Card (card no longer available for new applicants; replaced with United Club Infinite Card) that was billed in May. This means that she'd get a value of 1.5 cents per mile from this redemption.

You can use 30,000 United miles to reimburse the United Club Card's $450 annual fee.

Should you redeem United miles to cover your annual fee?

Considering that TPG's valuation of United miles is 1.3 cents each and you can get a value of 1.5 cents each towards your annual fee, mathematically the answer is yes. But, each traveler values their miles and their travel rewards credit cards differently.

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Here are a few other aspects to consider:

  • Have you been targeted for other offers? With coronavirus concerns disrupting travel, Chase may be offering a spending challenge or waived annual fee for cardholders who aren't currently finding value in their card.
  • Do you want to keep the card? Airline cards can provide significant value with benefits like lounge access and/or a checked baggage allowance. But if you aren't sure when you'll start traveling again, you may want to downgrade or even cancel your card instead of using miles or cash to pay your annual fee.
  • How many United miles do you have? If you don't have ample United miles in your account, you may want to save the miles. Especially if you have a post-pandemic trip in mind.
  • What value do you usually get from your United miles? If you usually get more than 1.5 cents per mile from your redemptions when using United miles, you may prefer to save your miles for future use.

Related reading: How to redeem miles with the United Airlines MileagePlus program

How to redeem United miles towards your annual fee

If you decide to pay for your United credit card's annual fee using United miles, you can do so here. Remember to check on Chase's website whether your annual fee was billed in March, April or May as well as the cost of your annual fee before using your miles.

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Even though my United Explorer Card's annual fee wasn't billed during these months, I was still given the option to redeem United miles to offset my annual fee. But, I didn't hit the submit button, since it was unclear what would happen to my miles since my annual fee wasn't billed during an eligible month.

One interesting aspect is that partial annual membership fee reimbursement is allowed. This means that you can use any number of miles. For example, I could zero out my United mileage balance by redeeming all 661 miles for a $9.92 reimbursement toward my annual fee.

Bottom line

If your annual fee is billed in March, April or May for a cobranded United credit card, it's certainly worth considering whether you should pay using United miles at a rate of 1.5 cents per mile. Especially if you're currently trying to conserve cash but have ample United miles.

Featured image by (Photo by John Gribben for 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.