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Over the last few years, the United MileagePlus program has been steadily losing value, with yet another devaluation unveiled just a few weeks ago. But while United has been making award redemptions more expensive, it's also offering new options for redeeming MileagePlus miles.
Amidst the onslaught of credit card updates and program changes, United has rolled out yet another new way to redeem miles, and this one is actually a decent deal. United MileagePlus cardmembers can now redeem United miles at 1.5¢ per mile to offset credit card annual fees.
With MileagePlus miles, you have a few redemption options for things other than standard award bookings. For example, you can use United miles to pay for a United Club Membership (between 0.73–0.76¢ per mile) or use miles to offset cash airfare paid with a United co-branded credit card (1¢ per mile). Neither of which presents a particularly compelling value.
Due to the financial instability brought on by COVID-19, loyalty programs started cutting back on non-travel redemptions in late March. Simultaneously, credit card issuers began offering statement credits, bonus points and other changes to keep cardmembers from canceling their credit cards.
One of the focal points for these new initiatives has been the airport lounge memberships offered for holding the premium co-branded cards of major airlines. These include:
- Admirals Club membership for cardholders of the Citi® / AAdvantage® Executive World Elite™ Mastercard®
- United Club membership for cardholders of the United Club℠ Infinite Card
- Delta SkyLounge membership for cardmembers of the Delta SkyMiles® Reserve American Express Card
With all of these clubs closed for the foreseeable future, cardholders have been hard-pressed to justify the higher annual fees.
Annual Fees Payable with United Miles
United's newest redemption option may blunt the pain of not being able to travel right now. Noticed initially by DansDeals, United has started allowing co-branded cardholders to redeem United miles to offset the annual fees for some cards. Even better, the conversion pegs United miles at a surprisingly reasonable value of 1.5¢ each.
As you can see below, I was given the option to redeem 6,333 miles to offset the $95 annual fee on my United℠ Explorer Business Card:
- Redeem United Miles at 1.5¢ per mile towards reimbursing the annual fee of co-branded credit cards.
- Your credit card's annual fee must have been billed in the last 90 days to qualify for reimbursement.
- It's unknown how long United will offer this redemption option.
It's worth noting that this form also allows for partial annual fee reimbursement. For instance, the annual fee for my United Explorer Business Card (which is now closed to new applicants) is $95. If I only wanted to use my miles to cover $50, I could put $50 in the dollar amount and redeem a smaller quantity of miles. This could be a way of getting value out of an otherwise unusably small amount of miles.
Lastly, United has designed this menu for cardholders whose annual fee has posted in the last three months. However, it's also accessible for those with annual fees posting in other parts of the year. It's unclear what would happen if cardholders are dishonest with the month that their annual fee posted. However, I would advise against trying this. United will deduct your miles immediately, and you may have trouble getting those miles back if there's a matching error with Chase.
I have mixed feelings about this. While 1.5¢ is a reasonable value to assign United Miles—even marginally higher than what I assign them—Delta and American have responded to the same issue by offering statement credits to qualifying members holding their respective premium credit cards.
With that in mind, we've heard that United has also recently offered statement credits to some premium cardholders. But unlike American and Delta—who are issuing these statement credits automatically—United requires that you call to request it. Unfortunately, there's no guarantee that you'll receive the credit, but it's worth calling and inquiring.
In the end, award flights are still the best way to use United miles. However, 1.5¢ per mile is a respectable redemption. When travel is uncertain, and finances are tight, redeeming United miles to offset an annual fee could be an acceptable way to keep an account open without spending the cash.
Would you use United miles to reimburse an annual fee at 1.5 cents each?
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