Abfinvail,

It seeme like this program does not present any downside to consumers- they can continue to collect and use miles as before. It has no effect on redemption rates.

For Chase my guess is that offering what amounts to a 1% rebate probably is slightly cheaper than what they pay for an MP mile. They also gain the ability to market the 'no blackout dates' feature of competing cards.

There are a few classes of consumers that could benefit:
- Those that fly so much that they don't want to use their miles for travel (probably few FTers- hey why do they carry a UA card anyways?)

- Those that routinely use miles for awards in markets where the Choices cost is less - for instance a domestic Standard at 40K (soon to be 50K) may exceed the choices cost, in addition the passenger gets the mileage benefit of a paid ticket Even if the value is close (say choosing between 45,000 choices for a $450 fare or a 40K standard award) the benefits of better availability and earning miles and EQMs may win out.

- Those that buy tickets at the very low end- for example, the lowest paid fare LAX-LAS is $98.60 RT or 10,000 choices. Depending on status, with online booking bonus and OLCI bonus you could earn up to 4,000 miles with your paid ticket, making the net cost of the trip mighty cheap compared to using a 15,000 mile short haul award.

For you it doesn't sound like that big a deal. For myself I also like to use my miles for premium class overseas trips so I probably won't use the new feature either.