United’s Relationship With Chase Bank Under Review?
 

https://www.flyertalk.com/articles/u...er-review.html

What's the skinny on this?

Note that the UA executive previously worked at AA. Further note that AA does not accept transfers from any USA-based consumer credit card program. (Starwood is a hotel program.) Recall also that UA only reluctantly agreed to participate in Ultimate Rewards, after the merger with CO. If one of UA's grievances is that Sapphire Reserve and other Ultimate Rewards cards are cannibalizing co-branded MileagePlus cards, we might see UA exit Ultimate Rewards, or some restriction on transfers.

History: When Ultimate Rewards launched in 2009 there were four transfer partners (BA, CO, IHG, Marriott). UA did not join until late 2011.

Just curious, what exactly does underperform mean in this context? Not enough charges on the CC, so Chase does not buy enough miles from United? And why would that be a problem, I always thought miles are a big liability on the books of airlines.

Unredeemed miles are a liability, but that's an accounting term. It doesn't have a negative connotation in this context. UA wants to sell as many miles as they can, at as high a price as they can -and- they want to maximize the bounty that Chase pays them for each new co-branded account. Mileage Plus also wants to maximize customer engagement, and they might conclude that a multi-partner transfer program doesn't achieve that objective.

I don't know this, but I'd expect that there is some form of revenue to United for spend on their co-branded cards while spend on the CSR, there wouldn't be any kickback for that. I'd be willing to bet that CC spend on the United co-brand cards is down, maybe a lot, since the CSR release, since if you hold both, there's no reason to spend on your United card when you earn more points on the CSR (unless it's a United flight and you need the checked bag waiver, or you're spending to meet the PQD waiver). Also with the United card being 5/24 restricted that must be limiting new sign ups at least a bit.

As a guy that just bought a UA ticket today using CSR, this is perfectly timed.

The UA Chase products are simply inferior. I'd suggest that UA use caution here - I'm already close to dumping my UA Chase card.

I have a feeling that UA's "enhancements" will backfire on them.

Here's some free advice for Kirby - make your card and FF programs more compelling and you will see your customers return.

Inferior to what though? Their competitor's cobrand cards? Or the premium cards, which is going to be true of basically all of the $95/yr airline cards?

UA's card isn't *that* different from the competing airlines. The main differences between the MileagePlus Explorer and say the Citi AA Platinum and Amex Delta Gold IMO are: 1) UA gives you 2 club passes a year, the other two don't give any. You can use these or resell them, I mean they're worth $15ish on ebay; 2) UA gives you access to better economy award availability on some flights, YMMV, if that's of any value; and 3) UA makes you buy your ticket with the card for a free checked bag, while AA/DL don't, so that's a bit of a ding for me.

The other competitive argument, who else would UA pair up with for a co-brand card? Every other major issuer already has an airline, or in Barclay's case they have like 4, so.... where would they go without DL or AA throwing a fit? I think UA and Chase, for better or worse, are kinda married to each other for the near/mid term.

Edit: now that I think about it, there really isn't much reason to spend on any of the normal airline cards, because if you're earning faster on other Amex/Chase products and can just transfer to Delta and United/SW, respectively, why use the airline card at all unless you're going for the PQD waiver? Chase/UA actually give you an incentive to spend because you get a 10k mile bonus if you spend $25k/yr on the card. Again, something the AA/DL cards don't have at the $95/AF level, but that's a lot of spend to put on 1 card that has no meaningful multipliers.

Chase buys miles from UA. If you use a MileagePlus co-branded card the rewards are automatically deposited in your UA account, and Chase pays for them. If you use a card that earns Ultimate Rewards, United isn't involved unless you convert points to UA miles, at which point Chase pays.

The price per mile may not be the same in these two contracts, but the big difference is engagement with MileagePlus. The customer earning UR isn't committed to UA.

Good post, krazykanuck.

I should have been more clear - I think CSR is superior to all of the airline branded cards.

In my experience, the UR portal is often competitive or better than (to me) the ever diminishing availability of flights via FF programs.

I have wondered what Chase's other co-branded card partners (UA, Marriott, etc) think about UR.

Here's my guess: They've lost material market share to UR cards and they aren't happy about it.

I'll be interested to see how this plays out.

Lots of reasons one might spend on UA cards. For example, many need to hit the PQD waiver, which means mine gets at least 25K, even if it means many restaurant purchases gets me 2x vs. 3x (I have a legacy UA card that doesn't exist anymore). Also get groceries, drug stores, gas stations at 2x, as well, while CSR only gives me 1x, so I use it there instead of CSR.

UA could pair with anyone they want. I doubt they will go away from Chase...too much $ for both, IME. And while there aren't a lot of huge, national banks left, there are lots of big regional banks that probably would jump at the chance to sign up with UA on co-branded cards. Thinking banks like Fifth Third, or even TD Bank. Not necessarily household names in certain parts of the country (doubt those in California knows TD, for example), but if UA co-branded, they'd market and folks would still get it. There are also other bigger banks - does Wells Fargo, for example, have a big airline partner (though I would be very hesitant to get anything from WF with their reputation, but it could be an option).

It depends what you are looking for - CSR works better for a lot of people, but not everyone can afford or even want a card with a $450 AF.

The other issue is that no matter what, CSR (and Amex Plat...and Citi Prestige, etc.) are still out there and are competing. If Chase and UA were to end their agreement, UA would find another bank and have them offer their cards. And they'd still have the same issues of competing...doesn't matter which bank is issuing it. UA could, i suppose, pull out of UR, hoping that there would be many that switch back to a UA card (whether they are issued by Chase or someone else). But I'm not sure that would work out so well. CSR and similar are always going to offer more flexibility than single-airline branded cards. UA could try to add new features to help make up for that, but reality is, they will never be as flexible.

I think Kir Baby doesn't like a couple of things:

• Chase's self-serving 5/24 rule stymies issuance of UA-branded cards to otherwise perfectly qualified applicants. He wants his cards in lots of wallets and couldn't care less how many other cards we've applied for in the last two years.
• As others have mentioned, the ability to convert UR points into UA miles disincentives use of UA-branded cards. For example: I book all UA travel on my CSR card rather than my Explorer card because I'd rather get 3 URs than 2 MPs. I'm elite, so I don't need to worry about free bags.

Hopefully, Kir Baby's gambit will release UA-branded cards from the yoke of 5/24. Or, even better, if a new bank begins issuing UA-branded cards we can all have a field day applying willy-nilly.

This. Its whats preventing me from getting an united card. Will fall below 5/24 in a few months and will be applying for the marriott card (replace spg) and maybe save a pull in case the 100k reserve bonus comes back. Would like an united card, but thats just not going to happen.

Solely for the bonus points or something else?

Bonus mostly. And on the off chance a new card gets issued due to the merger.

Have Presidential Plus Card but likely not much longer. Received "offer" yesterday: spend 49K by the end of the year and get 5000 miles- not a misprint. I know someone else with same card: spend 20K and get 7500 miles. Really?