With the latest United award earning changes, figured it’s worth breaking this down because a lot of people mix it up.
United isn’t a bank. Chase issues United credit cards. United just licenses its brand and provides the miles.
When you earn miles from flying, those miles are basically a rebate from United. You buy a $500 ticket, they give you miles. That comes straight out of their own economics. It’s a cost they take on to drive loyalty.
Credit card miles are totally different.
When you swipe a Chase card, Chase earns interchange fees and sometimes interest. United doesn’t see that money. When you earn miles from spending on a United co-branded card, Chase is actually buying those miles from United and then giving them to you.
Same thing if you transfer Chase Ultimate Rewards to United. Chase pays United for those miles.
So flight-earned miles cost United money. Card-earned miles make United money.
That’s why you’re seeing program changes that favor cardholders and de-emphasize pure flying. One stream is a revenue driver, the other is a loyalty expense.
Not saying people have to like it, but economically it makes sense from United’s side.
0