Which credit card to use to maximize United miles?

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Update: This offer for Barclaycard Arrival Plus™ World Elite MasterCard® is expired, but there’s currently an opportunity to earn 50,000 miles after spending $3,000 within first 90 days of having the card. Learn more about the special offer here.

I get a question on this topic several times a week in one form or another, so instead of answering by email every time, I’ll make a post I can hopefully refer to in the future. The question I get is usually from United flyers that want to maximize the number of United miles they earn through credit card spend, and are wondering which credit card they’re best off using. The two most practical options are the Chase Sapphire Preferred® Card and United MileagePlus® Explorer Card.

While I covered the benefits of the Chase Sapphire Preferred® Card in great detail in this post, here are the highlights:

  • Earn 2X points on travel and dining
  • Ability to transfer points instantly to virtually any Chase co-branded loyalty program
  • No foreign transaction fees
  • Access to the Ultimate Rewards Mall (don’t underestimate this benefit, as I learned last month)
  • Sign up bonus: Earn 50,000 bonus points after spending $4,000 within three months

The current United credit card on the market is the United MileagePlus® Explorer Card, which comes with the following benefits:

  • Earn double miles on tickets purchased from United, and 1 mile per $1 on all other purchases
  • First checked bag free and priority boarding for non-elites
  • Last seat award availability on standard awards for non-elites and upgrades on award tickets for elites (see this post from July)
  • 30,000 bonus miles after you spend $1,000 on purchases in the first 3 months from account opening

So as you can see, in terms of the ability to earn miles, the Chase Sapphire Preferred® Card is better than the United MileagePlus® Explorer Card in almost every way. With the Chase Sapphire Preferred card you earn the equivalent of 1 point per mile, while on ALL travel and dining purchases (as opposed to just United purchases with the Explorer card) you earn 2 points per dollar. Beyond that, Ultimate Rewards points with the Chase Sapphire Preferred card are much more flexible and the card has no foreign transaction fees. The flexibility with the points isn’t just that you can transfer them to several loyalty programs, but also that you can transfer them to a frequent flyer account in someone else’s name.

That being said, the United Explorer card might be worth having in your drawer and not necessarily using, if you’re a non-elite that flies United enough to benefit from priority boarding, a free checked bag, or last seat award availability on standard awards, or if you’re a United elite that values upgrades on domestic segments. But those last two benefits don’t kick in until early next year.

But there’s a bit more to this question, since United once did offer a more rewarding credit card, the United Select Visa. The only problem is, they’re not accepting new members anymore as they’ve introduced the Explorer card, though for now claim they’ll continue to offer it for existing card members.

That card was actually very rewarding, and offered three points per dollar on United purchases, two points per dollar on gas, groceries, dining, and home improvement, and one point per dollar on everything else. Furthermore, if you spent $35,000 on the card annually you could get 5,000 bonus elite qualifying miles, plus one elite qualifying mile per dollar spent on United purchases, up to 5,000 elite qualifying miles annually.

There’s no doubt that’s a fantastic card, and it’s too bad they no longer offer it. The main benefit of that card was really triple points on airfare and double points on gas and groceries (much like the Premier Rewards Gold Card from American Express ), and double points on dining (much like the Chase Sapphire Preferred card). So you can still replicate the earnings ratio elsewhere, aside from the elite qualifying miles that could be earned through the card, which are valuable.

The advantages of the Chase Sapphire Preferred card over the United Select Visa remain the ability to earn double miles on ALL travel purchases (as opposed to triple only on United purchases with the United Select Visa) and no foreign transaction fees.

It really is a shame that United got rid of the United Select Visa in favor of the United Explorer card, though at least they’re introducing some useful benefits with the ability to upgrade award tickets and get last seat availability on standard awards (which United always allowed, previously).

Nonetheless, if you’re trying to earn United miles with your credit card spend, there’s absolutely no reason you should use the United Explorer Card over the Chase Sapphire Preferred card. But that’s not to say you shouldn’t have the Explorer card for the added benefits, even if it’s just collecting dust in your drawer.

Applications to cards mentioned above:
Chase Sapphire Preferred® Card
United MileagePlus® Explorer Card
Premier Rewards Gold Card from American Express

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Comments

  1. Nice analysis Lucky. I have the Chase SP card, but I think I will get the Explorer card ONLY for the fact that there will be upgrades on award tickets.

    And if UA follows in the footsteps of Delta, I wonder if UA branded Chase cardholder will get upgrade priority within their elite level?

  2. I’m lucky enough to have both the United Select and the Chase Sapphire. Between those two cards and the UR mall, I earn at least 2 miles per $1 on everything I buy (my UA Select also includes double miles on Home Improvement stores).

    Also, the UA Select comes with 5,000 anniversary RDM each year as well.

    It’s pretty sad that the Select isn’t available for signups anymore, because it’s a pretty awesome card for earning UA miles. I hope they let me keep it for a long time!

  3. +1 @ bmvaughn. I would’ve carried the Select card if it did have the 5K EQM bonus @ $35,000, but only the Platinum Class card does… which is why I carry that one instead.

  4. Lucky, if I already have a United Visa Select Card (signed up in 2008) and decide to apply for the Chase Sapphire Preferred, do you know if I will still receive the 50,000 bonus miles? Or would I be deemed ineligible because I already have a Chase card?

  5. Two words: Chase Freedom.

    Really, for anyone who craves UA miles, the Freedom and Sapphire Preferred cards go together like popcorn and butter. Freedom card has no annual fee & earns *five* Ultimate Rewards points per dollar in the rotating quarterly categories — and although Freedom-earned points can’t be moved directly to UA, they can be moved to a Sapphire Preferred UR account (*anyone’s*), and thence to any UA account.

    Yes, it’s a little annoying that the bonus categories rotate, but they tend to be pretty good ones (restaurants this quarter; gas & Amazon.com in Q1-2012). Also, the 5% bonus only goes up to 7500 points/quarter (i.e., $1500 in spend), so big spenders have to keep an eye on their totals.

  6. @ Charlie — Absolutely, as long as you haven’t had the Chase Sapphire Preferred card before you could earn the bonus.

  7. To add on to Beltway, if you have a Chase Checking account, there is an additional 10% of the base + 10 point bonus on each transaction, which is better than the Sapphire Preferred 7% dividend in many cases for in-person purchases, especially for small purchases.

    For Dining and Travel, the Freedom is better in cases where the charge is less than $10.31:
    2.07x <= 1.1x + 10
    0.97x <= 10
    x <= 10.309

    Restaurants was a 5% category this quarter, and I made VIP status in the Dining Rewards, so 5+ UR Rewards + 5 Mileage Plus points for every dollar spent at those locations is nice.

    The Q1 bonus categories are gas stations and Amazon.com.

  8. Shouldn’t the annual fee for these cards come into play? There is a breakeven point in annual spend, below which a no-fee card, or a card with a lower annual fee, would trump a higher annual fee card with better spending return.

  9. In addition to not earning 5k EQM for $35k spend as other commenters have pointed out, I don’t believe the Select earned double points on home improvement. Here’s what it says for my Select card on Chase.com:

    You’ll earn miles every time you use your card. Triple Miles on United purchases and Double Miles on gas, groceries and dining. You’ll also get Double Miles on travel with Star Alliance partners.

    An Anniversary Bonus of 5,000 miles is yours every year in appreciation of your membership. And you can earn up to 5,000 EQMs every year on all purchases made at united.com.

  10. @ AS — The annual fees on the Chase Sapphire Preferred and United Explorer card are identical — first year fee waived, $95 per year after that.

  11. I use my UA Select Visa for UA purchases, groceries, and gasoline. Chase Freedom for the quarterly 5% bonus categories, UR Mall, and small purchase that maximize the 10/10 bonus, and the Sapphire for non-rental car travel and overseas spend. For rental car, I use the Chase OnePass card for the primary insurance coverage.

    I also use my SPG Amex for domestic Starwood stays and the Amex PRG for non-UA flights, with the exception of AS, for which I use their branded card, which earns 3 points for AS spend.

  12. Ben,

    I got a Chase Continental card back in May 2011. I never had any kind of UA card. Will my CO card be converted to a UA card come 1/1/2012? Should I close the CO card by 12/31/2011 that way I may still get a bonus down the road under UA card?

  13. I use the Chase United Select for United miles (3x) and Groceries (2x). I have been using Chase Freedom for dining (5x for now) and then to United Select after that expires (2x). United miles I guess you would value at something above 1c/mile. [Lucky: in your comments on the Select card, it is UA MILES not points]. I use my USAA Mastercard for Gas (5x) and for everything else I use the Fidelity Amex 2% cash back on EVERYTHING. I don’t really see a good space for the Sapphire except for the sign up bonus.

  14. I think I’m missing something here. I have a CO OnePass Plus. From the perspective of purely earning miles for UA/CO, isn’t the 10k bonus for $25k annual spend equivalent to 1.4 miles per dollar — a 40% bonus? If my math is correct, the 10k bonus is better than the 7% Sapphire dividend up until $142,857 in spend (10,000/.07). Even at $50k spend, that 10k miles is equivalent to a 20% bonus, etc etc.

    Now if one wanted to transfer points to any other partner than UA/CO, then the Sapphire wins, but that’s an apples-to-oranges comparison. From the pure UA/CO miles earning perspective, I don’t see how 7% can beat 40%, even with all the 2x-10x bonuses from Sapphire or Freedom.

    I have a CO OnePass Plus and was interested in the Sapphire (does it really feel that good in the hand!!) but the numbers don’t work for me. Tell me I’m misinterpreting something.

  15. Any more Chase-Sapphire-Preffered blog posts, and you’ll have to rename this blog “One Ultimate Reward Point At a Time.”

  16. @ kaiserpeds — Keep in mind that the Sapphire Preferred earns double points on dining and ALL travel expenses (taxis, hotels, car rentals, flights, etc.). I don’t know about you, but I suspect for me (and many) travel “nuts,” that compromises a large percentage of the overall spend. As you said, the 40% bonus amount is only applicable if you’re spending exactly $25,000 per year. Spend less than that and you get nothing, and spend more than that and it can drop. If you’re spending $50K/year, I suspect at least 20% of those purchases are dining or travel, if your spending patterns are at all similar to mine.

    So it all depends who the consumer is. If you spend exactly $25K/year, then go with the OnePass card. If you spend less, a lot more, or spend a lot of money on travel and dining, go with the Sapphire Preferred. I would rather keep the United/Continental card and spend on it in categories that don’t have bonuses with other major cards.

  17. @kaiserpeds, I don’t want to have to tie up $25K in spend for a measly 10K bonus. I’d rather dedicate a good chunk of that spending to churning *other* cards & earning the initial bonuses for spending $X in Y months.

    Of course, as Lucky says, it all depends on your situation. If you have $75K in card spending/annum, sure, devote $25K to earning the annual 10K bonus on your CO card. But if you’re like me & have $25K-$35K of card spend each year, it’s better to spread that around.

  18. Its a bad day. I was just informed that I am getting a Corp. Amex Card and that ALL my business expenses need to go on it, so that THEY can get the rewards from Amex. Expect to see more of this folks…. 🙁

  19. I got the targeted MP Explorer offer for 50k miles for first use. Although I would rather get the Sapphire Preferred, I don’t think I can manage $3k spend in 3 months (I just don’t have huge expenses at the moment). Should I go for the MP Explorer card then?

  20. @ Kevin — That is a really good sign-up bonus, especially for after the first purchase, so I’d go with it. If you plan on using the card long-term, though, I’d still consider the Sapphire. Keep in mind that through Amazon payments you can generate $3K of spend over three months for nothing.

  21. Hi Lucky,
    I notice that the United Exporer card also has no foreign transaction fees.

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