Today Chase announced a new rewards transfer partnership with United Airlines, which will allow Chase Sapphire Preferred and Ink Bold cardholders to move their UltimateRewards points to United MileagePlus accounts and subsequently redeem them for flights offered by United or any other Star Alliance member.
“We are thrilled to offer our customers the exclusive opportunity to transfer Ultimate Rewards points for equal award miles with MileagePlus, the world’s leading frequent flyer program,” said Sean O’Reilly, the general manager of Chase Card Services. “The addition of MileagePlus to Ultimate Rewards enables our cardmembers to simply transfer points and have more travel options than ever before.”
Chase already allows customers to immediately transfer their accumulated points for an equal number of points or miles offered under the rewards programs of Continental Airlines, British Airways, Korean Air, Amtrak, Hyatt Hotels, Marriott, and InterContinental Hotels Group (IHG). This web of corporate partnerships increases the inherent value of Chase rewards points, in that consumers can redeem them for a wide variety of travel options, rather than simply the merchandise, dining, gift cards, etc. usually associated with points credit cards. Bringing United and its MileagePlus program into the fold heightens this value even further.
“The transferability of points across rewards programs diminishes the importance of affinity credit cards” said Odysseas Papadimitriou, CEO of Card Hub. “This is great news for consumers because they can get more utility from their points while at the same time making room in their wallets, given that a Chase credit card can now essentially serve as rewards card tied to any of Chase’s corporate partners.”
The addition of United to Chase’s rewards transfer program also creates an interesting dynamic, both for the companies involved in the deal as well as prospective customers of both. You see, United has its own credit card, the United MileagePlus Explorer Credit Card, which offers a 25,000 mile initial rewards bonus. There is now a disincentive to opening this card, however, given that the Chase Sapphire Preferred Card offers 50,000 bonus points to customers who spend $3,000 during their first three months of cardmembership. Consumers can simply manipulate the system and get more United rewards miles by first opening the Sapphire Preferred Card and transferring their bonus points to a MileagePlus account.
Certain types of consumers can also benefit by applying a similar approach to long-term use of the Chase Sapphire Preferred Credit Card. As opposed to the United Mileage Plus Card, which only offers 2 miles per $1 spent on United or Continental Airlines airfare purchases, the Chase Sapphire Preferred Card offers two points per $1 spent on all travel and dining as well as a 7% annual dividend on rewards earned. Consumers who travel and eat out often can therefore earn far more United Miles by taking the long way home, so to speak, and using the Chase Sapphire Preferred for spending and rewards earning before transferring these rewards to a United MileagePlus account and ultimately redeeming them.
It will be interesting to see how Chase and United handle these little loopholes, especially if a large number of consumers start taking advantage of the opportunity it creates.
