Use Miles to Offset Purchases and Annual Fees

UA has added a new way to use miles. Holders of UA co-branded credit cards can now use UA miles to offset annual fees or UA flight purchases. You can redeem directly on the official website, which is quite convenient. When offsetting an annual fee, the miles are worth 1.5c/p, so a $95 annual fee requires 6,333 miles. When offsetting a UA flight purchase, the miles are worth 1c/p, so a $100 ticket requires 10,000 miles. All redemptions start at 5,000 miles, so don’t use this for charges under $50.

According to UA’s terms, as long as you have a credit card that earns UA miles through card spending, you can use this new redemption option.

One important thing to note: only miles generated from the credit card can be used for reimbursement, such as welcome bonuses, miles earned from spending, promotional miles from card spending, annual renewal miles, etc. Miles earned from flying or from third-party services (such as UA Portal, surveys, etc.) that are not generated by the credit card cannot be used for reimbursement or offsets.

Offsetting Annual Fees

When offsetting an annual fee, the miles are worth 1.5c/p. For example, a $50 annual fee requires 3,333 miles, while a $150 annual fee requires 10,000 UA miles. The annual fee charge must have posted to your account within the past 90 days to be eligible. When redeeming, you need to select the date the annual fee posted, and the system will calculate how many miles are needed. Personally, I think 1.5c/p is quite solid, especially since UA is moving fully to dynamic award pricing, and in the future you may not be able to get 1.5c/p+ in value from your miles.

Offsetting UA Flights

In addition, UA miles can now also be used to reimburse UA flight purchases. You can only redeem against ticket purchases made within the past 90 days, and the redemption value is 1c/p, meaning a $100 ticket requires 10,000 UA miles.

Note that you need to specify which transaction you are redeeming against and enter its number. You can find the specific number in Chase’s transaction detail.

Each transaction can only be redeemed once!

Miles Returned

If your redemption is declined, the miles will be returned to you. If the ticket you redeemed against is canceled and refunded, your redeemed miles will also be returned, but there is a 2,500-mile fee deducted. Be careful.

My Take

I’m glad UA miles finally have a floor value use case. In the future, if airfare is cheap and you want to use up some miles, you can buy the ticket with cash first and then redeem against it, which guarantees that your UA miles are worth at least 1c/p.

From a credit card perspective, if you keep the UA Explorer card long term, then also holding a UA Business card can get you a 5,000-mile annual bonus. That offsets $75 of the annual fee, making the UA Business card’s annual fee effectively just $24. You can also enjoy the benefits of these two UA business cards:

  • 2 UA club passes each year (worth $100)
  • An extra $100 after buying 7 UA tickets each year

Also, if you previously built up a lot of miles from UA card welcome bonuses and haven’t been able to use them well, you can choose to downgrade to the Chase UA No Annual Fee version and then use UA miles to reimburse future ticket purchases.