United MileagePlus Explorer Card
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| United Airlines Explorer Credit Card Image Source: Dr. Penny Pincher |
The United Mileage Plus Explorer Credit Card is a credit card that provides 30,000 bonus miles when you charge $1000 during the first 3 months. Additional miles are awarded as you continue to make purchases with the United credit card.
The $95 annual fee is waived the first year. The credit card is a Visa credit card from Chase (JP Morgan Chase bank).
When I got my card about a year ago, there was a special offer that allowed me to get 30,000 miles by making a single purchase after receiving the United credit card. How far can you go for 30,000 miles? This is about enough for a single domestic flight on United.
United MileagePlus Explorer Card: 30,000 Free Miles and an Annual Fee
I was easily able to obtain the 30,000 bonus miles as promised after getting my United Explorer credit card. After reading the fine print, I realized that:- There is a $95 annual fee every year, except the first year
- Upon closure of the cardmember’s MileagePlus Explorer Credit Card account, all benefits will be canceled.
One strategy to deal with the annual fee would be to use your miles in the first year, then cancel the credit card before the first $95 annual fee is applied to your account.
However, I did not need to fly during the first year and I want to have some miles available in case I wanted to fly somewhere. Paying $95 per year to keep miles that I may or may not use did not make sense. How can I keep my miles, but avoid paying the annual fee?
My initial understanding was that item 2 from the fine print above meant that if you cancel your card, you'll lose your miles. After further review, I realized that the "benefits" are separate from the bonus miles. So one way to avoid the annual fee is to simply cancel the card before you get billed for the 2nd year annual fee whether you have used your miles or not. Apparently you get to keep your points even after you cancel the card!
How to Avoid the Paying the United MileagePlus Annual Fee
There are reasons you may not want to cancel the United credit card, though. If you have a balance and do not want to move it, or if you want to keep the card to earn more miles in the future, it may be worth keeping. Also, canceling a credit card with a big limit can reduce your credit score under some circumstances. So how can you avoid paying the $95 annual fee and keep your United credit card?I called Chase to request that the annual fee be waived this year. I figured it was worth a try. The response was that they do not waive annual fees on mileage credit cards. However....
They informed me that I could apply some of my miles to pay the annual fee. I had about 30,000 miles on the card. It takes about 12,000 miles to cover the $95 annual fee. This would allow me to keep 18,000 miles after paying the annual fee by redeeming miles. I prefer this approach over canceling the card because:
- I can keep most of my miles
- I avoid the impact on my credit rating on canceling a credit card with a large credit limit
The person on the phone set me up with a PIN that I can use at united.com/chase to apply my mileage points to cover the annual fee. Navigate to the points redemption page- there are standard options on the website for using miles to pay your annual fee. You can wait until the annual fee shows up on your billing statement and then go to the website to redeem miles to pay it.
Using points to cover the annual fee makes much more sense for me than paying the $95 annual fee with cash. This will allow me to keep 18,000 miles I have remaining and perhaps even accumulate more miles if I keep using the MileagePlus credit card.
Penny Pinching Tips:
- You can essentially get a free flight using bonus miles from a United MileagePlus Explorer Credit Card
- Watch out for the annual fee: Either cancel your card before the annual fee hits your account at the end of the second year, or use about 12,000 of your miles to pay the annual fee instead of paying cash if you want to keep your card
- It might be worth paying $95 in cash instead of miles if you want to keep your United Explorer Card and you are very likely to use your miles- 30,000 bonus miles gets you a free trip, 18,000 miles may not get you anywhere...
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You've been misinformed. You don't lose your miles if you do not renew the card. You lose the other benefits associated w/ the card, but the miles are yours to keep.
ReplyDeleteMoreover, I think your strategy was not a great choice. The reason? 30k miles has a value to you: Enough, as you mentioned, for a round trip domestic flight. 18k miles are essentially worthless without spending another $7k, or flying a couple times on your own dime, to accumulate the 25k miles necessary for a Saver award.
Shane,
ReplyDeleteThank you for your comment. The statement in the fine print from the credit card company that made me think I would lose my miles if I cancel the card read something like this:
"Benefits are available as long as cardmember’s MileagePlus Explorer Credit Card account is open and not in default. Upon closure of the cardmember’s MileagePlus Explorer Credit Card account, all benefits will be canceled."
I assumed the miles were one of the "benefits" that would be cancelled upon closure of the account. After reading this again carefully, I agree with you that the miles award is separate from the "benefits" and that you should be able to cancel the card and keep your miles.
I plan to update this article to advise cancelling the card to avoid the annual fee and keep your miles. However, if you have a balance you don't want to move or if you want to keep the card active for some reason, using points to pay the annual fee may be a valid strategy. In my case, I am pretty unlikely to use the miles anyway, so I valued the 11,000 points less than $95 in cash.
Thanks again for pointing this out!