United Airlines MileagePlus Update: Lower rewards for non-cardholders

no United Airlines credit card? Soon you will earn fewer miles than other travelers.

United is overhauling its MileagePlus frequent flyer program to reward travelers with more miles and lower redemption rates, including some long-haul business class seats — if they have one of the airline’s credit cards. It’s the latest move by the airline to reward its highest-spending customers.

The changes represent the biggest change to the lucrative program in more than a decade, when United began rewarding customers for how much they spent — not just how far they traveled.

Andrew Nocella, United’s chief commercial officer, told CNBC in an interview that the airline has been working on the changes for about 18 months and that the carrier aims to reward its most loyal customers.

The shift also comes as United tries to stand out in a more competitive landscape for travel and rewards credit cards. This also includes space American Express platinum, Capital OneProject X and Chase Sapphire reserve cards.

“In the credit card space in general, a lot has changed over the last five to 10 years in terms of how many travel credit cards are out there,” Nocella said. “What I’m thinking about as we make these changes for United is making sure that if you carry a credit card, you put it at the top of your wallet, and then if you don’t carry a credit card, there’s a reason to get the credit card that seems incredibly compelling if you want to fly with United Airlines and if you want to get that … flight to Tahiti or to Rome or wherever we might be able to take you.”

The changes take effect on April 2. United plans to show the discounted reward flights on its website “so customers can see how much having a United Card can save them while they travel,” the airline said.

The update to United’s loyalty program is part of a trend among airlines to reward frequent flyer members based on how much they spend. About a decade ago, major airlines modified their loyalty programs to reward customers for the dollars they spent on miles flown.

Airlines also encourage customers to sign up for their credit cards by offering perks such as no fees for checked bags and early boarding.

Basic United MileagePlus cardholders will earn more miles per dollar spent on United flights than non-cardholders, and at higher prices than they currently do. Their profits also go up when they actually use that card to buy the ticket.

Meanwhile, customers who do not have the card will earn less than they do today.

For example, a traveler without a co-branded United Airlines credit card will earn three miles per dollar spent on a ticket, which is down from the current five miles. Under the new structure, the cardholder can earn six miles and more if he uses the card to make purchases. Those with MileagePlus elite status earn miles at a higher rate, too.

United said United debit cardholders will also earn more miles once they spend $10,000.

United will now also allow customers with one of its credit cards to redeem their miles for flights at a minimum of 10% discount compared to those without the card.

For example, an economy class award ticket with 15,000 miles would go for 13,500 without premium elite status, the carrier said. United said it has set aside a special discounted inventory of award tickets for cardholders, including Polaris first-class seats.

Those with MileagePlus Premier elite status will receive greater discounts and better mileage redemption. Elite cardholders receive a minimum 15% discount on miles tickets.

A long-haul Polaris business class cabin seat with 200,000 miles will be worth 170,000 miles if the cardmember has premium elite status, United said. United added that Polaris’ lower-priced “Award Savings” seats will be available to MileagePlus members with a United card, seats that were previously only available to high-level elites.

Their earning rates also increase if they have a credit card and status. MileagePlus 1K, the highest level before global services, will earn 17 miles per dollar spent when using their United Club credit card.

United Airlines passengers without a credit card will not earn miles for Basic Economy tickets. American Airlines It similarly said last year that it would no longer allow passengers in that class to earn miles, following a previous move Delta Airlines. However, there is an exemption for United’s elite tier holders, who can still earn miles in basic economy.

Business travelers are often required to book using company credit cards under the company’s travel policies. But United said individuals who personally hold a United credit or debit card will still earn more miles than an employee who doesn’t.