Chase has launched a new attempt at a United Airlines $0-annual-fee credit card, the United Gateway℠ Card.
The new offering will replace the United℠ TravelBank Card, a no-fee card that was grounded not so long after takeoff when Chase closed it to new applications after just three years.
A main difference between the cards is the rewards currency. The new card will earn regular United MileagePlus frequent-flyer miles. The United℠ TravelBank Card earned a new currency called “TravelBank Cash” that could be used to buy United airfare. It was like earning store credit at a retailer.
The new United Gateway℠ Card also has a different structure for how cardholders will earn rewards for spending, including a few spending categories below 30,000 feet. For example, spending on gas and commuting earns more than the usual 1 mile per $1 spent — spending on groceries does, too, for a limited time.
Details on the new United Gateway℠ Card
Sign-up bonus when launched: New cardmembers can earn 20,000 bonus miles after spending $1,000 on purchases in the first 3 months of account opening. The current sign-up bonus is: Earn 20,000 bonus miles after you spend $1,000 on purchases in the first 3 months your account is open. NerdWallet values United miles at 1 cent each, making that bonus worth about $200.
Rewards: Earn 2 miles per $1 spent on United Airlines purchases, at gas stations, and on local transit and commuting. Earn 1 mile per $1 spent on all other purchases.
Limited-time rewards: Earn 3 miles per $1 spent at grocery stores, on up to $1,500 per month through Sept. 30, 2021.
Discount: Earn 25% back on United in-flight purchases.
Foreign transaction fee: None.
What this means for existing customers
United℠ TravelBank Card cardholders
Chase says current United℠ TravelBank Card cardholders moved to the new United Gateway℠ Card on Sept. 21, 2020, and will have a new card sent to them by Oct. 31. Their card expiration date and security code will change, but account numbers, credit lines, interest rates and payment-due dates will all stay the same.
Customers will still have access to their TravelBank account to redeem TravelBank Cash. TravelBank terms and conditions, including those related to expiring rewards, will still apply. However, all purchases made on the card as of Sept. 21 will earn miles instead of TravelBank Cash.
United MileagePlus cardholders
The old “legacy” United MileagePlus cardmembers transitioned to the United Gateway℠ Card on Sept. 13, 2020. Their account numbers, credit lines, interest rates and payment-due dates stayed the same, Chase said.
Nerd tip: The United℠ Explorer Card is a separate product and holders of that card are not affected.
Is it a good deal?
Overall, yes, the United Gateway℠ Card is superior to the outgoing United℠ TravelBank Card, and here's why:
The switch in rewards currencies from TravelBank dollars to MileagePlus miles is a good one. NerdWallet didn’t see the point of the United℠ TravelBank Card because it was inferior to many cash-back cards where the rewards currency is the most useful: cash.
Frequent-flyer miles at least give you the opportunity to earn outsized value by finding a pricey airfare or seat upgrade that doesn’t cost too many miles — first class, anyone? And United miles can be spent with travel partners, such as hotels and car rental agencies.
Better reward rates
It also helps that the new United Gateway℠ Card adds a lucrative bonus category for pandemic times: For a limited time, you can earn 3 miles per $1 spent at grocery stores, with a generous cap of $1,500 per month. You’d have to have a huge household to reach that cap.
Double points on gas stations and on local transit and commuting is also a welcome change. (The United℠ TravelBank Card offered 1.5% in TravelBank cash per $1 spent on all purchases except United tickets, which earned 2%.)
Bottom line: The United℠ TravelBank Card wasn’t a bad card for leisure flyers, but the United Gateway℠ Card ticks an important box for an airline card: being aspirational.
What you don’t get in a no-fee card
Neither the old nor the new no-fee United card includes key perks of higher-tier United cards with annual fees. For example, the United℠ Explorer Card has an annual fee of $0 intro for the first year, then $95. It offers such perks as:
Free checked bags.
Two one-day passes annually to United Club airport lounges.
To be fair, all major U.S. airline credit cards that lack an annual fee also lack free checked bags and priority boarding. (Southwest Airlines doesn’t have a no-fee card and offers two free checked bags to all passengers.)
Of course, that hints at a likely business goal for the new United Gateway℠ Card: Make it a “gateway” to a higher-end United credit card.