Doing the Math on Keeping the United Plus Explorer Card

Discussion in 'Other Credit Card Programs' started by Ed Chandler, Jan 3, 2014.  |  Print Topic

  1. Ed Chandler
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    Ed Chandler Silver Member

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    Hey, all,

    The annual fee just posted to my Chase United Mileage Plus Explorer MasterCard (not VISA, see below) this week and it’s time to decide what to do about it. I figured I’d post my thoughts here so the “wisdom of the cloud” can affirm where I’m right, correct me where I’m wrong, and offer insights that hadn’t occurred to me yet. Many decision points depend on knowing what other cards I hold, and I’ll make that clear when it matters.

    This card is a conversion from an old Continental card. I don’t know if they issue the United MP Explorer as a MasterCard, normally. (One Chase rep insisted that a MasterCard version didn’t exist. “Buddy,” I said, “I’m holding it in my hand while I’m talking to you.”) So far as I can tell, the only benefit I get from this being a MasterCard is that the annual fee is $10 less – it’s $85. Any other benefit based solely on its being a MasterCard is negated by having other MasterCards in my “stable.”

    Oh, and before we even start, all of this assumes that I’m not given a reasonably valuable retention offer when I call. If they lower the cost, or sweeten the pot, then all bets are off.

    Should I Cancel?
    This one is tricky …

    In addition to saving the annual fee, cancelling any card “resets the clock” with regard to applying for it again to earn another signup bonus. Furthermore, it’s one fewer card with that issuer which may help when it comes time to apply for any other card issued by the same bank. Some folks say you should only cancel as a bargaining chip while applying for another card. Either way, obviously, I’ll want to move the credit line to another Chase card.

    Analysis: I don’ t think “resetting the clock” is a consideration because I don’t think the MasterCard version of this card is available anymore and the VISA version is considered a different product for purposes of getting a signup bonus. (I can’t cite a source, but I recall that this was confirmed right after the Continental card converted.)

    Should I Convert?
    I know I can “downgrade” this card to a no-annual-fee United card that earns .5x (1 UA mile per $2 spent) and has no additional benefits. I’ve also read that people have been successful converting the card to a Freedom card, even if they already have a Freedom card. Since the $2,500 quarterly bonused spending cap is per card, that would let me double-up on those 5x opportunities, but the wife already has a Freedom card and I really doubt we’d be able to “triple up” our spending in those categories.

    Analysis: I place no dollar value on a conversion. Do you?

    Should I Keep It?
    Since we’re talking about money, the better question is, “What value do I get from keeping it?” Let’s look at the benefits:

    Spending/Miles
    The card earns 2x UA miles on all UA purchases, 1x on all other purchases, and gives a 10,000-point bonus if you spend $25,000 per year.

    Analysis: Buckle up – it’s math time.

    If you hold an AMEX Gold card (which I do) you’d probably rather put your UA spend there for 3x MR than on this card for 2x UA. Furthermore, if you’re spending a fortune on UA tickets, then you should probably have the United Club VISA instead of the Explorer anyway.

    Even if I didn’t have an AMEX Gold card, I’d rather have 2.14x UA points with a Sapphire Preferred card than 2 UA points with the Explorer. Failing even that, there’s always the Barclay Arrival MasterCard. Don’t get me wrong, 2x UA with the Explorer card is usually worth more than the 2.22 cents in travel reimbursement from the Arrival card, but if you put all of your travel expenses on co-branded cards, or the Sapphire Preferred, you’ll have nothing to redeem those Arrival points against, will you? (I plan to address the Sapphire Preferred vs. Barclay Arrival in a later post when I get the time.)

    Bottom line, there are almost always better places to put your UA spend, so I’m going to eliminate that from the decision-making process.

    If you look only at “un-bonused” spending, the best value you can get from this card comes when you spend exactly $25,000 on it. Doing so takes your yield from 1x to 1.4x, but every additional dollar spent on the card begins to lower that yield again. (For very high spenders, the 1.5x from the United Club VISA becomes a better value, but that’s a story for another post.)

    We all know that you can convert Chase Ultimate Rewards points to UA miles at 1:1 if you have a Chase Sapphire Preferred, Ink Bold, or Ink Plus card (and if you don’t have at least one of those cards, you’re probably reading the wrong forum). My Chase Freedom card gives me 1.1x UR points all day long (with a linked checking account), not counting any bonuses from quarterly rotating 5x categories.

    So, at its widest, the earning gap between the UA Explorer Card and the Freedom card is only .3x (three-tenths of a point per dollar). Any Freedom spending in 5x categories will narrow that margin farther. Then consider that a UR point is worth more than a UA mile because of its flexibility. Is it worth 30% more? For me, probably not, since I’m probably going to redeem them on United anyway, but it’s worth something.

    In real terms, spending $25,000 on your Freedom card will earn you 27,500 UR points. Spending the same amount on the Explorer card will earn you 35,000 UA miles and cost you $85, minus whatever value you assign to the other benefits of the card. If, for the sake of argument, you assign them no value, then you’re essentially buying 7,500 UA miles for $85 ($95 for the VISA version). That works out to 1.13 cents per UA mile (or 1.26 cents with the VISA). I think most of us can generate UR points cheaper than that.

    Priority Boarding
    This card gives “priority boarding.”

    Analysis: See here: http://screen.yahoo.com/airport-090000094.html Enough said.

    Primary Car Rental Insurance
    This card gives primary car rental insurance, so it “kicks in” before your personal auto insurance does.

    Analysis: Primary is better than secondary, sure, but there are limits to what is covered and what isn’t. Personally, I don’t use it. I always get the AMEX “premium” car rental insurance for $25 per rental.

    United Club Lounge Passes
    This card comes with 2 United Club passes per year. They’re single-person, single-entry passes – no guests, etc.

    Analysis: You can buy these for $50 at the door, if you like, but they’re only worth that if you’re going to use them. With lounges getting overcrowded and cheapening their liquor, I may be better off just hanging out at a bar in the main terminal. Since these things are selling for about $15 on eBay, that's clearly the most they're worth.

    Free Bags
    You get one free checked bag on domestic United flights, for the cardholder and up to one other person on the same reservation, if you bought the ticket with this card.

    Analysis: As I said above, I’d generally rather get 3x MR buying my airfare with an AMEX Gold than 2x UA buying it with this card. I also don’t check bags, so the benefit here would be limited to my wife’s checked bag only.

    This one is the deal-maker. Even if it only kicks in once, a single round-trip with a free checked bag that would otherwise have cost $50 (each way) makes keeping the card a no-brainer.

    Well, that’s it. I’m sure the conclusion is perfectly obvious to some of you. I’m equally sure that there will be people on both sides of the matter. I’m seriously on the fence with this one. What do you think?
     
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  2. MX

    MX Gold Member

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    If you're not sure, cancel it.
     
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  3. Muerl
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    Muerl Gold Member

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    I think I have to agree.

    Or downgrade. I think thats what we will do with my wife's card


    Does this stick around for tickets purchased in before canceling?​
     
    MX likes this.
  4. Wandering Aramean
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    Wandering Aramean Gold Member

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    Only if the UA flight was also less expensive than other options which include the bag (either by fee or as part of your ticket) and you need to check a bag. Otherwise it is a worthless benefit.
     
    MX likes this.
  5. Ed Chandler
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    Ed Chandler Silver Member

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    I don't understand the question.
     
  6. Ed Chandler
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    Ed Chandler Silver Member

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    Good point. Since we're talking about domestic fares anyway, a low-cost WN fare that includes bags would be a good alternative.

    However, in the case of award tickets, I've found that the benefit kicks in if all you pay is the taxes and fees with the card (as that's all there is to pay).
     
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  7. Espan

    Espan Silver Member

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    This is true, and the main reason I keep the card, as I convert UR points into United Miles....
     
  8. Counsellor
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    Counsellor Gold Member

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    I think the question is whether the benefit remains attached to the ticket purchased with the card if you subsequently cancel (or fail to renew) the card.

    My understanding is that it's not supposed to -- that you have to still have the card in good standing at the time of the flight -- but it's possible they don't check closely (or ask to see the card) when you check in.
     
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  9. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I had always heard that credit card companies don't convert cards from one brand to another (other than the AF-United-Visa to the NAF-United Visa you mentioned). Think I will have a chance getting my United Club Visa converted into a Freedom card?
     
  10. Muerl
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    Muerl Gold Member

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    I can not speak from experience about Chase.

    Citi converted an AA Amex to a TY MC on a downgrade for me once.
     
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  11. Dangjr213

    Dangjr213 Gold Member

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    Are you sure you need to pay with the united card (for the free checked bag)? I booked a flight through UR travel and paid with my sapphire card and was given a free checked bag

    For what it's worth, I just cancelled mine yesterday. Wasn't offered anything for retention
     
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  12. Wandering Aramean
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    Wandering Aramean Gold Member

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    As written the rules require it. Reality is much less clear.
     
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  13. bmg42000
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    bmg42000 Gold Member

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    I tried to convert a United Card to the Chase Sapphire preferred but they would not let me (they said they cannot convert affiliate cards to a UC card). So got the Chase Sapphire and then moved the credit line over to Sapphire Card and then closed it. I will figure out what to do with my Mileage Plus club card in the fall (I think the united club membership is a waste of money with the downgrades in it).
     
  14. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Yes, I definitely won't pay for the UC card again. Chase basically has a few choices:

    - waive or significantly reduce the AF (I'd be willing to pay $100)
    - convert the card into a fee-free card (Freedom)
    - see me cancel the card

    Still some months to go until that call... I suspect they'll hear from a lot of Club Card holders this year.
     
  15. bmg42000
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    bmg42000 Gold Member

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    I will pay 200$ for the card without the UC membership. I do like the priority security line benefits.
     
  16. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    My $100 would be what I consider a fair price for the UC access. I don't drink their swill, and I don't use their agents' time, so it's really just for coffee, some crackers and cheese and packaged carrots on maybe ten occasions this year.

    I get Pre-check and priority access as a 1K MM, so the other benefits of the card aren't really worth much to me (Avis status was downgraded last year, award travel upgrade never worked for me).
     
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  17. Wandering Aramean
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    Wandering Aramean Gold Member

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    :eek:

    I'd pay for Global Entry at half that price before I'd pay $200 for Priority Access to security. You can buy Premier Access one-off for a decent rate if it really is important.
     
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  18. bmg42000
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    bmg42000 Gold Member

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    Doing only domestic travels with an impatient child changes my priorities as compared to yours . Less headaches is my goal.:) I will need to do an analysis to see if paying 30$ a trip (for 3 people only from EWR) is worth the cost of the card. I suspect pay as I go is the way to do it instead of overpaying for these benefits.
     
  19. Muerl
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    Muerl Gold Member

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    I called today, They offered me two downgrade options.

    1. "Premier Rewards" with an annual fee of $60 and Priority Boarding with 1 mile / $ and a FX fee
    2. "Regular Rewards" with no annual fee and 1 mile /$2

    I choose the latter.
     
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  20. bmg42000
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    bmg42000 Gold Member

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    Will they let you keep the same card number?
     
  21. Ed Chandler
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    Ed Chandler Silver Member

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    Interesting retention call -- easiest ever.
    They offered me a $100 statement credit. I was waiting for the, "... if you spend blah, blah, blah ..." but it never came. Tough to argue with that.
    I guess dropping $25k+ on the card last year probably didn't hurt my case.
     

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