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United Airlines has increased the fees for its credit cards and airport lounge memberships by up to $170 annually—but has pledged to offer ‘enhanced benefits’ in return.
On Monday, the airline unveiled these modifications along with fresh perks for their Chase-supported credit card holders, featuring welcome bonuses, credits for ride-sharing services, and reductions on reward flight prices.
“Yes, there have been some fee hikes, but we made sure to carefully consider that the added value and benefits provided should significantly surpass any rise in the card costs,” stated Richard Nunn, who leads United’s MileagePlus loyalty program.
Airlines have progressively raised their fees for services such as checking luggage and selecting seats, while they now promote co-branded credit cards as a means to access perks that previously came with the price of a ticket.
The annual fee for the Entry Level Explore Card increases from $95 to $150, the QuestCard’s fee goes up from $250 to $350, and the Club Card jumps from $525 to $695. United has the biggest passenger network globally.
“Thanks, time to discard this,” a customer with an Explore card commented on a Reddit discussion regarding the price increase.
United states that these increased expenses include additional benefits such as credits for airlines and rideshares, Instacart+ subscriptions, and rewards for booking hotels. They also assert that achieving elite status through spending on specific credit cards has become more accessible for passengers.
Travelers who do not hold the United Club credit card are facing significant increases in lounge membership fees. Individual memberships currently stand at $750 yearly, an increase from last year’s rate of $650. Meanwhile, family memberships, providing entry for both the member and up to two accompanying guests, have escalated to $1,400 each year.
United states that the rise is intended to match their rivals and assist in alleviating congestion following the carrier’s significant investment in enhancing and enlarging its lounges.
Earlier, a membership including two guest passes was priced at $650 annually; however, elite frequent flyers were offered discounted rates. Current members will retain their present privileges until their memberships expire.
The increases in fees coincide with a slowdown in travel demand. According to data from the Airlines Reporting Corp., airline bookings via travel agents fell by 3.5% in February, reflecting a decrease in both the number of passenger trips and the average fare prices.
However, United Airlines’ CEO Scott Kirby continues to remain hopeful. According to an internal communication sent recently, he recognized a deceleration in reservations yet stated that the carrier will persist with its expansion strategies.
Nunn mentioned that United has seen an increase of around 17 million MileagePlus members in the last couple of years, and the airline aims to attract even more cardholders with these additional benefits.
Airlines have seen loyalty programs, often linked with credit cards, turn into significant income sources. Last year, United stated their ‘other’ revenue reached $3.49 billion—a rise of 10% compared to 2022—primarily driven by expenses related to co-branded credit cards, collaborations outside the airline industry, and access fees for lounges.
Existing cardholders will gain access to additional benefits right away; however, increased charges won’t come into effect until sometime in the future.
Immediately upon receiving their new cards, holders will notice increased fees.
Instead of raising their prices, other credit card companies have been reducing airline benefits.
For instance, a contentious recent policy has been introduced by
Delta has implemented new regulations that limit entry into their lounges.
took effect on February 1.
Individuals with access to Delta’s 52 lounges through certain premium American Express card tiers will have their visits capped at ten or 15 times per year.
Up until this year, there was no restriction on the number of visits. For Delta Reserve cardholders, the limit is now set at 15 visits, with each visit costing $50. Similarly, Amex Platinum customers have a cap of 10 visits, also priced at $50 per visit.
However, the restrictions could be more stringent. They were initially unveiled in September 2023.
The maximum cap was only six visits per year.
.
In the meantime, a recent study revealed the following about the
The worth of credit card rewards points has been slowly decreasing over time.
– as
inflation
has taken hold.
A loyalty point has typically been equivalent to about one cent when utilized to offset other buys.
However, since 2018, the purchasing power of one cent has decreased by approximately 20 percent, as reported by the Bureau of Labor Statistics.
This indicates that a point has similarly decreased in value by roughly the same extent, as stated.
The Wall Street Journal
.
If you accumulated 50,000 points with a major credit card company in 2020 and haven’t used them yet, their current value is approximately 41,300.
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