Credit Material is a public blog full of information regarding Credit, Debt, Loans & Financial Topics.I am no fan of United Airlines. There service stinks, their Mileage Plus program deceptively blocks you from using partner awards, and dealing with them is often infuriating, even by airline standards.
It is largely for those reasons that I do not recommend any United Airlines Mileage Plus credit cards. Unfortunately, some people, like me, have a few miles left. Even if I was able to find an award ticket on United, I really would prefer not to subject myself to them ever again. Now, there is a new way to dispose of United Mileage Plus miles without flying United Airlines. You don’t even have to try to book one of their blocked airline “partner awards”, the ones that can only be booked over the phone.
Now you book rental car and hotel awards with your remaining Mileage Plus Miles. Over at the Upgrade Travel Better blog they ask the question if these awards are really worth it. Of course they are not worth accumulating miles towards these awards with your credit card. Anyone who knows anything about Mileage Plus could have told you that. He does the legwork and determines that you might get a mere .75 cents per mile from the hotel awards, far below what you would expect from any cash back card.
How About Rental Car Rewards?
I plan on using some of my left over miles for a rental car award, a mere 10,000 miles. Think about that for a second. Suppose I actually flew 10,000 miles on United, (an intolerable fate I will try not to imagine.) Surely such tickets would have cost a few thousand dollars. For that, I can redeem a compact rental car worth maybe $30-$50. Had I actually spent 10,000 dollars on a United Airlines Chase card, I would be getting a pitiful .3 -.5 cents per mile in value . If I had used a 2% cash back card, I would have had an easy $200 cash, good for a week’s car rental. Worse, these rental car awards are not changeable or cancelable, unlike most rental car reservations.
The clear use for this new program is so that you can use all of your orphaned United miles and never have to deal with them again. And with United, that may be their best reward.
New Rules
I love Bill Maher’s Real Time program, especially the “New Rules” commentary at the end. New credit card rules from the fed are not as entertaining, but they are useful. The Washington Post writes today that the Federal Reserve is working to draft new rules on credit cards as required by the CARD act. The new rules include no rate hikes in the first year of your credit card. This is a great thing, as what is the point of comparing interest rates if they can change at any time for no reason. Another new rule will force card issuers to get your consent before charging a fee for going over your limit. This is another no-brainer type of rule banning one of the classic tricks and traps of the trade.
Really this is just the implementation of the CARD Act, and it is not unexpected. Nevertheless, it is satisfying to see this actually happening in the same way in feels good to watch a long anticipated construction project rise from a job site. For a long time, we were told “Change” was coming. Now it is here.
On Tuesday rules have been proposed by the Federal Reserve to end banks’ ability to apply credit card payments to balances having lowest interest rates first, implementing legislation Congress passed in May.
The Fed also proposed that before charging fees for transactions that exceed credit limits creditors obtain consumers’ consent. The Fed said in a statement that restrictions on lending to people under the age of 21 and subprime credit card fees were also included.
In the first year after an account is opened, the Fed’s proposal would generally prohibit rate increases on fixed-rate accounts as well as increases on existing credit card balances. Cards could not be issued for consumers under the age of 21, unless the borrower could show an ability to repay the debt or an older person agreed to back the account.
According to a description of the rules in the Federal Register, during the first year after the account is opened fees on subprime credit cards, those issued to consumers with lower credit scores, would be capped at 25 percent of the account’s credit limit.
