Chase’s United MileagePlus Cards Raise Fees, Add Tailored Value to Perks and Benefits

United Airlines announced on Monday that it is revamping its lineup of United Airlines co-branded Chase credit cards and raising annual fees across the board on the popular card series and airport lounge membership. 

Chase’s new United family of cards provide MileagePlus members with tailored benefits for their specific style of travel, according to the launch announcement. The company said customer feedback helped develop the features for the revamped cards.

“Credit card signups have long been a big business, but coming out of the pandemic it’s become a massive one. For many airlines, points and miles are responsible for the entirety of their quarterly profits,” said Scott Keyes, Going founder and chief flight expert.

The increasing importance of travel credit cards — combined with increased competition — is why many banks have recently bumped up annual fees, he said. Banks make money from airline cards in a few different ways: interest fees, interchange fees, and annual fees. 

“In this case, by increasing the annual fee and offering big spending incentives like $100 travel credit for spending $10,000 in a year, the bank is aiming to generate more revenue from customers,” said Keyes.

The company also rolled out limited-time welcome bonus offers to offset the annual fee increases and incentivize more United flyers to sign up for the co-branded cards.

New card benefits include credits for airline and rideshare spending, and Instacart+ purchases made with the Chase-backed credit cards. And every dollar spent with United’s co-branded cards on economy and preferred seating on United flights earns points toward gaining elite status.

“I think the benefits are varied enough that most people will find enough added value in the card or cards that they have to rationalize the additional fee,” said Dave Grossman, a credit card industry expert and founder of Your Best Credit Cards. 

“I’m reminded of American Express raising the annual fee on their popular Gold Card from $250 to $325, which stung. But then I realized I was going to get an easy $172 in extra credits, and the sting subsided quickly,” he said.

United is not the only company raising the bar for earning rewards. As the number of top-tier fliers grows, it’s harder for members of loyalty programs to reap the benefits of being a cardholder.

In 2023, Delta Air Lines raised the spending thresholds and adopted a model tying card status to how much cardholders spend through the SkyMiles program, whether it’s on travel with Delta and its partners or hotel, rental cars and vacation spending through Delta or its co-branded credit cards.

The company made some adjustments a month later following a barrage of cardholder objections. 

Another factor likely driving the fee adjustment is that annual fees have not increased recently despite post-COVID inflation rates of more than 9% — the highest in 20 years.   

“In a sense, card companies are making less revenue in present-day dollars compared to a few years ago since the dollar is worth that much less but they were charging the same annual fee.” — Dave Grossman, Founder of Your Best Credit Cards

January U.S. travel activity remained positive year over year but has slowed as travelers hold off on travel plans. February airplane ticket sales through travel agencies dipped slightly compared with year-ago figures. 

Loyalty-card partnerships between airlines and credit card companies help airlines earn revenue whether cardholders buy plane tickets or spend on everyday things like food and streaming services. 

And banks have gotten increasingly sophisticated in targeting specific customers with narrowly targeted cards, said Keyes. A decade ago, there may have been just a handful of cards in a bank’s portfolio. 

“Today there are dozens — more business cards, more airline-hub-targeted cards, more high-spender cards, etc.,” Keyes said. “It’s been an extraordinarily lucrative move by banks to grow their credit card division, but higher costs still have to be recouped.” 

Airline companies have consistently increased fees for checked bags and seat assignments and are getting more of their revenue and profits from financial instruments like co-branded credit cards and loans.

Annual fees are predictable revenue for credit card companies and their co-branded partners, said Grossman. 

“You know your cardholder base, your acquisition rate, your churn, and your annual fee,” he said. “You can rely on that.” 

The new annual fees will increase to $150 (from $95) for the base card, the United Explorer Card, which is free for the first year; and to $695 for its two top-tier cards, the United Club Business and the United Club cards (increasing from $495 and $525, respectively). 

“It’s a big deal to change the annual fee on a credit card. So, they tend to happen much less often but in much larger percentages,” Grossman said.  

New card benefits become effective immediately, but the new annual fees don’t kick in until renewal periods arrive beginning Aug. 1, 2025. The new annual fee for United Explorer cardholders doesn’t kick in until renewal periods on or after Jan. 1, 2026.  

A new advertising campaign featuring Emmy Award-winning actor Ty Burrell begins April 1.