Ladies and Gentlemen, it’s valuation season and we’re back with another one, churned fresh out of Excel. Now, this is a story all about how United got flipped-turned upside down. And I’d like to take a minute just sit right there I’ll tell you how they became the prince of the space we call air. Well, least as it strictly pertains to how much their award currency is worth.
Since March, their value has increased by 6.2% to 1.61¢ each. This is in stark contrast to the 7.8% decline in the value of Delta Skymiles I talked about just a couple days ago. At the time, I was a little worried that the decline was seasonal. But after crunching United, some of that fear is alleviated.
So where is this value coming from? Well, it’s largely from their international offerings. And the number prove it. In fact, the un-discounted average of international redemption values was a whopping, and double-check worthy 3.28¢ each. That’s just phenomenal. Considering credit cards like the Chase Freedom can earn 5 ultimate rewards per dollar spent when combined with a Sapphire card, you’re potentially looking at a 16% return on spend if transferred to United.
But it get’s even better. Looking at our absolute best hypothetical redemption for the month, and we see a chubb-inducing 9.34¢ per United Mileageplus miles. This unicorn was for a first-class flight between Dallas and Hong Kong offered for 95,000 miles plus $80.60 in fees. The lowest-cost cash alternative was $8,954. Just thinking stratospherically for a second, if one was to hold out for redemptions like this, pair them with 3-5x bonus spend categories and we’re envisioning near 30% returns on spend. Just phenomenal. Though this kind of redemption is what points and miles dreams are made of, they’re certainly not the norm. That said, we did see 31.25% of our test city-pairs come back with award redemptions exceeding 3¢ per point. That makes 10-15% returns totally obtainable.
Back on the domestic side, and United Mileagplus is only showing us an average of 1.07¢ per mile. Not awful, but not anything to really get excited about either. Those using United miles in the US should seriously consider the Chase Mileageplus Explorer card. One massive, yet often overlooked, benefit of this card is the increased saver award availability. It’s the only reason I continue to pay the annual $95 fee, despite never actually running any spend through the card.
These types of analysis are why I think redemption-side valuations are so important. It’s so often that I hear people talk about how many points they earn, with no basis for describing what they’re worth, other than the fact they have 50,000 magical points.