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Is United’s Visa Prepaid Card Worth It?

If you’ve seen ads on Instagram recently from United for their MileagePlus GO Visa Prepaid Card, you’re not alone. I too have seen these ads and it led me to investigate this product further. Released back in the summer of 2017 this product aims to fill two gaps in the marketplace. First, since this is a prepaid card not a credit card, no credit check is required to sign up. Meaning that if you’re not yet at a point where you can safely sign up for a United credit card, this might be an option for you. Second, in cases where you cannot use a credit card to make purchases, you can use this card and still earn miles.

Earning Miles

The number of miles you can earn with this card is largely dependent upon which fee structure you choose. The options are to either pay $85 per year, or $5.95 per month. With the $85 per year plan you will earn 1 mile for every $1 spent on qualifying signature purchases. With the $5.95 per month plan you’ll earn 1 mile for every $2 spent on qualifying signature purchases. Given that the yearly cost of the monthly plan is $71.40 I can’t fathom why you’d forgo half your points to save $13.60. Each month you can earn up to a maximum of 2,500 miles, which puts you at 30,000 maximum for the year.

Who needs this card?

If you have any expenditures for which credit cards are not allowed, this product can help fill that void. These might include; student loans, rent, Amazon reload, etc. Be advised that only “qualifying signature purchases” count towards miles earning. This basically means that any purchase where you have to enter your PIN number are not counted. For that reason, if you do sign up for this product you’ll need to select “Credit” when given the option, in store.

Additionally, folks for whom a typical United credit card is out of reach can still sign up and earn United miles with this card. As mentioned above, you can earn up to 1 mile per $1 spent. Additionally, even if you’ve got credit, since this is not a credit card there are no interest payments, late fees, or credit checks associated with this product.

Other Visa GO Prepaid Card Benefits

Another perk of this product is that it offers a 5.00% APY (Annual Percentage Yield) savings account on balances up to $1,000. From the United GO website:

The Savings Account is made available to Cardholders through Republic Bank & Trust Company; Member FDIC. To participate in the Savings Account program, Cardholder must consent to and continue receiving communications from us in electronic form. If Cardholder is subject to Internal Revenue Service backup withholding at the time of the request to open a Savings Account, the request will be declined. Interest is calculated on the Average Daily Balance(s) of the Savings Account and is paid quarterly.

If you deposit $1,000 and maintain that balance for 12 months, you’ll end up with $1,050 after 12 months assuming no additional deposits. While this is nice, its not a homerun as we’ll see when we start talking about the fees associated with this product.

Another interesting perk of this card is the fact that you can request up to six virtual account numbers. These allow you to use one off numbers for transactions, which can lead to more secure online transactions. From the United GO website:

You may request up to six (6) active Virtual Accounts for each active Card Account. Virtual Accounts are subject to the same fees, limits, terms, and conditions as your Card Account. See your Cardholder Agreement or Online Account Center for details.

MileagePlus GO Visa Prepaid Value

I see this card as being valuable to only a very small subset of consumers. Those consumers for whom maximizing the $1,000 in savings is feasible & for whom spending $2,500 is feasible. If you manage to maximize both of those things, then you’ll end up paying a net of $35 in exchange for 30,000 United miles. Those 30k miles can be worth around $450 depending on how you’re able to redeem them. A total net haul of just over $400.

If you’re not able to maintain the $1,000 monthly balance, then by my calculations you’ll have to spend at least $500 a month just to break even on the card. That also assumes you’ll be able to get 1.5 cents per point in value out of the points, which is easier said than done. If we went with a super conservative 1 cent per point valuation, you’ll have to spend just over $700 a month to break even.

So it is worth it?

In my humble opinion, no, at least not for most people. If you’re someone that has bad credit or no credit, my advice is to focus on building your credit. Its a topic i’ve written about extensively and will pay off in the long run. Start with a secured credit card, or try and be added as an authorized user. Work on establishing yourself enough to where you can qualify for starter rewards card.

If you’ve got credit, enough to qualify for just about any rewards product, the value you can derive from that product will almost certainly exceed that of this card. As an example, if you spent $700 a month on the Chase Freedom unlimited, you’d net 1,050 points. That translates to 12,600 points per year, which you can redeem as cash for $126. Oh, and that card doesn’t have an annual fee.

 

What did I miss in reviewing this product? Do you think its worth it? Let me know in the comments below.

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