Careful with the Continental OnePass Card – 25,000 miles now could cost you much more later

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Be very careful in deciding whether to apply for the Continental credit card now for only 25,000 miles (30,000 miles if you add an authorized user) because it could prevent you from a higher sign-up bonus later on.

This card pays me one of the highest commissions, but I can’t recommend it without serious qualifications.  In fact, I’m not linking to the card in this post, but as many of you know, you can find the card (& best offers for other cards) listed in the Airlines Credit Card tab on the blog.

Like The Man of a Thousand Places, I recommend that you don’t do anything (unless you are comfortable with the risks which I explain below).  You should have applied for this card in the months leading up to the completion of the merger.  Not a few days before it disappears.

My credit card affiliate agency let me know last night that the Continental OnePass card will be deactivated on Wednesday, February 29, 2012.  I don’t know if this means that the card will no longer be offered in general or just to affiliates like me.  Based on Million Mile Secrets reader Nick’s comments, you may be able to apply for the Continental OnePass card up to March 3, 2012.

As I’ve written before, I don’t like passing along passing along information on cards disappearing, but in this case, Nick (thanks!) had also commented that Continental card will be disappearing.  Here is his comment on my earlier post on Continental and United strategy:

Here is the schedule of events on when things will happen with the merger that the rep gave me:

2/20/2012 – Notify customers of new changes about benefits.

3/3/2012 – Merger is complete. This may be the cutoff date for getting the bonus on both cards.

Sometime between April and August of this year, the new cards will be sent out.

Not as easy as it looks

At first, applying for the Continental card before it disappears (Continental is essentially acquiring United Airlines, but retaining the United name, so the Continental card will no longer be issued) sounds like a no-brainer because it is an easy way to get an extra 25,000 Continental/United miles.

I wrote about the Continental and United card strategy extensively in December which was when you should have applied for the Continental card if you wanted to get the extra 25,000 to 30,000 miles.

Think carefully before applying for the Continental card.

Here are 3 reasons to think carefully before applying for the Continental card.

1.   It could prevent you from the United Explorer bonus.   Chase almost always doesn’t let you get the sign-up bonus for a 2nd time.  However, you can usually get the bonus for a different card type.  For example, the United Mileage Plus is considered a different product from the United Explorer card.

The Continental OnePass card will automatically convert to the United Explorer card.  This means that there is a very high chance that you won’t be able to get the sign-up bonus AGAIN for the United Explorer card once your Continental OnePass card becomes a United Explorer card.

The sign-up bonus on the United Explorer card is currently 50,000 miles after 1st purchase if you have a few United miles in your account (for most folks).  This is one of the best current deals because you get the 50,000 miles after the 1st purchase instead of having to spend thousands of dollars to get the bonus miles.

So applying for the 25,000 mile Continental card now could prevent you from applying for the 50,000 mile United Explorer card later on.

FlyerTalk poster deraynman1 (thanks!) writes in this post (I suspect he/she is referring to the United Explorer instead of United Mileage Plus card):

OnePass plus will be essentially recoded in the system as a United Mileage Plus card and that I may not be eligible for the acquisition bonus if I apply after March 2nd.

2.   The terms on the United Explorer prevent a 2nd bonus.  The terms on the United Explorer card very explicitly state (bolding mine):

“United MileagePlus Explorer cardmembers will only receive one 25,000 bonus miles award if they apply for both the United Explorer Card and the Continental OnePass Plus Card after 7/19/2011“

 This suggests that if you apply for Continental OnePass card now, you won’t be able to get the bonus on the United Explorer card later.

So if you can get only 1 bonus,  why apply for the Continental OnePass card with a 25,000 mile bonus when there is a 50,000 miles United Explorer card available?

I don’t know if these terms are enforced and I couldn’t find evidence on this FlyerTalk thread of folks getting the bonus for BOTH cards after July 19, 2011.  I’m also skeptical of how Chase will track the bonus on both cards, but I wouldn’t put it past Chase to have sophisticated systems which track bonuses received.

A lot of success in the miles and points game is when the terms and conditions aren’t enforced.  But you should know that expecting to get the sign-up bonus on both cards is not permitted according to the terms on the United Explorer card.

Please comment if you’ve got the bonus on BOTH the United Explorer card and the OnePass card after July 19, 2011.

3.   Cancel card quickly.  As I mentioned in my earlier post on Continental card strategy, even if you get the bonus on both the Continental & United Explorer card, you’ll have to cancel your Continental card very quickly, in say 1 or 2 months (assuming you want a shot at the bonus on the United Explorer card).

Otherwise it converts to the United Explorer and you likely won’t get a shot at the sign-up bonus on the United Explorer again.

But cancelling a card in 1 to 2 months is not the best way to show a bank that you intend to be a profitable long term customer.  And you do risk sending a red flag to Chase which has all the best offers.

When is it okay to apply for the Continental card? 1.  You have the United Explorer card before July 19, 2011.  If you have the United Explorer card before July 19, 2011 you could apply for the Continental card, because the terms don’t indicate that you will be denied the bonus on the Continental card. 2.  You have the United Explorer card after July 19, 2011.  If you already have the United Explorer card after July 19 (and are willing to take the risk), you could apply for the Continental card.

That’s because you already have the United Explorer card and don’t have to worry about cancelling the Continental card before it converts to the United Explorer card.

But know that you could end up with 0 miles instead of 25,000 miles if Chase enforces the terms on the United Explorer card.

3.   Terms in the Continental Card don’t restrict a United Explorer bonus.  Interestingly, the terms in the Continental One Pass card don’t prevent you from getting the sign-up bonus on both the United Explorer and Continental card.  Here’s what the terms say:

This one-time bonus offer is valid only for first-time Continental Airlines personal cardmembers with new accounts. Previous and existing Continental Airlines personal cardmembers/accounts are not eligible for this bonus offer.

What am I doing?

Emily and I both applied for the Continental personal and business cards over the last 2 years in anticipation of this day.  We’ve closed these accounts.  Actually we gave them up when negotiating approval for other Chase cards with the Chase reconsideration department (“Continental is merging with United, so I suppose we don’t need 2 United cards”) 🙂

So we’re going to sit this out.  In general, the time to apply for a credit card,  which is soon to be converted to another airline’s card, because of a merger is not in the last week before the card is no longer available, but during the year leading up to the merger

But if we hadn’t got the bonus on both the Continental cards last year, and had waited to the last minute (i.e now), I would NOT apply for the cards.

I like having a large margin of safety which is why I did not apply for the AMEX Premier Rewards Gold card last year when it was claimed that you could bump the bonus to 75,000 points.

Bottom Line:  It appears easy to get an extra 25,000 miles by applying for the Continental OnePass card before it disappears.  And knowing that something is no longer being offered drives folks to make decisions they may otherwise not make.  But just be aware of the potential of not being able to get the bonus on the 50,000 mile United Explorer card later on.  This is not as easy as it appears.

The best course of action is to ensure that your existing Continental card doesn’t convert to a United Explorer card.

If you already have the United Explorer card and are willing to risk a credit inquiry, you could apply for the 25,000 mile Continental One Pass card and see if you get the bonus again.  Good Luck!  You may need it.

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