Q: Why are there six credit cards for Southwest Airline's Rapid Rewards?
A: Because they just released the 6th.
Updated to reflect:
- Performance Card's welcome bonus is now 70k RR points (was 80k)
- In 2020, earning Companion pass in that year will be 125k RR points (was 110k)
So, this could substantially change the math.
This card gets you 3 points / SW$. The rest of the article hinges on this.
Non-performance (we will call them "standard-earning") Southwest cards earn 2 points / SW$ spend, which is important for two reasons:
- Southwest's branded card is a poor rewards value vs. alternatives, like 5% off SW gift cards via Target, or card that earn >2 transferable points per $.
- Both strategies provided below are substantially inferior if spending is only 2 (vs. 3).
I will leave the rewards gaming to the pros, but the
new, probably highest ever, 80k 70K RR points bonus got some friends talking: "Just how easy it it to get a Companion Pass now?
Assuming that cost-efficiency is the best measure:
So here it is, the best and worst method I can think of.
Earn the "Performance" card's signup bonus with only spending with Southwest. Then fly "Business Select" solo using $1250+
- Use a 2 new-card bonuses to hit the earning requirement.
|$199||Pay annual fee|
|70k||Spend $5k on Southwest|
|15k||Earn 3x on $5k via Southwest spending (over 3 months)|
Total spend: $5,199
- $5k in SWA gift cards
- 85k in SWA RR points
|Pay anual fee|
|1k||Earned 1x for non-SWA spending|
Total spend: $1,074 - $1,069
- $1k in normal value of normal spends
- 41k in SWA RR points.
So, the two card strategy of $6348 out of pocket ->
- $348 in fees
- $5000 of pre-paid SWA gift cards (which is worth double when used to pay for a companion pass trip)
- 126k RR points
Optional: If you fly while earning companion pass
- Fly solo, save trips-for-two for the companion pass.
- Fly a higher class, so that you are earning more quickly (higher cost and earning rate) for each trip.
- Sooner is better: you can enjoy closer to the maximum 23 months of Companion pass travel.
- Earning any A-List status/tier... because your 25% or 100% bonus points can redeemed for Companion pass travel.
- ??? is one type of spending better for higher fare types? need to analyze.
Optimal two-year cycle:
Theme: once you have earned 125k "Companion Pass points", the extra points will be lost. They cannot be saved and do not roll-over to next year. So "precision" earning to the limit, and then stopping, is critical to any attempt to repeatedly re-earn companion pass efficiently.
- Defer SWA card spending, to next earning year, if possible. Earning and spending transfer points or flying on existing RR points is optimal in the "off" year.
- Defer flying on the SWA gift cards, if possible. When used, the flights are paid, so they earn the normal flying points.
- Planning to cancel-and-apply for Chase cards (must fall with in 5/24 strategy)
- Weigh your historical-value-of-pass vs. the earning-costs for a new pass in Year 3.
(rest is notes)
Fly solo for two round trips on "Business Select" (in the qualifying phase, more points / $ is better than incremental $ savings).
Earned 110k of Southwest points, which have a maximum value of 220k points if used only trips-for two. (At 1.5¢ / point, thats worth roughly $3300 of companion travel).
Balance of $3750 of pre-paid Southwest air travel, worth $7500 if used on trips-for two. A
Conveniently, that is almost double the spend in value, $11,250.
NOTE: Every round trip-for-two with points will still cost $22.40.
NOTE: Spending the remaining $3750 of gift cards on "Wanna get away" will still earn 22.5k points, worth 45k points if used on trips-for-two.
Without calculating the $5.60 segment fee, thats a total of 132.5k points that had a maximum possible value of 267k points.
After spending the credits, assuming you wanted to get the most (wanna stay away), you'd earn another 22.5k miles (which should be doubled for effect.
265k miles of value.
You'd have 23 months to enjoy this (including additional new spend that is buy one get one free). If you value points at 1.5 cents (a little high, but easy math...), the value being always companion for the next 23 months is $3975.
Remember when you run out of points and you spend new money:
Every $ you spend is doubled for travel with the companion.
Every point you earn is double valued for travel with the companion.