Southwest is Working to Make Their Co-Branded Credit Card Look More Attractive

Amanda Garland

Will additional boosted point earnings and new perks keep current cardholders from jumping ship?

The airline industry took a huge hit with Covid, despite the very generous stimulus package that the US government provided them.

And with the travel industry shriveling up like an over-ripe apple in the sun, people started questioning the value of all those travel rewards programs and the credit cards associated with them. Why do I need this credit card with a hefty annual fee if I can't even use the travel rewards?

The travel industry and credit card companies have taken notice, and have been releasing a flurry of updates to their credit card products in an attempt to retain their existing customers and to try to attract new customers to replace those who closed their now seeming useless accounts.

One of the most recent companies to do this is Southwest. There card rewards refresh included several new points earning categories as well as new perks for all three of their co-branded personal credit cards (all by Chase).

Credit Card Features Before the Recent Announced Changes

Before we look at the new features the cards have, let's take a quick look at the features these 3 Cards had before the announcement. There were several features that were common to all three credit cards as well as a few features that were unique to each credit card.

Features Common to All Three

  • 2x points on Southwest purchases
  • 2x points on car rentals and hotels booked only through their partner website
  • 1x points on everything else
  • Zero foreign transaction fees

Southwest Rapid Rewards Plus

  • $69 annual fee
  • 3,000 Rapid Rewards points on your card anniversary

Southwest Rapid Rewards Premier

  • $99 annual fee
  • 6,000 Rapid Rewards points on your card anniversary
  • Earn 1500 tier qualifying points (TQPs) for every $10,000 spent (max 15k TQPs a year)

Southwest Rapid Rewards Priority

  1. $149 annual fee
  2. 7,500 Rapid Rewards points on your card anniversary
  3. Earn 1500 tier qualifying points (TQPs) for every $10,000 spent (max 15k TQPs a year)
  4. $75 Southwest credit each year (use on in-flight purchases, early bird check-in, etc.)
  5. 4 upgraded bookings each year

Southwest Announces Changes to Their Credit Cards

Southwest publicly announced changes to their credit card rewards programs on October 19th with notifications going out via email to their existing customers regarding the changes to their specific card.

So what are these fantastic new features, and which cards benefit from them the most?

Boosted Earnings on Southwest

A new perk for earning 25% cashback on inflight purchases has been added to all three credit cards. Inflight purchases include food, drinks, and internet access.

Since Southwest already offers complimentary snacks, beverages, and entertainment, this perk is really only going to be useful to a select few who either fly frequently and/or take long/international flights.

Southwest has also boosted the earning rate on all Southwest purchases to 3x points, but only on the Premier and Priority cards. So now you'll earn an extra point per dollar spent on tickets and upgraded boarding.

For example, if you spend $200 on a roundtrip ticket and put it on your Southwest credit card, it would have previously earned you 400 Southwest points (in addition to the points you earn through the Rapid Rewards loyalty program). Now the same spend will earn you 600 Southwest points.

Admittedly, with point redemptions starting near 5000, it will still take you many flights to earn enough for a free flight.

Additional Bonus Categories

One of the better new features added to the Southwest credit cards is the ability to earn 2x points in completely new categories.

On all three cards, you can now earn 2x points on transit purchases (including rideshare), internet, cable, phone, and streaming services.

If you are spending $300 a month in these categories, that is 7,200 extra Southwest points a year in your pocket. You could easily snag a low-cost one-way ticket for that number of points.

New Perks

Another new perk for all three cards is the gift of 2 Early Bird check-ins a year. This is a $30 - $50 value, depending on your flight. This feature allows you to get priority boarding in the form of a lower (earlier) boarding number.

In addition to this new perk, they have also expanded the tier qualifying point-earning program available on the Priority and Premier cards. You can now earn an unlimited amount of TQPs through credit card spending.

Previously it was limited to 15k points earned in a year, which would require $100,000 worth of credit card spend. Now you can earn as many TQPs as you want providing you are willing/able to put more than $100,000 worth of spend on your Southwest credit card each year.

Bonus Point Offers for New Cardholders

In an attempt to attract new credit card customers, Southwest is offering an unprecedented 100,000 bonus points offer to new cardholders.

To qualify for the first 50k, you need to spend $2,000 within the first 3 months of opening the card.

To qualify for the remaining 50,000 points, you'll need to spend $12,000 within the first 12 months of having the credit card open.

100,000 points is a nice chunk of change considering Rapid Rewards points are currently valued at 1.4 cents each. That is a $1,400 value in points just for the sign-up offer.

The downside is, in order to earn them, you'll need to put around $1000 a month in spend on the card, meaning you'll likely be using your card for purchases beyond the card's bonus categories. I.E. purchases that you could get better rewards on using a different credit card.

Verdict On the Changes

Many of the new features are beneficial only for those who travel frequently. And while frequent travel is the whole purpose of getting a Southwest credit card, for those who found their travel cut dramatically due to Covid, these new features likely won't convince them to keep their Southwest card.

While the new bonus categories help some, it becomes a question of whether or not this offsets the annual fee of the card.

For those that are traveling on a semi-frequent basis, the new features on the Southwest credit cards look awfully tempting. But, if you are traveling that frequently, especially for business purposes, a business credit card might be a better choice.

The best feature for the Southwest card is the bonus points offered for new cardholders. This large number of points coupled with the new higher point-earning potential could make it worthwhile to open and hold onto one of these credit cards for at least a year.

But for existing Plus cardholders, the new features exclusive to the Primier and Priority cards just took a huge chunk out of the value of your card. So it might be time to upgrade the card or close the account entirely.

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A Texan and new mom, writing about things I am most passionate about; personal finance, parenting, and the events that shape Texas.

Dallas, TX

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