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As families grow, trips together get more expensive. With summer vacations approaching, I asked father and TPG contributor Jason Steele to write about how he uses the Southwest Companion Pass to keep costs down on his family travel.
The United States may be the hardest place to find multiple award seats at the lowest mileage levels. That ‘s why families often turn to frequent flier programs that offer awards for any available seat, like Southwest Rapid Rewards. Such programs, which include JetBlue’s TrueBlue and Virgin America’s Elevate, offer points that are worth a fixed value toward all seats being sold in a particular fare class.
Since points in these programs have fixed values, the number of points required for redemption varies with the cash price of the ticket. The table below compares the values offered by points on Southwest, JetBlue, and Virgin America. Point for point, the greatest value comes from redemptions with the Southwest Airlines Companion Pass.
|Program||Value in Cents Per Point/Mile|
|Jetblue True Blue||1 – 1.3|
|Virgin America Elevate||1.5-2.3|
|Southwest Airlines Rapid Rewards (without Companion Pass)||1.4|
|Southwest Airlines Rapid Rewards (with Companion Pass)||2.8|
Competing fixed value reward cards include the Capital One Venture and Barclaycard Arrival, which both offer double miles on all purchases, where each mile is worth one cent as statement credits towards eligible travel expenses. This works out to two cents in value per dollar spent on those cards (or slightly more with the Barclaycard Arrival’s 10% rebate).
How to leverage the Companion Pass for families
With our youngest child turning two years old later this year, we will soon need four award seats for family travel. Our solution was to acquire separate Southwest Companion Passes for both my wife and me. I achieved Companion Pass status in early 2013, so my pass is good until December 31, 2014. My wife earned the Companion Pass earlier this year, so hers will expire at the end of 2015. Our plan is to earn a new Companion Pass early next year, and to continue to alternate earning passes every year so long as this offer lasts.
The advantage of this strategy is that we only need to redeem points for two tickets in order to receive four seats. The downside is that takes some time each year to earn a new pass, so its possible that we’ll only have one pass at the beginning of each year.
Earning multiple passes
The easiest way to earn these passes is sign up for two of the Southwest Airlines Rapid Rewards credit cards from Chase. Approximately every three months, Chase offers a bonus of 50,000 Rapid Rewards points for each card after new applicants spend $2,000 within three months of opening the account. This signup bonus is currently available for both the Plus and Premier versions of the Chase Rapid Rewards personal and business cards (4 cards in total), but only valid for a limited time. By meeting the spending requirement on both a personal and business card, we end up with 104,000 of the 110,000 points necessary for a Companion Pass.
Other ways to earn the pass include transfers from hotel points, and of course, flying paid Southwest tickets. A popular trick is to transfer 50,000 Chase Ultimate Rewards points to the Hyatt Gold Passport program, and then to transfer those points to Southwest Rapid Rewards, resulting in 30,000 Rapid Rewards points that are Companion Pass eligible.
Timing your points accrual
More than one person I know has failed to earn their Companion Pass by mistakenly earning points in the wrong calendar year. Here are some key facts you need to know when trying to earn your Companion Pass:
1. The Companion Pass is valid until the end of the following calendar year. If you earned the pass in January of 2014, it’s valid until the end of 2015. If you earn it in November of 2014, it’s still only good until the end of 2015, so earning the pass earlier in the year means it will be valid for longer.
2. The Companion Pass requires 110,000 points to be posted in the same calendar year. If you earn 60,000 points in December and 60,000 points in January, you will not receive a Companion Pass.
3. Bonus points from the Southwest Rapid Rewards cards post once you reach the minimum spend and the next statement closes. Call Chase to find out your statement closing date (it will vary by a few days depending on the length of the month). In many cases, cardholders should wait until the next statement period before meeting the minimum spending requirement, in order to assure that their points will post early in the next calendar year. For example, if you meet the spending requirement in December, but your statement doesn’t close until January, then the bonus points will count toward earning the Companion Pass in the new year.
4. The three month period to meet the minimum spending requirement starts the day your account is approved. Your approval date is the when your account is considered to be “opened,” not the day your card is mailed, received, activated, or first used. If you’re unsure, contact Chase to verify the account opening date and the day the three month period ends.
Other tips on using the Companion Passes for families
Once you have the Companion Pass, you need to maximize its benefits:
1. Make the kids your companions. Ideally I would make my wife my companion so we could get away together for half price, but once she received her Companion Pass, we realized that we would have to each make the kids our companions, since we travel more with them than without.
2. Conserve your companion changes. You can change your designated companion up to three times before the pass expires. For example, if you designate a child, you can change it to your spouse, back to your child, and then back to your spouse one last time.
This comes in handy if you want to take a trip together, but it has some downsides. When you change a companion, you must first cancel all future companion bookings. Keep track of the old confirmation numbers, as they will become credits for the taxes paid, but they can only be used for future reservations in the same name. If you changed companions just to take one trip, be sure to change companions back when you return, and re-add the previous companion to all of your future bookings. It can be tedious work, but it’s usually worth the points saved.
3. Book speculatively. Other airlines and their huge change fees have taught us never to book a flight until we are absolutely sure that we need to travel at that precise time. However, like a retailer with a generous return policy, Southwest’s award tickets are fully refundable at any time before the flight! Considering that their fares tend to increase (and can even sell out) as the departure date approaches, it makes sense to book an award trip and add your companion whenever you think you might want to go somewhere. I know many families that booked Thanksgiving and Christmas travel earlier this week when Southwest opened up their schedule.
4. Rebook during sales. One of the cool features of Southwest’s fully refundable awards is that you can actually get points back when there is a fare sale, although it is more complicated when booking with a companion.
First, you have to cancel the companion ticket online (and again, save the old confirmation number, which contains a credit for the taxes paid). Wait a few minutes until your reservation is updated in their system, and then change your existing reservation and select the same flights as before. You will receive points back (or credit for cash) equal to the difference and not have to pay taxes again. Finally, re-add your companion using the old confirmation number as a travel credit toward the taxes. It takes a few minutes, but I often get thousands of Rapid Rewards points credited back to me during a good sale.
5. Wait for a promo code before you use dollars. If you don’t have enough points for all the award travel you need, you may have to purchase some revenue tickets. Occasionally, Southwest offers promotional codes that can only be used for cash bookings, not awards. If you have to pay for tickets, this is the time. You could even cancel award bookings, get the points back, and earn points for your discounted revenue fare.
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards