Maximizing Southwest Rapid Rewards Points Pre-March 31st Devaluation
Update: Some offers mentioned below are no longer available. View the current offers here.
Offer expired March 9, 2014.
Back in September, Southwest announced it would be devaluing Rapid Rewards points on Wanna Get Away redemptions. The short of it is, starting March 31, 2014, you'll need 70 points per $1 instead of 60 points per $1 on Wanna Get Away fares, bringing down the per-point value from about 1.8 cents to just 1.4 cents each. That means time is ticking to maximize the current 50,000-point sign-up offers on the Southwest credit cards by redeeming before the March 31 devaluation deadline.
Right now, those sign-up bonuses would be worth about $833 in Wanna Get Away fares, but after March 31, they'll be worth just $715 - still a good offer, but not as great. Remember, you have the meet the minimum spending requirement for the bonus and then wait for the statement to close and the points to post - so if you've been thinking of applying, you should do so immediately to be sure you will score the bonus in time to redeem those points before the devaluation.
Now is also a great time to get these cards because the Rapid Rewards points you earn as part of the sign-up bonuses as well as on your credit card spend will count toward Companion Pass qualification.
Chase will allow you to get the sign-up bonus for each of its four Southwest co-branded cards, so you might want to consider also applying for the business version of the Premier or the Business Plus card if you have a small business. Many readers have reported that it is possible to get both in one day, so you can bank up to 100,000 points in one set of applications - and remember, you only have to earn 110,000 points to qualify for the Companion Pass.
Now is a great time for this strategy in particular because if you do manage to get the Companion Pass quickly right now, it will be good for almost two years until the end of 2015 – representing a potentially tremendous value in both saved money and points.
Other Pre-Devaluation Options
If you already have the Southwest credit cards, or are maxed out with Chase, there are still some other options for you. Remember that Southwest is a 1:1 transfer partner of Chase Ultimate Rewards, so if you have the Ink Plus, Ink Bold or Chase Sapphire Preferred cards, you can transfer those points to your Southwest Rapid Rewards account - and I'd suggest doing so before the devaluation so you can lock in awards at the better rate. Just note that points transferred in from Ultimate Rewards do not count towards the Companion Pass.
Another more complicated, but potentially valuable, workaround is to convert Southwest Rapid Rewards points into the old Southwest credits via AirTran credits and redeem them that way.
You can do so here, but to explain how it breaks down:
1,200 Rapid Rewards Points = 1 Airtran A+ Rewards Credit
1 Airtran A+ Rewards credit = 1 old Southwest Rapid Rewards Credit
16 Southwest Rapid Rewards Credits (for a roundtrip award) = 16 Airtran A+ credits or 19,200 current Southwest Rapid Rewards points
So as you can see, in order to end up with the 16 old Southwest Credits you would need for a roundtrip award, you would need to transfer 19,200 current Rapid Rewards points to get 16 A+ Credits then transfer those to old Southwest Rapid Rewards.
The current break even point, where it makes more sense to use old credits instead of new Rapid Rewards points is if there is Standard Award availability on roundtrip airfares of $320 or higher since Wanna Get Away fares require 60 Rapid Rewards points per $1 in base fare. After March 31, the break even point will be $275 (at 70 Rapid Rewards points per $1) - so any roundtrip flight with award availability that would cost more than that is probably better as an old Southwest credit redemption. Now, there's been no news on whether this conversion rate will change, but for now this looks like a viable option.
The one thing to consider is that it's a bit harder to search for Standard Award Availability - awards you can use those old Southwest credits on - and availability can be tight on popular routes. It also looks like the value of these fares are calibrated for itineraries that are close to or at parity with the value you’d get from your Rapid Rewards points instead of old Credits, but in certain instances, you can save thousands of points. You can read more about the process in this post.
For more information, check out these posts: