Credit Card Review: Southwest Rapid Rewards Plus Card

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Update: Some offers mentioned below are no longer available – View the current offers here – Southwest Rapid Rewards Plus Credit Card, Southwest Rapid Rewards Priority Credit CardSouthwest Rapid Rewards Premier Credit Card

Official application links: Earn the Companion Pass and enjoy 2-for-1 travel for the rest of 2019 with the Southwest Rapid Rewards Plus Credit Card, the Southwest Rapid Rewards Premier Credit Card or the Southwest Rapid Rewards Priority Credit Card

In a hobby now dominated by ultra-premium credit cards with $450+ annual fees and a laundry list of luxury perks, I never thought I’d be saying that a $69 credit card, the most bare-bones version that Southwest offers, might just be the most valuable card available right now.

Southwest is already relatively unique in that it offers three affordable, non-premium personal credit cards. With the recent decision to offer an identical sign-up bonus across the three cards — the Southwest Companion Pass through Dec. 31 and 30,000 Rapid Rewards points after spending $4,000 in the first 3 months — it’s even more important to look at the differences between your three choices.

Premium credit cards usually earn our loyalty by making up for their hefty fees with even more valuable perks, but unless you’re planning on using a Southwest credit card for a majority of your spending, you might be better off sticking to the cheapest version here. Let’s take a look at how the Southwest Rapid Rewards Plus Credit Card measures up.

Who Is This Card For?

There’s no need to beat around the bush when discussing this limited-time offer: This card is for people looking to earn the elusive Southwest Companion Pass in as little time as humanly possible. This is not the card that’s going to unlock the doors of fancy first-class suites or give you all the trappings of elite status, but it is the cheapest and quickest way to score up to a year of free travel for you and your designated companion.

Note that the Companion Pass earned through this deal expires on Dec. 31, 2019, no matter when you choose to apply. If you’re interested in pursuing this deal and are eligible to apply for a personal Southwest credit card, there’s no reason to wait, as the clock is already ticking down against you.

Current Bonus

Whether you settle on the Southwest Plus Card or opt for one of its siblings instead (the mid-tier Southwest Rapid Rewards Premier Credit Card or the higher-end Southwest Rapid Rewards Priority Credit Card), you’ll earn the exact same sign-up bonus after spending $4,000 in the first 3 months, now through Feb. 11:

It’s worth noting that when TPG decided to value Rapid Rewards points at 1.5 cents each, he was considering the average redemption value one could hope to achieve. Having a Companion Pass essentially doubles the value of your points, as every ticket you book becomes a two-for-one. This means that 30,000 points are worth about $900, and if you have almost a whole year of intensive Southwest travel ahead of you, it should be easy to get this type of elevated return on your sign-up bonus.

Earning

The one area where most cobranded credit cards fall short is in the bonus categories, and the Southwest Plus Card is no exception. You’ll earn 2x points (or 3% back based on TPG’s valuations) for Southwest purchases and purchases with Rapid Rewards hotel and car rental partners, and 1x (1.5%) everywhere else. Whether you’re looking to rack up cash or points, there are plenty of cards that offer a better return on everyday spending. When it comes to travel bookings, it’s even possible to earn more Southwest points on your purchase by using a card like the Chase Sapphire Reserve instead, but more on that later.

While most of Southwest’s route network is concentrated on domestic US flights, if you use your Companion Pass to take your friends or family to Mexico or the Caribbean, be warned that the Southwest Plus Card has a 3% foreign-transaction fee. When you combine this with the relatively low earning rates, it’s easy to say that this is not going to be the most rewarding card for you to spend on long-term. But given the sky-high value of the current sign-up bonus, you shouldn’t overlook this card either. Even if it ends up in your sock drawer after the first three months, it might be the most valuable card you open all year.

Redeeming

Rapid Rewards offers a few low-value redemption options including gift cards, merchandise, hotel stays, rental cars and travel experiences. You can even redeem for international flights on other carriers, but for all of these options the rates are worse than what you’d get by redeeming for Southwest flights. And of course, with the Companion Pass, your points are worth twice as much when you use them for Southwest flights.

But the real value comes with award flights on Southwest. The airline offers three tiers of fares, ranging from the cheapest Wanna Get Away tickets to the more expensive Business Select ones.

The award rates are loosely tied to the cash price of the ticket, unlike most other US airlines that use fixed-value charts. This means you don’t have to worry too much about saving up for a good redemption opportunity. If you have Southwest points, it’s almost always a good idea to use them.

In the above example, you can see that redemption rates fluctuate between about 1.4-1.6 cents per point, hence TPG’s valuation of 1.5 cents. The best values come from booking cheaper Wanna Get Away fares, but other than that it’s nice not having to worry too much about the exact numbers.

Perks

As you would expect from a card with an annual fee of only $69, there aren’t many perks here to speak of. The only thing you really get to offset your annual fee is 3,000 bonus points on your account anniversary, worth about $45 based on TPG’s valuations. Remember that unless you requalify for the Companion Pass, your first card anniversary will be after the promotional Companion Pass expires so those 3,000 points are really just 3,000 points.

Which Cards Compete With the Southwest Plus Card?

The most obvious competitors to the Southwest Plus Card are the Southwest Premier and Priority cards. You can read this guide for a full head-to-head comparison if you’re still having trouble deciding, but here’s an overview: The Premier has a slightly higher annual fee of $99, a better anniversary points bonus (6,000 points) and no foreign transaction fees. Other than that, there’s not much else to help it stand out.

If you’re interested in getting more out of your Southwest credit card, you should set your sights on the Priority card. Your $149 annual fee is cut in half thanks to a $75 annual Southwest travel credit, which is really worth $150 while you have the Companion Pass. This essentially makes the Priority card free for any year that you have the Companion Pass, and less expensive than the mid-tier Premier card if you don’t. The Priority card also has a 7,500-point anniversary bonus and offers four upgraded A1-A15 boardings and a 20% discount on inflight drinks and Wi-Fi.

The question you ultimately need to answer for yourself is do you want the cheapest card that will let you get your hands on the Companion Pass (the Southwest Plus), or are you willing to pay more money upfront and essentially have it returned to you in the form of Southwest travel credits and anniversary points bonuses?

While it’s slightly more expensive at $95 a year, the Chase Sapphire Preferred also competes with the Southwest Plus Card. The Sapphire’s 60,000-point sign-up bonus (after spending the same $4,000 in 3 months) is worth $1,200 based on TPG’s valuations, but a minimum of $750 if you redeem it directly through the Chase portal with a 25% bonus. It also earns 2x on travel and dining, two very broadly defined categories that include much more than just Southwest purchases. Throw in excellent travel delay and cancellation insurance, baggage and rental car insurance and access to Chase’s incredible collection of hotel and airline transfer partners (including Southwest), and the Sapphire Preferred is guaranteed to offer value year after year, long after the promotional Companion Pass offer has expired.

Bottom Line

While it’s beyond exciting to see Southwest making the Companion Pass so accessible for the first time ever, it doesn’t change the underlying fundamentals of the Southwest Plus Card. A shiny new sign-up bonus is more than enough reason to apply for a card, but like many cobranded airline cards, this one can’t hold its own when it comes to return on spend and travel perks offered.

It’s also worth noting that this limited-time offer doesn’t bypass Chase’s 5/24 rule. If you’ve opened 5 or more cards in the last 24 months, you’ll be automatically rejected when applying for this card. Make sure to check your credit report carefully so you don’t waste a hard pull for nothing.

Know before you go.

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Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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