Credit Card Review: Southwest Rapid Rewards Premier Card

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

Savvy TPG readers know that we generally don’t recommend building your points strategy around a cobranded airline or hotel credit card. They tend to offer fewer perks and less flexibility than a comparably priced transferable points card. This is especially true of the Southwest Rapid Rewards card portfolio, which don’t really measure up to the better earning rates and flexible redemption options of cards that earn Chase Ultimate Rewards points (which transfer to Southwest at a 1:1 rate).

That being said, the Southwest credit cards have remained very popular among those looking to earn the elusive Companion Pass and the year of free flights it bestows on their designated travel companion.

Who Is This Card For?

This card is ideal for anyone looking to earn the Southwest Companion Pass. While the  Southwest Rapid Rewards Premier Credit Card and the Southwest Rapid Rewards Plus Credit Card are currently offering identical sign-up bonuses, the Premier is ideal for those looking for a cheaper annual fee than the Priority, while still enjoying perks like no foreign transaction fees and a 6,000-point card anniversary bonus.

Current Bonus

The current bonus on the Premier Card (as well as on the Priority and Plus cards) is now offering 40,000 Rapid Rewards points after spending $1,000 in the first 3 months. TPG values Rapid Rewards points at 1.5 cents each, meaning 40,000 points are worth $600.

Earning

The earning rates on the  Southwest Rapid Rewards Premier Credit Card are identical to dozens of other cobranded airlines cards. You’ll earn 2x miles on Southwest purchases (and when booking hotels or renting a car through a Southwest partner), and 1x on everything else. This gives you a return of 3% on Southwest purchases and 1.5% on everyday spending, which isn’t much to get excited about. This isn’t the most rewarding card you can pick for long term spending goals.

Redeeming

One of the best things about redeeming Southwest Rapid Rewards points is the simplicity of the process. Whether you select the cheapest Wanna Get Away fares of the more expensive Business Select tickets, the cost of your award ticket is tied to the cash price of the flight. This means you don’t have to worry about getting the highest possible cent-per-point redemption value; if you have Southwest points, it’s almost always a good idea to redeem them.

Take the below example of a flight from Washington, D.C. (DCA) to Chicago (MDW).

Depending on which fare type and routing you select (i.e., connecting vs. nonstop), you’ll earn anywhere from 1.43-1.59 cents per point you redeem, with the best values coming from the cheapest Wanna Get Away fares.

When compared to the legacy US carriers that all charge a fixed amount of miles no matter the price of the ticket, with Southwest, you really don’t have to work hard or do any math to make sure you’re getting a good deal.

Southwest also gives you the option to redeem your points for gift cards, merchandise, rental cars, hotels and experiences, though these redemption options offer a much worse value. Interestingly enough Southwest also lets you redeem your Rapid Rewards points for international flights on other airlines. The exact redemption value varies, but it’s generally worse than you would get redeeming directly for Southwest flights. And remember, with your Companion Pass your points stretch twice as far, so there isn’t much reason to be looking at redemption options other than on Southwest flights.

Perks

While you don’t expect a card with a $99 annual fee to come loaded with perks, there are a few on the  Southwest Rapid Rewards Premier Credit Card worth mentioning.

The first is the 6,000-point anniversary bonus you’ll receive after renewing your card. While the annual fee is not waived the first year, TPG values 6,000 Rapid Rewards points at $90, meaning that the anniversary bonus will almost entirely offset your annual fee from your second year on.

While the Companion Pass is technically a form of Southwest elite status, is doesn’t carry most of the common elite perks (bonus points, priority boarding, etc.) Especially if you’re taking the shortcut to earning the Companion Pass through this sign-up bonus, you may also be interested in earning Southwest A-List status to enhance your travels. Doing so requires 25 qualifying flights of 35,000 tier qualifying points (TQPs) in a calendar year, but you can earn bonus TQPs by spending on the Premier card. You’ll earn 1,500 TQPs for every $10,000 spent per calendar year, up to $100,000 (or 15,000 TQPs).

Which Cards Compete With The Southwest Premier Card?

The most obvious competitors to the Southwest Premier card are the other two personal cobranded Southwest cards, the higher end Southwest Rapid Rewards Priority Credit Card and the Southwest Rapid Rewards Plus Credit Card. With all three cards offering identical sign-up bonuses, this competition comes down to which card offers the best perks in exchange for its annual fee. If you’re struggling to pick between the three you can check out this head-to-head comparison. While the Plus card only costs $69 a year, it has a 3% foreign-transaction fee and a weaker anniversary bonus of only 3,000 Rapid Rewards points (worth $45).

The Priority card, on the other hand, has a $149 annual fee but includes a $75 annual Southwest travel credit. That immediately knocks the out-of-pocket cost down to $74 a year, but remember the Companion Pass doubles the value of your points and spending with Southwest, so in many ways that $75 credit is actually worth $150. This makes the priority card cost an effective -$1 out of pocket, for which you get a 7,500-point anniversary bonus, four upgraded A1-A15 boardings (when available), 20% back on inflight drinks and Wi-Fi, and no foreign transaction fees just with like the Premier card. Many people will be better off opting for the Priority card over the Premier. Even if you can’t requalify for the Companion Pass, at $74 a year (after subtracting the annual Southwest credit) the upper tier Priority card is cheaper than the $99 Premier card.

Another card that gives the Premier card a run for its money is an old-time favorite, the Chase Sapphire Preferred Card. The CSP is offering a sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 in three months. While it’s hard to put a value on the Companion Pass without knowing exactly how many times you’ll use it, those 50,000 points are worth anywhere from $625 if you redeem them for travel through the Chase portal (with a 25% bonus) to $1,000 or more if you transfer to Chase’s incredible collection of airline and hotel partners. The CSP has a $95 annual fee that’s waived for the first year. It also carries better bonus categories, 2x on dining and travel and not just on Southwest. Throw in Chase’s excellent travel delay and cancellation insurance, baggage insurance and rental car insurance, and most other days the CSP would be a no-brainer. The only reason it’s not right now is because of the limited-time Companion Pass welcome offer on the Priority card.

Bottom Line

The airline with perhaps the best public perception in the US has scored another huge win by offering the Companion Pass, an unbelievably valuable perk, as a sign-up bonus on the Southwest Priority, Premier and Plus cards. Remember that like most Chase cards these are subject to the 5/24 rule, so if you’ve opened 5 or more cards in the last 24 months your application will be automatically rejected.

If you decide to pursue this offer, the Premier card is a good avenue for doing so. It offers a decent return with a lower upfront cost, but most people will come out ahead by opting for the Priority Card and the $75 annual Southwest travel credit it carries. That perk alone helps it stand out from these otherwise similar cards. Assuming you max the credit every year, the upper-tier Priority card is actually cheaper than the middle level Premier card, and that’s before you even factor in the added savings that come with the Companion Pass.

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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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