Should I Upgrade to the New Southwest Priority Credit Card?
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"Reader Questions" are answered twice a week by TPG Associate Editor Brendan Dorsey.
Last month, Chase and Southwest launched a new co-branded credit card — the Southwest Rapid Rewards Priority Credit Card. This new upper mid-tier card builds on top of the two existing personal Southwest cards, so TPG reader McKenzie wonders if it's worth it to upgrade...
[pullquote source="TPG Reader McKenzie"]Do you think it’s worth it to upgrade from the Southwest Premier card to the new Southwest Priority Card?[/pullquote]
Before the new Priority card launched, Chase offered two personal cards — the Southwest Rapid Rewards Plus Credit Card and Southwest Rapid Rewards Premier Credit Card— in addition to the business edition, the Southwest Rapid Rewards Premier Business Credit Card.
So does it make sense to upgrade from the Premier to the more expensive Priority? Since all of the Southwest cards have the exact same earning rates — 2 points per dollar on Southwest purchases as well as Rapid Rewards hotel and car rental partner purchases, and 1 point per dollar on everything else — what makes one stand out from another?
|Card||Annual Fee||Sign-Up Bonus||Anniversary Bonus||FX Fees||Earns Tier Qualifying Points||Southwest Credit|
|Southwest Rapid Rewards Plus Credit Card||$69||up to 75,000 points*||3,000 points||3%||No||None|
|Southwest Rapid Rewards Premier Business Credit Card||$99||60,000 points**||6,000 points||None||Yes||None|
|Southwest Rapid Rewards Premier Credit Card||$99||up to 75,000 points*||6,000 points||None||Yes||None|
|Southwest Rapid Rewards Priority Credit Card||$149||up to 75,000 points*||7,500 points||None||Yes||$75|
* 40,000 points after spending $1,000 on purchases in the first 3 months account is open. Plus, earn an additional 35,000 points after spending $5,000 on purchases in the first 6 months account is open.
** After spending $3,000 in the first 3 months.
The Premier and the Priority look quite similar at first glance — both have the same earning rates, both earn Tier Qualifying Points and neither charges foreign transaction fees. But the few things that do differentiate them have a significant impact on the value derived from each card.
The Southwest Rapid Rewards Priority Credit Card has a $149 annual fee but comes with an annual $75 travel credit that can be used toward Southwest flights and fees (it doesn't cover upgraded boardings and inflight purchases). It also awards 7,500 points on each account anniversary, worth $112.50 according to TPG's latest valuations. If you can use both the travel credit and anniversary points every year, you'd actually come out $38.50 ahead just by having the card.
On the other hand, the Southwest Rapid Rewards Premier Credit Card carries a $99 annual fee and awards 6,000 points (worth $90) on each account anniversary, but doesn't include a travel credit. That makes the effective annual fee a total of $9.
By just comparing those aspects between the two cards, it probably makes sense to go with the Priority over the Premier since Southwest is practically paying customers to hold the Priority!
Now, if you don't fly on Southwest at all, or only fly it once in a while, then perhaps neither Southwest card is right for you. But if you fly on Southwest two or more times a year, the Southwest Rapid Rewards Priority Credit Card appears to be an easy win. And to boost the card's case even more, it comes with a few extra perks that elevate the Southwest experience.
Priority cardholders receive 20% back on in-flight purchases, including drinks, Wi-Fi, messaging and movies. Even more valuable are the four upgraded boardings, which normally cost anywhere from $30 to $50 each, depending on your routing. This perk will ensure you get your preferred seats since Southwest is first come, first serve when it comes to seat assignments. Maximizing this perk can save you at least $120 and as much as $200.
So, if you can maximize all of these perks — the $75 Southwest credit, the 7,500 anniversary points and the four upgraded boardings — the Priority could provide as much as $387.50 in value each year. That easily covers the cost of the $149 annual fee and then some, making your net annual gain from the card $238.50. On the flip side, the Southwest Rapid Rewards Premier Credit Card doesn't provide any perks other than the 6,000 anniversary points, so there's no way to attain more value (other than pure spending) on top of that.
The same general argument applies to those thinking about upgrading from the $69 annual fee Southwest Rapid Rewards Plus Credit Card. If you can maximize the 3,000 anniversary points, it'll make the effective annual fee $24. However, this card doesn't earn Tier Qualifying Points and charges 3% in foreign transaction fees, making it one to avoid for anyone thinking about international travel or Southwest A-List status.
Lastly, instead of upgrading her Premier, it could be wise for McKenzie to apply directly for the Southwest Priority card outright. While there are new restrictions on who can and can't receive a sign-up bonus for a Southwest credit card, it's still possible to get one.
If McKenzie earned the sign-up bonus on her Premier card more than 24 months ago and is under Chase's 5/24 limit, she may be eligible to earn the Priority's sign-up bonus. She'd just have to cancel her Premier first since Chase's terms and conditions state that “The [Southwest Priority] is not available to... current Cardmembers of any Southwest Rapids Rewards Credit Card." A Southwest sign-up bonus also greatly helps in the quest of attaining one of the most valuable tools in the travel community, the Southwest Companion Pass.
McKenzie should ask herself this question: can she take advantage of the $75 Southwest credit and the 7,500 points each year? If so, then it would definitely make sense to upgrade to the new Southwest Rapid Rewards Priority Credit Card. If she can't (which is nearly impossible unless she doesn't fly Southwest much at all), then it would be wise to hold onto the lower annual fee Southwest Rapid Rewards Premier Credit Card or even look for another travel rewards card entirely.