Southwest Rapid Rewards Plus card

In a previous series of articles, I covered the various tiers of credit cards offered by the “Big 3” US airlines: American, Delta, and United.  However, something that is important to note is that United is actually the 4^th largest airline by number of passengers carried and has been since 2015, when it was surpassed by Southwest Airlines.  For a sense of scale, in 2019, American carried 215 million, Delta carried 204 million, Southwest carried 162.8 million, and United carried 162.4 million passengers. It’s worth noting as well that the 5^th largest US carrier is actually Alaska Airlines, which carried 46.7 million passengers in 2019 according to the Wikipedia list.  It’s, therefore, only fair that I talk about Southwest’s rewards credit cards.  First up is the $69 annual free “Southwest Rapid Rewards Plus Credit Card”.  Interestingly, Southwest doesn’t offer any credit cards with no annual fees.

Welcome Offer

At the time of posting, the Southwest Plus card has an enhanced welcome offer of 60 000 Rapid Rewards points after you spend $3 000 in the first 3 months of account opening. In addition, the card gives you a 30% promo code off one one-way or round-trip flight.  The standard welcome offer is 50 000 points after spending $1 000 in the first 3 months. Southwest’s Rapid Rewards program is a revenue based program, and pretty consistently, Rapid Rewards points are worth 1.5 ¢/pt.  That makes this welcome offer worth at least $900, which is great for a relatively low annual fee card.

Earnings

The Rapid Rewards Plus card has a straight-forward two-tiered structure, where the card earns 2x points/$ on: Southwest purchases, “Rapid Rewards hotel and car rental partners”, local transit and commuting, internet/cable/phone services, and select streaming options.  The card earns 1x point/$ on everything else. 

Benefits

For a low $69 annual fee, this card provides a fair number of benefits compared to other airlines’ lowest (no annual fee though!) cards.  The card offers a bonus 3 000 points each year (worth $45), which erases about 2/3 of the annual fee.  The card also offers 2 “EarlyBird Check-In” rebates each year. EarlyBird check-in checks you automatically at the 36 hour mark and helps you get an earlier boarding position and thus, probably, a better seat (but a boarding position of A16 or later).  These “upgrade certificates” cost at least $15 each, so these two benefits combined represent $75+ of value.  The card also offers 25% back on inflight purchases, but Southwest does not sell food onboard, so this is just 25% back on premium (e.g. alcoholic) drinks.  Finally, the card offers a boost of 10 000 Companion Pass qualifying points each year.  These points can’t be used for anything by themselves and are only relevant if you’re close to getting a Companion Pass (135 000 qualifying points required).

How to use the points

The main use for Southwest Rapid Rewards points is to redeem them for Southwest flights and other “Rapid Rewards” partners.  I’ve only ever used the points for Southwest flights at their standard rate of 1.5 ¢/pt, and since it’s a flat rate, it means that there are always seats available for points.  Southwest is a transfer partner of Chase and so Chase Ultimate Rewards points can be transferred in to boost your Rapid Rewards point balance.

Examples of using the card

These examples assume you spend all your airfare budget at Southwest

Spend per month

	Example A		Example B		Example C		Example D
Groceries (1x)	$300	300	$200	200	$600	600	$400	400
Gas (1x)	$0	0	$100	100	$200	200	$100	100
Airfare (2x)	$700	1 400	$200	400	$0	0	$400	800
Hotels (1x)	$1 000	1 000	$200	200	$0	0	$300	300
Gen Travel (2x)	$400	800	$0	0	$300	600	$100	200
Dining (1x)	$600	600	$300	300	$300	300	$0	0
General (1x)	$1 000	1 000	$500	500	$500	500	$400	400
Total	$4 000	5 100	$1 500	1 700	$1 700	2 200	$1 700	2 200
Average points/$		1.28		1.13		1.29		1.29

The simple earning structure means that the average points earned has a relatively small range of 1.13 – 1.29 points/$, which is worth 1.70 – 1.94 ¢/$.  That’s actually a pretty good return for an airline co-branded credit card with a relatively low annual fee.  That being said, Chase offers better earning opportunities on its non-co-branded cards.

Specific examples

These examples include the bonus points earned from getting IHG Elite Platinum status from the card.

Card	Southwest wanna get away fare ($750)  (% return)	Marriott Hotel night ($230/night)	Points values (WT/Hotel)
No rewards card	4 050 RRP (8.1%)	2 200 MP (7.3%)	$60.75 / $11.00
General 2% cashback card ($0)	4 050 + $15.00 (10.1%)	2 200 MP + $4.60 (9.3%)	$75.75 / $15.60
Chase Sapphire Preferred ($95)	4 050 + 1 500 UR (11.1%)	2 200 MP + 460 UR (10.3%)	$83.25 / $17.90
Amex Green Card ($150)	4 050 + 2 250 MR (12.3%)	2 200 MP + 690 MR (11.5%)	$92.25 / $21.35
Southwest Plus card ($69)	5 550 RRP (5.9%)	2 200 MP + 230 RRP (8.7%)	$83.25 / $14.45

Is this credit card right for you?

If you travel with Southwest occasionally and value the upgraded boarding positions and points offered by this card, then I think this card could potentially make sense, especially if you don’t want to pay a high annual fee.  However, given that there is no free Southwest card, I’m not entirely convinced that the value proposition of this card is entirely there if someone wants to avoid high annual fees, given that the two other options: the Southwest Premier and Priority cards are not actually that much more expensive per year and offer enhanced benefits.