The Insider Picks team writes about stuff we think you’ll like. Business Insider may receive a commission from The Points Guy Affiliate Network.
© Southwest Airlines
- Southwest is currently offering an up to 60,000-point sign-up bonus for all four of its credit cards – over half of what’s needed to get the 110,000 points necessary for the lucrative Companion Pass.
- You won’t find a better opportunity to try and get the holy grail of travel rewards.
If you’re new to the travel-hacking community, or just like the idea of flying free, there is one rewards program that is considered the holy grail of free travel: the Southwest Companion Pass.
Why is it so sought after?
Well, the Companion Pass lets a designated family member travel with them for free, for a whole year. While you do have to pay taxes on the ticket, the rest of the ticket price is completely waived, saving you an average of $349 per flight (based on 2018 average US domestic flight price), with the potential to save tens of thousands of dollars over the course of the year.
Like we said, the holy grail of travel.
Which is why if you google “Companion Pass” you’ll find dozens of articles from every credit card-churning, travel-hacking site out there trying to tell you the best way to work your way toward 110,000 tier qualifying points necessary for the Companion Pass – without spending like a private jet traveler to get there. With no sign-up bonuses, you’d have to to spend upwards of $80,000 annually to get the reward.
That’s why everyone is losing their minds over Southwest’s current offering of up to 60,000 bonus points for all four of its credit cards. Forget the fact that those miles are valued at $600 to $1,000 by themselves, they’re also over half way toward qualifying you for to the Companion Pass – and free travel for a family member for a year.
All three of the personal Southwest Rapid Rewards cards are currently running the same promotion: 40,000 bonus points for spending $1,000 in the first three months of opening an account, and an additional 20,000 bonus points for spending $12,000 in the first 12 months. If you are able to qualify for the Southwest Rapid Rewards Premier Business Credit Card, you’ll be able to earn 60,000 points after spending just $3,000 in the first three months – and stack those rewards with those from your personal credit card.
Each of the personal cards, the Plus, Priority and Premier, function very similarly, only with different annual fees, rewards, and bonuses.
We’ve outlined the different options below so you can decide which is the best for you.
The most basic Rapid Rewards card from Southwest, the Plus has a $69 annual fee, with 3,000 bonus points on your cardmember anniversary (these don’t count toward Companion Status). It’s a no-frills cards with very few perks, and earns 1 point for every dollar spent, with 2 base points earned for every dollar earned booking through Southwest flights and select partner hotels and car rentals. You also earn 1 point for every $1 of a balance transfer in the first 90 days of a new account, up to $10,000. To qualify for Companion Pass would require an an annual spend of $50,000, or a balance transfer of $10,000 plus an additional spend $40,000.
The next tier up, the Premier card has an annual fee of $99, with 6,000 bonus points on your cardmember anniversary. It earns the same way as the Plus card, but has a balance transfer up to your first $15,000 (again in the first 90 days). It also allows you to earn tier qualifying points toward becoming an A-List member, which in addition to a host of benefits, gives you 25% earn boost on every Southwest flight booked. While A-List points are redeemable like all others, membership boosts do not count toward the Companion Pass threshold.
The highest class of the personal Southwest credit cards, the Priority card has a high annual fee of $149, but comes with $75 in annual travel credits and an additional 7,500 bonus points every cardmember anniversary – making up for the difference in fees from the Premier card. You also earn 20% back on all in-flight purchases and get four seat upgrades every calendar year. The downside is there is no ability to earn balance transfer points in the first 90 days of the account opening.
From a strictly earnings standpoint, the Premier card could be the most advantageous for reaching the Companion Pass threshold as its $15,000 in balance transfer means you could need to spend only $35,000 annually to reach Companion Pass status. But if you plan on holding onto the card for more than a year, it’s hard not to justify upgrading to the Priority card, which immediately makes up for the difference in sign-up bonus with the $75 in travel credits and additional 1,500 anniversary bonus points. The rewards will pay dividends that make it one of our most recommended cards if you plan on flying frequently with Southwest.
This is extremely important.
Qualifying or the Companion Pass is based on a 12 month calendar billing cycle, meaning to qualify, you need to hit 110,000 points in the same calendar year: January to December. If you get to 100,000 points on December 31, you will keep your points, however your point threshold will now reset, meaning you have to earn your way to Companion Pass all over again. This means if you have any big purchases, it makes sense to push them off until January, to start raking in the rewards at the start of the cycle.
The other thing to note is that Companion Pass kicks in from the moment you qualify, through the end of that year plus the whole next year. This is because Chase and Southwest understand most people won’t hit Companion Pass status until the end of the year, so you’re theoretically earning for the next year. This also means if you are able to hit 110,000 miles in May 2019, you will have Companion Pass for the remainder of 2019, plus all of 2020.
The earlier you qualify the better, and if you can pay for subscriptions, insurance, or other monthly purchases on an upfront lump sum, this could be a benefit to doing so.
Once you’ve selected the card that’s right for you, you still have roughly $50,000 to spend before you can qualify for the Companion Pass – not a negligible amount. To help dampen that wallet blow, there are a few tactics to use.
While Southwest’s policy forbids you from taking advantage of two sign-up offers in one 24 month period, this only applies to personal credit cards.
This means that in addition to the personal Rapid Rewards credit card of your choice, you can also sign up for the Southwest Rapid Rewards Premier Business Credit Card, which offers 60,000 points for just $3,000 in spending in the first three months of an account opening. You are able to roll up both points into one account toward the Companion Pass, meaning you can get 104,000 points for only $4,000 in spending. You’ll get the rest as you hit the $12,000 annual threshold on the personal card.
While balance transfers do not ordinarily count for points, an exception is made for the Plus and Premier cards during the first 90 days an account is open. Transfer an existing balance at a 1:1 point ratio (up to $10,000 or $15,000 depending on the card) to get points for purchases you already made.
While normally the point of a rewards card is to use the points instead of money, Southwest flights earn a minimum of 2x points on dollars spent on flights, with an maximum of 12x points on business select flights. This makes booking flights on your card worth it in the long run, and then redeeming the points for flights once you’ve hit Companion Pass status.
The Southwest partner network is rather large, including hotels chains such as Marriott, Hyatt, and Best Western, and virtually every major rental car provider. By booking with your Southwest card, you can earn 2x or more on your stays and 600 points for every rental car, which adds up if you’re traveling a lot for business.
This is an odd but lucrative little deal booster. If you spend $29.99 or more on 1-800-Flowers, you get 1,000 points using the code “R22”. If you’re close to hitting Companion Pass status, spending an extra $100 in flowers for your spouse’s birthday, Valentine’s Day, and anniversary gives you the equivalent amount of points as spending $3,000 elsewhere.
There are very few perks that pay out as long as or as much as the Companion Pass.
While getting it will require spending in the tens of thousands, it’s very much worth it for those who fly domestic frequently, particularly if you fly Southwest.
Being diligent about earning your 110,000 in points pays out, particularly if you are able to do so early in the year. With an up to 60,000-point sign-up offer for all of Southwest’s cards right now, you won’t find a better opportunity to try and get the holy grail of travel rewards.
Click here to learn about the Southwest Plus from Insider Picks’ partner: The Points Guy.
Source: Read Full Article