I receive compensation for content and many links on this blog. Citibank is an advertising partner of this site, as is American Express, Chase, Barclays and Capital One. Any opinions expressed in this post are my own, and have not been reviewed, approved, or endorsed by my advertising partners. I do not write about all credit cards that are available -- instead focusing on miles, points, and cash back (and currencies that can be converted into the same). Terms apply to the offers and benefits listed on this page.
Southwest’s business model has changed. They used to be a maverick, attracting loyal customers with a simple, bundled value proposition. An investor came along, looked at their balance sheet, and decided:
- They should be returning value to shareholders. In fact, they should be levering up the balance sheet to do that more. So Southwest is reducing capital investment, even in planes, and they’re buying back shares. Southwest announced on its earnings call on Thursday “a new $2 billion share repurchase program expected to be completed over a period of up to 2 years.”
- They’re underpeforming financially. Southwest hasn’t adapted to changing customer preferences (for premium, for international). We don’t actually know what they should be doing, but we need a plan. Let’s call it ‘copy everyone else, including airlines whose financial performance is worse than theirs – like American and JetBlue’.
With that business model change, their co-brand credit cards needed to change, too. It no longer made sense to offer rebates on spending for the first 15 boarding positions when Southwest is going to zone boarding like everyone else. And with seat fees and checked bag fees, the credit card was going to need to provide for those. We’ve known for awhile this was coming.
Southwest’s card partner is Chase. Chase has been following American Express in raising annual fees. With Chase’s recent product refreshes, like Reserve and United, the model has been to raise fees while adding a bunch of new merchant-funded offers to make it feel like there was a lot more value being packed in. So that’s what I figured would happen here. I was wrong.
But they’ve got great bonuses – so I do think it’s worth considering these cards, and using their benefits for the first year. And remember that earning the initial bonus offer, as well as spending on the card, counts towards a Companion Pass.
Current Bonus Offers
The Southwest Rapid Rewards® Priority Credit Card (See rates and fees) and Southwest Rapid Rewards® Plus Credit Card (See rates and fees) both have limited-time offers to earn 100,000 bonus points after spending $4,000 on purchases in the first 5 months from account opening.
The Southwest® Rapid Rewards® Performance Business Credit Card (See rates and fees) has an offer to earn 80,000 points after you spend $5,000 on purchases in the first 3 months from account opening.
And the Southwest Rapid Rewards® Premier Business Credit Card (See rates and fees) has an offer to earn 60,000 points after you spend $3,000 on purchases in the first 3 months your account is open.
Annual Fees Are Going Up, Without New Coupons To Justify It
I was partially right. We’re seeing higher annual fees. Those go up quite a lot, effective immediately for new card applications and starting with next year’s card renewal for existing cardmembers.
- Southwest Rapid Rewards Plus Card annual fee went up from $69 to $99
- Southwest Rapid Rewards Premier Card annual fee went up from $99 to $149
- Southwest Rapid Rewards Priority Card annual fee went up from $149 to $229
- Southwest Rapid Rewards Premier Business Card annual fee went up from $99 to $149
- Southwest Rapid Rewards Performance Business Card annual fee went up from $199 to $299
New Card Benefits To Match The ‘New’ Southwest
Southwest cards have new checked bag, boarding, and seat selection benefits. I’m a little bit surprised that all of the cards have the same checked bag benefit (e.g. that premium cards don’t come with a second bag) and the same boarding benefit (premium cards don’t offer earlier boarding than the base card).
- Cardmembers and up to eight companions on the same reservation get first checked bag free
- Cardmembers and up to eight companions on the same reservation get Group 5 boarding (and with 8 groups, I feel like it a premium card customer should do better here, but since the only benefit to early boarding will be not having to gate check a bag this is actually fine – why board earlier?)
The seating benefit is a bit more complex. Southwest will have standard seats, preferred seats and extra legroom seats. Each card offers seat benefits to the cardmember and up to 8 companions on the same reservation:
- The Plus card offers standard seats only for free, and only within 48 hours of travel. So it doesn’t get you more than the leftovers.
- The Premier and Premier Business Card offer standard and preferred seats free, also only within 48 hours of travel. More and slightly better leftovers.
- The premium Priority consumer card and Performance business card offer standard and preferred seats free at time of booking, and extra legroom seats if available 48 hours prior to departure.
I would much rather have seen ‘cardmembers get free seat assignments’ and premium cardmembers get premium (extra legroom) seat assignments. That would have helped with the value proposition for a product portfolio that in some cases has gotten over 50% more expensive. To give some credit, though, waived seat assignment fees aren’t something you usually see in an airline credit card.
Other Card Changes
They’ve eliminated foreign transaction fees on the base Southwest Plus Card. It earns 2x points on gas station and grocery purchases (up to $5,000 in combined purchases per year), and offers a 10% promo code for a flight discount each anniversary year, excluding basic economy fares – so you’re spending for a higher fare to take 10% off.
The Southwest Premier Card and Southwest Premier Business products earn 2x points on grocery and restaurant purchases (up to $8,000 in combined purchases per year), and offer a 15% promo code for a flight discount each anniversary year, excluding basic fares. Again, spend more to get a discount.
Meanwhile, the Priority Card and Performance Business Card each earn 2x points on gas station and restaurant purchases (uncapped), and 2,500 tier qualifying points toward A-List status for every $5,000 spent annually.
They all come with the same anniversary bonus points and 25% back on on inflight purchases (booze, basically, Southwest planes lack ovens in their galleys, though perhaps we’ll see more merchandising going forward).
Southwest Card Changes Overall
My mental model has been that you spend on a Southwest credit card if you want to earn a Companion Pass. Otherwise you get much better return on your spending elsewhere. That’s still true.
Previously the benefits of the card were worthwhile for frequent Southwest customers. I think now they’re probably worth it for frequent customers who don’t earn elite status. I don’t see a lot of value here for those earning status from their flying.
I don’t love these changes. I feel like they sort of made sense just adapting to the new status quo, but it stings that steep annual fee increases coming along with it… and without a lot of new additional value. I really feel like Chase and Southwest could have done better here, though things are moving quickly with changes at Southwest and I suppose they didn’t have as much runway as they often do with such product refreshes.
The Southwest Priority card is losing its $75 annual Southwest credit. The credit and the 7500 points used to cover the $149 annual fee. Too good to last.
This is just silly. They created new problems, then solve them by increasing fees. Pay more for less!
Back in the day, had the cards, did the companion pass, was useful; wouldn’t dare try that these days. Too much ‘turbulence’ with all these changes.
Maybe @Mike Hunt will get his wish and SWA will eventually install a First Class; or, @Tim Dunn will get his way, and they’ll have wide-bodies to Europe. Personally, I’m not holding breath.
The seating and baggage benefits are nearly useless to A-list members. If you have status, you don’t need a card, and vice versa. How does this make sense?
I still have banked credits and a few points, but I won’t renew the card unless I see some tral personal benefit. ATL-LGA is the only route I fly semi-often.
For those who had the previous cards and cancelled less that 2 years ago, are these considered new cards that we can get the sign up bonus for?
@Dr. c — Depends if you’re considering one of the personal cards, or the business card.
Terms state: “The product is not available to either (i) current Cardmembers of any Southwest Rapid Rewards® Credit Card, or (ii) previous Cardmembers of any Southwest Rapid Rewards Credit Card who received a new Cardmember bonus within the last 24 months.”
So, I’d wait the 24 months from the date you received the bonus, if you wanna actually get the bonus. Good luck!
Was considering whether to keep one of the top level cards (I have both) but the steep AF hikes made for an easy decision. Cancel both cards, and simply buy WGA+ fares on the rare occasions when I now fly WN.
Will also free up some credit lines at Chase so I can apply for new cards later this year.
@Boraxo — That’s a wise strategy. With all the changes, I’d pay-as-you-go and not be too invested in their cards or program. (Then again, if you follow @Tim Dunn’s optimism, we should all double-down… sky’s the limit!)
Priority card is A-List w/o same day standby, earning bonus, dedicated phone #, and priority check-in, no? Not worth the 2.5tqp/5k except for marginal spend to get A-List Preferred, no?
One more for the cancel or downgrade pile at AF time. My big stack of cards will be dwindling to just a stack with all the gouging and profiteering from the banks/card companies.
Just canceled my Southwest business card and downgraded my personal priority card to a plus. I would cancel both except that I still have a lot of rewards points so I will be flying Southwest sometime to use those up. I had planned to cancel one of them anyway, as we rarely fly Southwest anymore due to the family we visit moving to a Delta hub city. But I figured I’d better do it now before I forget. That will save me a nice chunk of money.