Southwest’s new Rapid Rewards program launched today. With the new program you earn points based on how much you spend on your airfare and the type of fare purchased. Not so good for folks who buy cheap tickets, but what does this mean for their credit card? I did some investigation into it and it’s actually pretty good!
If you still have credits in the old program you can transfer increments of 1,200 new points into 1 credit under the old rules.
The new points won’t ever expire as long as you have activity every 24 months.
With the new program you can redeem points for any seat on any flight. For the regular “wanna get away” fare it costs 60 points for each dollar of airfare. In practical terms this means for example:
A one-way LGA-BWI flight on 04/05 is $79.70 with tax.
It can also be bought for 4,140 points plus $2.50 tax.
So 4,140 points gets you a value of $77.20 ($79.70 airfare less the $2.50 tax required on the points ticket)
So each point is worth 1.865 cents (77.20/4,140), valid for redemption on all flights.
The new Southwest card comes with a 20,000 point signup bonus, which at 1.865 cents per point is worth $373 towards Southwest flights just for opening the card!
There is a $69 annual fee but they give 3,000 points every anniversary that you have the card, which is worth $55.95 towards Southwest flights and negates most of the annual fee!
You get 1 point per dollar on regular purchases, which is equal to a rebate of 1.865%.
You get 2 points per dollar on Southwest purchases, including hotel and car rentals via Southwest, which is equal to a rebate of 3.73%
Plus you get a free companion pass if you earn 110,000 points in a year from any source, including earnings from credit card bonuses and credit card spending! If you earn 110,000 Southwest points for example by 07/01/11 the pass will be good until 12/31/12. The pass allows you to bring a companion with you for free when you fly Southwest, even if you are flying on a free ticket!
Southwest flies to LaGaurdia and starts flying to Newark this month as well!
And as always, Southwest:
-Gives 2 free checked bags per passenger
-Does not charge change fees to switch your flight
-Does not charge a cancellation fee to cancel your flight (you will get Southwest credit for the full amount paid, even on non-refundable wanna get away fares)
-Refunds the fare difference if the price of your flight goes down after you buy it, just call to get the credit at any time!