Domestic travel is now our jam (and, is the Southwest Companion Pass worth it?)
Well friends, it is hard to believe the summer is almost over! This blog has been a bit silent since our last big adventure abroad as our schedules ramped up – I truly felt that we hit the jackpot on timing with that trip, back in the spring when hopes of squelching the pandemic were high and the delta variant wasn’t dominating the daily news.
Despite the ongoing pandemic, the wildfire smoke, our expanding sweat pant collection, and moments spend wondering what, really, is cheugy, we have had a busy fun-filled summer catching up with friends and family, hiking, gardening, and cuddling our pandemic puppy who is now no longer a puppy. And yes, we have continued forth with domestic travel – N95s and goggles and all.
The Southwest Companion Pass was always a “holy grail” of travel hacking wins for us, but had not been obtainable until January 2021. Having not applied for any cards in 2020, I was finally beyond Chase’s 5/24 rule and was able to apply for a new Chase card, so with the anticipation we might be limited to domestic travel for 2021, I applied for the Southwest Priority credit card and took advantage of the sign on bonus which not only included 50,000 miles but a companion pass for the remainder of 2021. We were in luck: our companion pass credited on March 15, right after almost 3 feet of snow had dumped upon our region and effectively shut down what little of our world was back to normal operations (sigh…such is 2021). As soon as our road was plowed out, we booked last minute tickets to Las Vegas so that we could #WFH in sunshine and give our sore backs a break from shoveling. Last minute tickets to Vegas in March are not cheap – but with the companion pass and our newly amassed points, the trip was very reasonable; companions pay only $5.60 each way in taxes and fees. It’s been a game changer.
Since then, we have been able to use our companion pass to travel about once per month: more trips to Vegas to visit family, a trip to Seattle to visit family, a long weekend in Napa visiting friends, and a long weekend for a 40th birthday party (although if you ask me, pandemic birthdays don’t count – and I still haven’t resumed tallying). We will use the Companion Pass this fall for more trips to Vegas, a work conference, and for a postponed family reunion in Hawaii – and we can even do some island hopping thanks to Southwest’s intra-island flights. Which made me ask: is it worth it for us to try to obtain the Southwest Companion Pass each year going forward?
To obtain the Southwest Companion Pass, one must fly 100 qualifying one-way flights (not happening for us) or earn 125,000 “qualifying points” in a calendar year. Once you meet the 125,000 point threshold, you earn the Companion Pass for the remainder of the current year and the entire following year – which means, with careful planning, you could get nearly two years of use out of one companion pass if you time it well. However, that is a lot of points to earn (or flights to take). To make it more challenging, the Southwest credit cards don’t offer bonus categories for spend except a 2X bonus with flights purchased through Southwest (an exception right now if you apply is that dining earns 3X points for the first year of card ownership, but this is not typical for the card). There are a few other ways to earn bonus points, such as using the Southwest shopping portal, Rapid Rewards Dining, booking hotels through RocketMiles, or referral bonuses (hey, friends!!). Still…125,000 is a lot of points. Wouldn’t we be better off maintaining our current strategy of using the Chase Trifecta? With the Chase trifecta, we earn 3X miles for dining and travel on our Chase Sapphire Reserve, 1.5X points on everyday spend with Chase Freedom Unlimited, and 5X on Amazon and other gift cards which we purchase at office supply stores with our Chase Ink. And, we can always transfer those miles directly to Southwest, or book through Ultimate Rewards (which is a better deal, but must be done by phone).
Enter: my trusty Excel spreadsheet. I budgeted out what we might spend on a year of Southwest flights (accounting for the fact that we might use our earned Southwest points to pay for some of our travel), and our anticipated non-bonus category spend for the year that we could potentially place on our Southwest card. I compared this to what we would earn putting our spend on the Chase Freedom Unlimited instead. I expected the Chase Freedom Unlimited would come out as the clear winner.
The results, I have to admit, surprised me a bit. Yes, the Chase Freedom Unlimited earned more points total than using a Southwest credit card. However, factoring in the money earned from the free companion flights coupled with the value of the points earned from the spend put on the credit card put the two pretty close. Rapid Rewards have been devalued over the years, so 1 RR is only worth $0.014, meaning 125,000 points earned is worth a measly $1,750 in flights… as compared to Chase, where spending $125,000 would actually earn $3,000 worth of points assuming I can redeem them at the current valuation of $0.016 through Chase Ultimate Rewards by transferring them to my Chase Sapphire Reserve card. However, If I assume I might spend $5,000 in flights on my Southwest card (if I use only Southwest for all of my work and leisure travel), and redeem that $1750 in points for some additional travel – and bring my companion on every flight, then I might earn a whopping $8500 in value from both the Companion Pass value ($6,750) and the redemption of Southwest points ($1750). Spend over $7000 in flights – which someone who either travels a lot for work or plans for an epic splurge year of travel might easily do – and you’re looking at over $10,000 in value.
That being said, Chase Ultimate Rewards miles can have higher value depending on your redemption. If your goal is an international business class flight, those miles could easily be worth double when transferred to one of the Chase Ultimate Rewards partners – and one could argue arriving at an international destination well rested might be totally worth it. I also find the 125,000 point threshold on Southwest a tough one to master without a boost from a sign on bonus and without getting extremely creative. Some big ticket items we could opt to pay by credit card, like property taxes or personal taxes, come with a transaction fee, which would subsequently eat away at the value of the pass.
Bottom line: You are better off using Chase Ultimate Rewards or American Express if you don’t put a lot of spend on a credit card, if you can’t commit to a single airline, you despise economy, and if the bulk of your travel is international. It is worth aiming for the Southwest Companion Pass if:
- You can earn a sign on bonus or two (typically as high as 50,000-65,000 miles) which will put the 125,000 threshold a lot closer (best bet: apply for the card in October or November so the closing date of the credit card bill of when you will meet your minimum spend for the sign on bonus is in January of the following year);
- You primarily fly domestically and could use Southwest almost exclusively… and happen to have a lot of spend you can put on the card (perhaps through reimbursed work expenses or small business expenses);
- You fly frequently for work and can utilize Southwest for your travel – especially if you are able to book your own flights and hotels.
I am pretty grateful we were able to utilize the Southwest Companion Pass this year to catch up with all the friends and family we hadn’t seen in over a year. Since we anticipate a lot of domestic travel in 2022 as well (will this pandemic ever end?!?!), and already have a great head start on a 2022 Companion Pass thanks to the sign on bonus, we will strategically work for regaining it for 2022. Beyond that, however, we will be back to earning on our Chase Trifecta.
