Friday, June 14, 2013

Deal Alert: Southwest Companion Pass

As you know, I love free stuff and I also love airline point programs, so travelling for free is really the best of both worlds.  I'm no expert on this, and usually rely on The Points Guy or Million Mile Secrets for my tips, but I here's one I wanted to pass on.

It's not for everyone, but if you are:

-planning on spending at least $200 on domestic flights with someone next year
-operate something that qualifies as a business (daycare, investment property, etc.)
-already will be spending $4000 on a credit card in the next 3 months

then keep reading.  Everyone else can probably stop reading now...

Southwest has what they call their "Companion Pass," which you earn if you get 110,000 miles points in your Rapid Rewards account (their frequent flyer program).  With the companion pass, any flight you book, you get an extra ticket for free.  You get this pass for the remainder of the year you hit the 110,000 miles, plus the entire following year.  You can only change who your companion is 3 or maybe 4 times while you have the pass, but if you do a lot of travel on Southwest with one primary companion, this could be a good deal.

"How do I get 110,000 reward points?" you ask. There is a limited time offer from Chase to sign up for their Southwest personal and business cards each with a 50,000 point bonus when you spend $2000 in the first 3 months.  So if you get both cards and meet the spending minimum, you'd get 104,000 points and only need to get 6000 more points (either by spending $6k or a few other ways outlined really well here and here before the end of the year).

There are 4 cards total Personal Premier, Personal Plus, Business Premier and Business Plus.  The Premier has higher annual fees ($99 vs $69 which are not waived for the first year), but you also get more points at your annual "bonus".  The best move would be to apply for one personal and one business card if you have something that could qualify as a business.  You could try to get both personal ones, but you might want to call Chase to find out since I'm just not sure if that'd work.

Update: I've just hear of people who get approved for both personal cards, the premier and plus, so sounds like you don't even need a business or business card to cash in on this deal, which is really exciting.

Apply for both on the same day so only one inquiry shows up on your credit report.  You'll probably have to call the reconsideration line for the second application.  (Speaking of credit scores, you could always close these cards next year before the next annual fee is due.  As long as you have another card you're keeping open that you've had a few years, it won't affect your credit score much.)

Here's is a good write up with all the details explained:

The posts I linked to were written when this deal was offered earlier this year, but here are links to the current offers:

So with 110,000 Rapid Reward points, that's over $1800 to use for Southwest flights for you, all of which you get to bring someone for free during the year your companion pass is valid, which makes it potentially up to $3600 worth of flights - really $3400 once you subtract the annual fee.  Not bad!

The fees aren't waived the first year like other offers, so if you aren't going to be spending more than $200 a person on travel in the next year, it's probably not worth it.  Another thing is Southwest mostly flies domestic.  Because it's already June, it'd probably take a few months for all the points to hit your account, so you could always take a gamble and hold out until next Jan/Feb and seeing if they run the offer then would give you the maximum use.  If you aren't going to be traveling or spending the minimum amounts would be hard or you just don't like keeping track of all the points, then this probably isn't the best deal.  We hemmed and hawed over this deal earlier this year and at the time it didn't seem like the best option for us.  It is a good strategy though, so I thought I'd pass on the basics.  And if anyone is still reading after all these numbers and links, then I think you and I are the only ones.

(Disclaimer: Some of the sites I linked to use affiliate links.  I don't have any relationship with Chase or Southwest though, so I'm just sharing this because it's a good deal, not because I get anything.)

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