I try not to post much about credit cards since a bazillion other blogs get paid to do that. This credit card bonus, 40,000 Southwest points, has motivated me to say something.
Yes, only 40,000 Southwest points. Still nothing to scoff at, those are worth about $800~ in airfare. Southwest points are redeemed based on the cost of the ticket, not the start and end point. If your desired flight is $97, you’ll need about 5,000 points. Pretty simple, right?
As you can see, a flight that is priced at $97 will require you to redeem 4,968 Southwest points. That is almost two cents per point in value, making this 40,000 point bonus worth up to $800!
The real reason
There is a bigger reason I am talking about this offer and it isn’t the points. In this case, Chase requires that you spend just $1,000 to receive the 40k bonus points. The higher sign-up bonus offering 50,000 points will require you to spend $2,000 in 90 days.
That difference of $1,000 in spend is a big chunk for some people and can be a major deterrent. I know, because I’ve been told first-hand. Requiring only $1,000 points in 90 days means you’ll need to spend just $333 per month.
Your statement closing date is typically 30 days after your card account is opened. If you complete your minimum spend 3-4 days before the statement closes, the points will post the following morning in your Southwest account and be ready for use. That means you can have the 40,000 points and start redeeming them in as little as 31 days from now.
Pay your bills with a credit card
I do not recommend spending on random things to meet your minimum spend. We are trying to work towards “free” travel, so blowing money to get free travel is counterproductive. Also, make sure to pay your statement balance off in-full by the due date (usually 21 days after your statement closes) to avoid paying any interest fees.
I do recommend using Plastiq.com to pay important bills using your credit card. You can sign up using my link to earn $400 of “fee free” credit card bill pay. The typical fee rate is about 2%-2.5% when paying bills with Plastiq. You can pay most any bill like your mortgage, car payment, rent to a landlord, student loan, etc.
If you end up paying the full $1,000 in bills using Plastiq, you’ll only have to pay the 2.5% fee on $600 of that spend. ($400 is free for new users by clicking this link, until April, 18th) $600 x .025 = $15 in fees.
If you add in the fact that you have an annual fee of $99, you are looking at $114 total in fees to receive $800 in Southwest Airfare. (net gain of $686)
For those working towards Southwest Companion Pass (which these 40,000 points DO COUNT towards), that could turn in $1,600 in Southwest airfare value, two-for-one travel.
Remember, you do not have to use all your points before closing the card and avoiding the annual fee in the second year. You can cancel this card 12 months from now and you will keep any remaining points. (the case with all co-branded cards) You can even wait until you receive the 6,000 anniversary point bonus and cancel avoiding the annual fee. (though some might feel that borders on unethical, I’ll leave that up to you)
Do not apply if either of these apply to you:
You have signed up for 5 or more credit cards in the last 24 months. If Chase can see a credit card on your credit report, that will count towards the “5 card rule”. This is known as Chase’s 5/24 rule, so don’t bother applying for this card if that applies to you.
If you have earned the bonus from this Southwest Premier credit card in the last 24 months, don’t apply. The 24 month clock starts from the day the points were posted to your Southwest account, typically the day after the statement close date where you met the minimum spend. If it has been more than 24 months, you are in the clear to receive this bonus again.
Note, if you have received the Premier card bonus in the last 24 months, you can still earn the bonus on this Southwest Plus credit card. They are both considered separate cards so the 24 month clocks are independent.