The Southwest Companion Pass is the holy grail of credit card rewards. It is one of, if not the most, lucrative pieces in the credit card game. Most importantly, this holy grail is actually attainable. I’ll show you how we earned the pass, flew 42 flights for $252, and how you can too.
What is the Southwest Companion Pass
The Southwest Companion Pass allows a designated companion to fly with you for free on any Southwest flight. And by any flight, I really mean any flight. It doesn’t matter how you booked your ticket – cash, points, voucher – your companion can fly for free. You could even take a flight every single day and your companion could fly with you on every single flight.
What does free mean?
As we’ve been accustomed to, free doesn’t always mean free. In this case, you would still have to pay the government-imposed September 11th security fee of $5.60 per one-way trip. Southwest displays this prominently when you book award travel and there are no other fees. A round-trip ticket for your companion would cost a grand total of $11.20. Not too shabby.
How Long is the Companion Pass Good For?
When you earn the pass, it is good for the remainder of the year you earn it as well as the entire following year. The goal then is to earn it as early as possible in the calendar in order to maximize the value, which means right now is the optimal time to make plans to get it!
Can you Change Your Companion?
Once you earn the pass and designate a companion, you have the option of changing your designated companion three more times. This gives flexibility in case your relationship status changes or if you want to take a trip or two with someone other than your normal companion. For instance, your husband could be your initial designated companion. Months later you switch it to your mother to take a trip together, then do the same with your sister, and then change it back to your husband for the whole second year.
How We Did It
In 2015, my now wife and I moved away from our family and friends in the DC and Philadelphia metro areas down to Florida. We’re at that stage in our lives when seemingly all of our friends are getting married, so we had a lot of trips on the docket for 2016. We knew it would be very expensive if were going to attend all of these events, so in preparation for that I planned to earn the Southwest Companion Pass at the very beginning of 2016.
Earning the Companion Pass
As you’ll see in the next section, the easiest way to earn the pass is by earning 110,000 Rapid Rewards points in a single calendar year. I applied for the Southwest Rapid Rewards Premier Business credit card the very last week of December 2015 and then applied for the Southwest Rapid Rewards Premier personal credit card the first week of January. Each sign-up bonus was worth 50,000 Rapid Rewards points after a minimum spending of $2,000, which means we needed to put 2k of spending on each card plus 6k of additional spending.
At the time, my wife had another credit card that we were working to hit the minimum spending on, so in order to hit the total $10,000 of spending needed on the Southwest cards, I opted to pay my mortgage twice and our rent once using the service Plastiq. Plastiq charges a 2.5% fee, but I knew that the value I was going to receive would be more than 3%. It was a net win in terms of value and an even bigger win in terms of time, enabling us to earn the Southwest Companion pass in March.
Prices on Southwest flights are cheaper the further in advance you book them and then slowly increase as it gets closer to the flight dates. Southwest allows you to change or cancel your flight at no cost so it’s no risk to book as soon as possible. Plus, if the price drops at any point you can re-book the flight and get the difference back! Southwest has periodic sales so I was able to take advantage of this a couple times.
You don’t have to wait until you earn the pass to start booking flights. You always have to purchase the primary ticket first before adding the companion, so I started booking the flights as soon as I had available points and then added my wife once we earned the companion pass. One of the best parts about earning the Southwest Companion Pass by earning 110,000 points is that now you have all these points to book travel!
When you book flights using points, you still have to pay the mandatory $5.60 fee. For example, I can book a roundtrip flight for 14,000 points and $11.20 and then add my wife for an additional $11.20. A roundtrip ticket for two people totals $22.40 plus the points. Typically, the airport parking or Uber to or from the airport cost us more than the actual flights themselves.
Together we flew 42 one-way Southwest flights this year. Out of the 42 flights, we used the Southwest Companion Pass for 17 of them. We didn’t purchase a single ticket with cash. We used points for all of them except one solo roundtrip flight where we used a LUV voucher (which we got when one flight was cancelled). That flight ended up being the most expensive at $28.20.
The total out-of-pocket cost for all 42 tickets was $252.20. If we had paid full price for all these tickets, the total cost would’ve been $5,579.56. This is based on the cost at the time of booking, which was typically months in advance. If I hadn’t booked the flights as early, the value received would be even higher, but so would the Rapid Rewards points used to redeem them.
From the chart above, you can see we earned a total award value of$5,327.36, but there are a couple costs that must also be considered. Each credit card has an annual fee of $99 that is not waived for the first year. In my case, I also used the service Plastiq to put almost 6k of spending on the Southwest credit cards — a cost of $140.83.
Altogether we received about $5k of award travel this year on Southwest! On the total investment of $591.03, that’s an ROI of 844%!
How You Can Get Southwest Companion Pass
There are two ways you can earn the Southwest Companion Pass:
- Take 100 qualifying flights in a year
- Earn 110,000 Rapid Rewards points in a single calendar year
If you are like most people, you’re probably not going to do Option 1. That leaves us with Option 2. The easiest way to earn 110,000 points is by getting two Southwest credit cards which have 50,000 point sign-up bonuses. The sign-up bonuses are not always 50,000 points so it’s important to take advantage of the offers when they are available.
Here are the available credit cards:
|Credit Card||Sign-Up Bonus||Minimum Spending||Annual Fee||Anniversary Points|
|Southwest Rapid Rewards Premier||40,000||$2,000||$99||6,000|
|Southwest Rapid Rewards Premier Business||50,000||$2,000||$99||6,000|
|Southwest Rapid Rewards Plus||50,000||$2,000||$69||3,000|
It is possible to get the two personal credit cards but it’s better to get one personal and one business card if you can.
Right now the Premier Business card and the Plus personal credit card have 50k sign-up bonuses available to everyone. The differences between the Premier and Plus are the annual fees and the anniversary bonus points. With the Premier, you receive 6,000 points each year at a cost of $99 while with the Plus you receive 3,000 points at a cost of $69. If you’re thinking long-term, I would recommend the Premier as the better value.
The sign-up bonus offer on the Southwest Rapid Rewards Premier card to the public is currently 40,000 points but you can actually get the 50,000 bonus by referral.
If you are interested in applying for the Southwest Rapid Rewards Premier card, contact me and I will refer you for the higher bonus.
Can You Get a Business Credit Card?
You may be thinking that you don’t own a company so you won’t be able to get the business credit card. However, there’s a good chance you may already have something that qualifies as a small business! For instance, if you provide a service such as tutoring, yoga lessons, day care, or freelance photography, etc. or sell a product on Ebay, Craigslist, or Amazon, you could qualify for a small business card. If you’re making income in some way that’s not on a W-2, there’s a good chance you could qualify.
It must be a venture that is for-profit, but that doesn’t mean it even has to have made profits yet. I have a start-up that has incurred costs but has yet to generate any revenue. The company has a registered LLC with an EIN number and a website. Having all of these improve your chances of getting approved, but even if you don’t, you can apply as a sole proprietorship using your social security number.
It’s smarter to apply for the business card first. Just in case you get denied, you at least won’t be stuck with the personal card and be $60,000 in spending away from the Companion Pass. Of course, the card is still valuable in its own right.
Remember Chase 5/24 Rule
Chase is more strict than any other bank when it comes to credit card approvals. If you’ve opened 5 or more credit cards in the last 24 months, Chase will most likely deny your application. And this strategy involves getting two. If you opened three or more cards in the past two years, think about whether you might need to wait a little bit for an application to roll off or if your spouse/significant other could get it instead. Just make sure whoever is going to do it gets both credit cards.
Hitting the $10k in Spending
The most important thing to keep in mind: don’t buy things to hit the $10,000 in spending that you wouldn’t buy anyways. If you splurge and spend $7,000 on electronics and clothes, that defeats the whole purpose of getting the Southwest Companion Pass — value.
Here are some tricks to speed up the process:
Pay bills with credit cards.
Some bills you can pay directly with your credit card at no additional cost, such as phone, cable/internet, insurance, and gym memberships. You should always be paying for these with credit cards, but switch to the Southwest cards until you earn the Companion Pass.
Pay bills using Plastiq or ChargeSmart.
For the bills you can’t pay directly with a credit card, such as mortgages, rent, car payments, etc., you can use a service that charges a fee (~2.5%) to pay them indirectly and hit the minimum spending quickly.
You may have recurring monthly costs that you can pay in advance, such as insurance. Pay the next 6 months instead of just 1.
Join Rapid Rewards Dining.
You can earn an easy 1,000 Rapid Rewards points plus more when you join and dine at a participating restaurant.
Use Rapid Rewards Shopping.
Whenever you make online purchases, you can earn more points by clicking through a shopping portal for purchases you’d be making anyway. For purchases you make in-store, consider making them online instead.
Transfer hotel points.
Southwest is a transfer partner of Chase Ultimate Rewards but transferring those points do not count towards earning the Companion Pass. But if you transfer to Hyatt first and then transfer to Southwest — they do! The downside is that you lose value (10,000 Hyatt points => 4,800 Southwest points). There are other hotels you can transfer from as well, so if you have points that are just sitting there, they could be put to better use.
Out of the $10,000, at least $2,000 must be done on each card to hit their respective minimum spending. All 110,000 points have to be earned in the same calendar year, so if you get any card before year-end, make sure that you don’t cross the $2,000 threshold until 2017.
Southwest offers great value on domestic award travel. When you combine that with the Southwest Companion Pass, no other credit card perk offers as much potential value. We gained approximately $5,000 of net value in a period of only 9 months. Now we have the full 2017 calendar year to gain even more value. We took 17 flights in 2016 where we utilized the Companion Pass. Depending on your travel habits, you may travel more frequently and be able to gain significantly more value.
Since Southwest is a transfer partner of Chase Ultimate Rewards, you also have a fantastic way to keep feeding the system. With a card such as the Chase Sapphire Reserve, you can earn triple points on all travel and dining and then transfer those points to Southwest. The Southwest Companion Pass is one of the best ways to maximize value on Chase Ultimate Rewards points.
The start of the new year is the optimal time to earn the Southwest Companion Pass. With the 110,000 points alone, you get at least $3,700 worth of companion travel. Think about how much money the Companion Pass could save you on travel the next two years. Or if you don’t typically have the budget for traveling, think about where the Southwest Companion Pass could take you.