• Chase just improved their sign up offer for their line of Southwest branded credit cards, for a limited time.
  • As a means of earning the very valuable Companion Pass, it’s worth a close look if you (or your companion) are eligible.
  • But even if you don’t earn the pass, you’re looking at ~$1K in net value by signing on.

If you follow this blog, you know a) I’m always on the lookout for a better deal and b) I’m a Southwest Airlines fan.

Specifically, the Southwest Companion Pass is for my money (and yours) the best perk available to the average traveler, bar none. Especially because you can earn the Pass without a lot of flying, mainly through spending options, including the credit cards. Here’s a good summary of what spending qualifies.

So when Chase coughs up a better introductory deal for one of their Southwest credit cards, I’m interested.

Background: I have one of their cards and used it to earn 2 years of the Companion Pass lately. But I’m tapped out: Chase doesn’t allow one person to apply for 2 Southwest branded cards (and earn lucrative upfront miles). I don’t fly often enough to earn the Pass that way.

Enter my wife, with clean credit record and ability to grab the latest deal.

This (limited time, thru 2/18/20) deal is intriguing: subject to spending minimums, you’ll earn 75K miles pretty quick. You need 125K to earn the Companion Pass for next year, so the card intro makes the hill a whole lot easier to climb.

But being me, I wondered: how good is the deal, really? Nothing like a quick spreadsheet to figure it out.

First, some assumptions.

  • I’ll assume my wife does the minimum to earn the upfront bonus by charging $6,000 in the first 5 months of owning the card.
  • The value of Southwest points is generally 1.5 cents per, according The Points Guy and other sources (jump here for a great rundown on all loyalty program values, updated monthly).
  • The “opportunity cost” of using the Southwest card – that is, the missed return of using another card for the same spending – is $.02, the going rate for the Citi Double Cash card, the current high bar in everyday earning for most people.

See the results here, for all 3 versions of Chase’s Southwest cards.

Some observations: You could earn greater value in the “miles earned” line by charging Southwest travel and related (@ $.03/point), but I assumed it was other spending (@ $.015). And it’s clear that the team behind the top end card – the Priority – worked this analysis too, by adding in the perks in the “Other” category to justify the higher upfront fee.

I should note that the Premier and Priority cards offer an annual mileage bonus, but only AFTER you renew for the following year. Coincidentally, the annual bonus almost exactly offsets your annual fee, but that shouldn’t be considered a return on this year’s commitment.

But in summary: pretty compelling – basically $1K in value before you actually use the Companion Pass next year. The Pass, with even moderate use, is easily worth thousands more.

Did I miss something? Let me know in the comments.