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Southwest Card Flies Another Year
Dec. 1st, 2023 11:04 amI recently passed my second anniversary with the Chase Southwest Rapid Rewards Priority credit card. That means it's time to check the score— both to see how well I utilized the benefits in this past year as well as to gauge whether to keep it for another year.
When I tallied the score at my 1st anniversary a year ago my win was a whopping $2,200 and change. I knew as I renewed it— paying a $149 annual fee, BTW— that my score for year 2 would be way smaller. Still, I forecast then that even with the fee I could still net at least $150 of benefits. Let's see how I did.
One, the points are worth it. I currently value Southwest points at 2 cents per point (cpp). That's a blended figure reflecting the value of the Companion Pass I've had for several years. The card pays 1 point/dollar on base spend, 2 points/dollar on a few categories where I average hundreds of dollar per month spent, and 3x on Southwest Airlines purchases.
Two, there were several worthwhile promotions with this card. There were a few quarters in which Southwest & Chase offered an additional points multiplier for meeting certain spending targets. There was also a bonus of 20,000 points for referring a friend who opens a card— which I hit twice this year. And there's a 7,500 point renewal bonus. Together with points from ordinary spend I earned a total of 118,000 points this year. At $0.02 apiece they're worth $2,360. At this level it's like earning 5% back on my charges. That's why I've hit this card so hard instead of using my 2% cash-back cards.
Three, hitting this card hard helped me renew Companion Pass, keeping the vaue of all my Southwest points high.
Four, there were several cash-back incentives this year. I tallied about $140 from them.
Adding these together I get a gross win of $2,500 from this card. Holy Shit! I don't even score that well with most first-year cards. Of course, the net value isn't so high. There's an annual fee of $149 to subtract from the win, as well as what I call the opportunity cost of not using one of my no-fee 2% cash-back cards. Subtracting those costs yields a net win of $1,271, which— Holy Shit, that's still amazing!
As always when an annual fee hits, it's worth calling the credit card company to see if a retention offer is available to offset it. An offer is not always available, and sometimes when it is it's much smaller than the size of the fee, but this is one of those circumstances where it doesn't hurt to ask. This time when I asked, the customer service agent immediately offered me $150 to renew. That's... actually more than the $149 fee! And there were no strings attached.
I had a sense they might come through with a good offer, as a customer who charges $47k in a year is a desirable customer.
But still, wow. A 3-minute call saved me $150. It's like that slogan from Geico insurance— except when I actually called Geico months ago they wasted over an hour of my time and saved me absolutely nothing.
So, with effectively no annual fee I'll keep this card for another year.
When I tallied the score at my 1st anniversary a year ago my win was a whopping $2,200 and change. I knew as I renewed it— paying a $149 annual fee, BTW— that my score for year 2 would be way smaller. Still, I forecast then that even with the fee I could still net at least $150 of benefits. Let's see how I did.Charges Galore, Points Galore
I charged a whopping $47,000 to this card over 12 months. Why so much? A few reasons, actually.One, the points are worth it. I currently value Southwest points at 2 cents per point (cpp). That's a blended figure reflecting the value of the Companion Pass I've had for several years. The card pays 1 point/dollar on base spend, 2 points/dollar on a few categories where I average hundreds of dollar per month spent, and 3x on Southwest Airlines purchases.
Two, there were several worthwhile promotions with this card. There were a few quarters in which Southwest & Chase offered an additional points multiplier for meeting certain spending targets. There was also a bonus of 20,000 points for referring a friend who opens a card— which I hit twice this year. And there's a 7,500 point renewal bonus. Together with points from ordinary spend I earned a total of 118,000 points this year. At $0.02 apiece they're worth $2,360. At this level it's like earning 5% back on my charges. That's why I've hit this card so hard instead of using my 2% cash-back cards.
Three, hitting this card hard helped me renew Companion Pass, keeping the vaue of all my Southwest points high.
Four, there were several cash-back incentives this year. I tallied about $140 from them.
Adding these together I get a gross win of $2,500 from this card. Holy Shit! I don't even score that well with most first-year cards. Of course, the net value isn't so high. There's an annual fee of $149 to subtract from the win, as well as what I call the opportunity cost of not using one of my no-fee 2% cash-back cards. Subtracting those costs yields a net win of $1,271, which— Holy Shit, that's still amazing!
A Few Minutes Saved $150
As amazing as my score for the past year was, I was still inclined to cancel it for the coming year. After hitting the card hard the past 12 months and earning so many points I really want to focus on spending my Southwest points instead of piling up even more of them. Plus, those promotions that helped me boost my score are drying up. And there's that dratted $149 annual fee. ...Or is there?As always when an annual fee hits, it's worth calling the credit card company to see if a retention offer is available to offset it. An offer is not always available, and sometimes when it is it's much smaller than the size of the fee, but this is one of those circumstances where it doesn't hurt to ask. This time when I asked, the customer service agent immediately offered me $150 to renew. That's... actually more than the $149 fee! And there were no strings attached.
I had a sense they might come through with a good offer, as a customer who charges $47k in a year is a desirable customer.
But still, wow. A 3-minute call saved me $150. It's like that slogan from Geico insurance— except when I actually called Geico months ago they wasted over an hour of my time and saved me absolutely nothing.
So, with effectively no annual fee I'll keep this card for another year.
