New Southwest Cards Where Your Annual Fee Pays For Itself


The annual fee, like all fees, are to be despised.   Yet at the same time, there are some annual fees that will actually pay for themselves.   Let’s take a look at the Southwest Visa credit card from Chase.    Under their old system, you received a mere 2 rapid rewards points when you paid their $59 annual fee.   Most people would value those points at around $40, but only if you were eventually attained an award and you were able to use it for a more expensive ticket.    So the annual fee paid for something, but it’s value certainly was variable.

Under the new Rapid Rewards system, we will be earning points that can be directly redeemed for airfare at a fixed point to dollar ratio.    Furthermore, when you renew your Chase Rapid Rewards Visa card, you will get 3,000 of their new Rapid Rewards points.   That translates into $50 towards your next award.    In that sense, you are only out $9.

New Southwest Chase Visa Cards

Along with the new program, they are offering new Visa Cards from Chase.   The full details are not out yet, but they have released that there will be a Rapid Rewards Plus card with a $69 annual fee and a Premier card with a $99 annual fee.    The plus card only gets you 3,000 points at renewal, so there must be something else you get for your extra $10 annual fee.   The Premier card is where it gets interesting. It offers 6,000 points at renewal.   So you are actually getting your annual fee back as a credit towards a future flight.

One thing about their new system is that you will have to be a Southwest Visa card holder to take advantage of their international award redemption options.   Personally, I am a bit skeptical that these options will provide good value, but I guess we will have to see.  I am sure there will be other perks available only to their Visa card holders as well.

Also not clear is what will happen if you want to upgrade your card.    I suppose they might make you pay the difference in annual fee, like Amex does.   Another option might be that you could just sign up for the new card and cancel the old.   In that way, you would get the nice sign up bonus and avoid the annual fee for another year.    I will be looking closely to see if people are able to do that.

Any time you have to pay an annual fee, you have to ask yourself if the fee is worth it.  If your card is like this new Southwest Premier Visa, it might actually save you money to pay the higher annual fee than the lower one.    This is just another trick that will separate advanced credit card users (who read this blog), from the rest of world.

Southwest Airlines Rapid Rewards® Credit Card from Chase

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One Response to “New Southwest Cards Where Your Annual Fee Pays For Itself”

  1. Peg Says:

    Is the new Southwest card’s annual fee waived for the first year? I couldn’t find anything about that on the website, so I’ve held off on applying…

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