Saving Money with Southwest Airlines

I love saving money with Southwest Airlines. Over the past five years, I’ve been able to supplement my travel budget by using airline miles and credit card points to offset many of the costs involved in hopping around the world. In that time, I’ve booked award flights through Delta, United, American, and Air France among others, but no airline program has come close to having the impact of Southwest’s Rapid Rewards Program. 

Southwest Airlines in considered a low cost carrier (LCC) in that it doesn’t offer premium seats or airport lounges, but do not be confuse it with an ultra-low cost carrier (ULCC) like Spirit or Frontier. So-called ULCCs generally offer the cheapest seats around but have poorer performances and a habit of nickel and diming their passengers with fees for everything from bringing a carry-on to printing out a boarding pass. Southwest flights, on the other hand, often have a cost point similar to the legacy carriers but come with a slew of added benefits like fee-free checked bags and staff who are, on the whole, more pleasant to deal with than those at United and American.  

E’s first flight was on Southwest and the pilot give her a pin.

Three things make Southwest Airlines a game changer for us, though. First, the Southwest Companion Pass has allowed us to essentially travel with two-for-one tickets for the past four years. Second, the airline’s generous cancelation policy has allowed us to book and rebook speculative trips without the threat of a cancelation penalty. Third, the process for booking award trips is straightforward and predictable. 

#1 The Southwest Companion Pass Rocks

If you’ve never heard of the Southwest Companion Pass, it’s time to wise up. I consider this to be the best value out there in travel hacking.

What is the Southwest Companion Pass?

In essence, a Companion Pass is a perk that allows you to book any Southwest flight and then get a second ticket for a designated companion more or less for free! You will need to pay some taxes and fees for the companion ticket, which range from $11.20 for a round trip domestic flight to up to $150 for some round trip international flights, but still, it’s an amazing deal. The pass is valid for the calendar year that you earn it and the following year. You can change your designated companion up to three times per year, and you can use the pass as many times as you’d like! 

How to Get a Southwest Companion Pass

There are two ways to get a Companion Pass. For the road warriors out there, you can earn it by taking 100 one-way flights. For the rest of us, you can score a pass by earning 125,000 eligible Rapid Rewards Points within a calendar year. That may seem like a lot of points, but the amazing thing is that points earned on Chase’s Southwest-branded credit cards count toward the total. And in case you were wondering, you don’t have to “buy” the pass with points. You just receive it once you hit the point threshold. That means that you will not only have this amazing perk for BOGO tickets, but you’ll also be sitting on a cache of Rapid Rewards points worth approximately $1900 in Southwest flights. 

The Chase Personal Cards

The standard sign-up offer on the personal versions of the Southwest Cards is 40,000 Rapid Reward points after spending $1,000 on the card within three months of opening it. It is often possible to find a 50,000-point version of the offer if you sign up during a flight while connected to the plane’s wifi, and every so often there is an elevated public offer on the card. Just note the fine print. You’re only eligible for this card if you don’t currently have a personal Chase Southwest Card and have not received a new member bonus within the past 24 months. 

After earning your sign-bonus you should have at least 41,000 Rapid Rewards in your account. That will have 84K points (or less) shy of the Companion Pass goal. There are three versions of the personal cards, each with its own benefits and annual fees, but they typically all offer the same sign-up bonus. I’d suggest going with either the “Plus” card because it has the lowest annual fees or the “Priority” card because it comes with benefits that mostly offset the fee. If you apply for a Southwest card through this link, then I will even get a small referral bonus, so we can help each other out. Just make sure that you create a Rapid Rewards account to link your card to.

The Chase Business Cards

So how do you get across the finish line? Well you can consider applying for a Chase Southwest Business Card. There are two versions of the business card, which have standard sign-up bonuses of 60K points and 70K points respectively. Since the Companion pass is the goal, I’d recommend going with the Performance Business Card due to the higher bonus. That card typically requires spending $5K to get the bonus. Just like the personal cards, the business cards occasionally offer higher sign-up bonuses though they typically come with substantially higher spending requirements.

I’ve found that it’s fairly easy to be approved for the business cards by applying as a sole proprietor and using my social security number instead of an employer ID. You just need to be able to point to some form of self-employment. I do a little bit of consulting work, so I typically claim that on my business card applications, but I have also applied for a card using this very blog as a justification. I know other people who occasionally sell things on Craigslist or eBay and get approved for a card using that justification.

The important thing is to (1) apply as a sole proprietor, (2) use your social security number instead of an employer ID, and (3) be honest. There is a decent chance you can be approved if you personally look good on paper even if you list $0 as the current income of your business. I did just that when referencing this blog. Just like the personal cards, if you apply through my link then I get a referral bonus, so please consider helping me out. 

Topping Off Your Points

Let’s be conservative and assume that you signed up for your cards during a standard promotion period, spent the minimum amount on the cards to earn the sign-up bonus, and only earned one additional point per dollar spent on the cards (you get two or more points per dollar spent with Southwest or one of their partners.) You have now opened one personal card and one business card and spent a combined $6,000 on those cards. Through the cards you earned 40K points from the personal card and 70K points from the business card. You also have a combined 6K in points earned through general spending. That brings you to a total of 116K points, only 9K points away from the Companion Pass threshold.

The hard work is done, now you just need to get a few more points before the end of the calendar year to get over the finish line. Those 9K in points can come from additional credit card spending, credit card referral bonuses, base points earned with Rapid Reward partners and/or points earned the traditional way by actually flying on Southwest Airlines.

Our Experience with the Southwest Companion Pass

E is sporting her Southwest Onesie.

I earned my first Companion Pass through credit card bonuses early in 2016, and it remained valid through 2017. Sarah then followed suit in early 2018 and held the pass until the end of 2019. I earned my second Companion Pass in January, 2020. By the time it expires, we will have carried this perk for nearly six straight years!

Between 2016 and 2019 we used the Companion Pass to basically get BOGO tickets for 10 domestic and 5 international trips. As of January 2020, we have realized over $9,000 in free travel through our Rapid Rewards Points combined with our Companion Passes. 

#2 Southwest offers flexibility with refundable flights

I am a bit risk-averse and often miss flight deals because I’m afraid of purchasing a non-refundable ticket if I’m not pretty close to certain that we can make the trip. Even when I do commit to a purchase, I feel a bit of panic. What if something happens, and I’ve wasted money? Well, Southwest’s ticket cancelation policy removes that stress. It allows for a reimbursement as long as you cancel within 10 minutes of your flight.  

The refund policy is maximized if you book using Rapid Rewards Points. If you’ve booked their cheaper “Wanna Get Away” fare in cash and then cancel, you get a travel credit. This is a way better deal than the other airlines offer, but it’s not risk-free since your money is tied up in a credit that must be used within 12 months of the original purchase. If you book using points, then you can have the taxes that you paid refunded to your credit card and the points reinstated in your account. It’s absolutely risk-free!

Great for dealing with unexpected illnesses

Let’s face it; little kids are like sponges for illness. They can be healthy two days before a trip, and then all of a sudden, whammy. This December we were scheduled to fly to Raleigh to visit Sarah’s aunt and uncle. The flight was on a Saturday. On Wednesday we learned that another little girl in E’s nanny share had come down with a fever. Sure enough, by Thursday afternoon E’s temperature was up. Then on Friday I came down with what seemed like an unrelated stomach bug. It was bad. Luckily, because we’d booked with Southwest, we were able to cancel the trip at no cost. Now we’re scheduled for a make-up in February. 

Perfect for planning tentative trips

We’ve taken advantage of this refund policy on several occasions in order to lock in cheap flights for trips that we’re not certain we’ll be able to take. For example, last winter I booked flights to Puerto Rico in March and Aruba and Los Cabos over two separate weekends in May. We fully expected to take the trip to Puerto Rico, but given that we were booking it before E was even born, there were a lot of variables in play. In the end, Puerto Rico worked out, but the refund policy really helped with my peace of mind. 

For the May trips, I only intended to go to one of the destinations but was unsure what my work schedule would look like six months out, so I booked two trips in order to keep my options open. Several months later, once I had a better grasp of my work schedule, I happened across a well-priced award ticket on American Airlines to Curacao. Sarah and I agreed that Curacao sounded more interesting than Aruba, and that Los Cabos could be postponed until New Years. Because of the cancelation policy, we were able to scrap both trips in favor of Curacao

A good tool for Positioning Flights

As discussed in a previous post, a positioning flight is useful for those of us at smaller airports who need to reach the big city hubs in order to take advantage of the cheaper flights that often pop up there. Southwest’s cancelation policy makes them an ideal option for a positioning flight. In part this is because you can book speculative positioning flights and then cancel if the cheap international ticket falls through for some reason. This is also because you can do a last-minute rebooking if you see that your return trip is delayed and will cause you to miss the final (positioning) leg home. 

#3 Southwest’s Rewards Program is Easy to Use

The number of Southwest Rapid Rewards Points you need to book an award ticket is roughly tied to the cost of the cash ticket at a rate of 1.5 cents per point. In other words, a ticket priced at $150 will cost you about 10K points. The actual rate varies slightly due to the way that taxes are calculated, but I won’t go into a deep dive on that here. 

I like the predictability that this system provides. If there is a ticket available for purchase, then you can book it for a reasonable number of points. You may occasionally find outsized value when using an airline doesn’t peg its “miles” to a set cash value, but more often than not these days, the routing that you want to a particular destination will cost a ridiculous number of points. 

With Southwest, the seats on any airplane are broken up into multiple price buckets. Once the tickets in the lowest bucket sell out, the price goes up to the next bucket. Hence, the further out you reserve your flights, the less you will typically need to pay. If you notice the price has dropped due to a fare sale, though, you can always rebook at the lower price. That is thanks to the free rebooking and cancelation perk that the airline offers.  

In Conclusion

If you’re a standard leisure traveler living near an airport served by Southwest Airlines, then I strongly encourage you to hop on the bandwagon. For us, the benefits extend beyond the “big trips.” Because we have access to so many (essentially) free plane tickets, we are able to hop around the country and visit friends and family without incurring a significant financial cost. That, combined with the peace of mind that comes with knowing you can cancel your flight if circumstances change, is nearly priceless. 

Both Sarah and my mom used their Companion Passes to get the family to Grand Cayman.

Even if you are a solo traveler who would not get much value from the Companion Pass, there are significant benefits to Southwest and its Rapid Rewards Program. If you don’t already have one of the Southwest Cards and have a decent credit score, then I’d highly encourage you to take advantage of the sign-up bonuses. And remember, if you use this link then I’ll get a referral bonus to apply to future adventures!