Near the end of 2014, we strategically applied for credit cards with the specific goal of getting the Southwest Companion Pass for 2015 and 2016. This companion pass let’s you get unlimited buy-one-get-one free on all Southwest flights with the same person, whether the first ticket is booked with points or cash, and lasts for up to 2 years depending on which month it is earned in. Our strategy was for Becky to get both personal versions of the Southwest credit card, each of which came with a 50,000 point signup bonus. After meeting the minimum spend of $2,000 on each card, we had 104k out of the 110k required to earn the companion pass and topped off the last 6k through regular spend.
Back then, Chase handed out credit cards like candy and didn’t really care how many other credit cards someone had gotten in the past 2 years. These days, the majority of their credit cards fall under the “5/24 rule” which prevents someone who has opened 5 credit cards in the past 24 months (from any bank) from being approved.
If you happen to come in under Chase’s 5/24 rule, then our signup bonus based strategy above should still work perfectly fine. Just make sure you’re getting 50k+ for each card as the public signup bonus seems to swing between 30k and 60k throughout the year.
If you’re like us and no longer qualify for new Southwest credit cards, then follow along down the rabbit hole as I investigate a bunch of other ways we might be able to earn a new Companion Pass and whether or not the value of the pass justifies the cost.
What Is The Southwest Companion Pass Worth?
The value of the Southwest Companion Pass will vary depending on who’s using it because the worth is tied directly to how many times you’ll actually take advantage of the BOGO benefit. A companion pass that goes unused is worthless, while one that gets used often can be worth a ton.
I commonly see people say things like “The companion pass doubles the value of Rapid Rewards points”, but this line of thinking is severely flawed. Buying a ticket with cash and using the companion pass or buying a ticket with points and using the companion pass both remove the extra cost of the 2nd ticket (minus taxes and fees), so the actual value of the points used remains constant with or without the companion pass.
There is an argument to be made that the first 110,000 Rapid Rewards points earned should be valued differently because the companion pass itself is added on top, but that doesn’t change the value of the underlying points themselves. More on this later…
The easiest point of reference for valuing the companion pass is looking at our flight behavior for the almost 2 years that we owned the companion pass ourselves. In the time period from March of 2015 when we earned the pass to the end of 2016 when it will expire, we booked 6 round-trip flights using the companion pass for a total cost of 131,987 Rapid Rewards points and $463.14.
11 of the 12 segments were booked with points + taxes and fees (usually $5.60 per segment, but our Cancun flight was a bit more at ~$40 per segment), while 1 of the segments was booked with cash. Well sort of cash at least, it was refunded thanks to the Citi Prestige’s airline credit, but that doesn’t factor in here.
As I mentioned above, the value of the companion pass resides in those 2nd tickets, how the first was paid for doesn’t matter. In our case, the first tickets accounted for all of the points and $327.26. The second ticket only accounted for the remaining $135.88.
If the second person would have paid cash for the tickets, the total cost for all 12 segments would total $2,303.96.
Once we subtract out the fees we paid instead of paying full price, I think it’s fair to say our southwest companion pass was worth $2168.08.
If we earned the companion pass again in early 2017, I image we would use it about the same amount before it expired at the end of 2018, so I’ll use this number as a baseline below to determine whether or not we should pursue the companion pass again now that it’s much harder for us to obtain.
The Goal: 110,000 Qualifying* Rapid Rewards Points
It’s important to note that not all Rapid Rewards points are created equal when it comes to earning the companion pass. Luckily, Doctor of Credit has a great resource on what does and doesn’t count: Everything You Ever Wanted to Know About the Southwest Companion Pass.
Most Rapid Rewards points count whether they are earned via flying, with the credit card (including the signup bonus), or though various partners. Even transferring points from various hotel programs currently counts towards the companion pass, but unfortunately transferring them directly from Chase Ultimate Rewards does not. Otherwise that would be a no-brainer for someone who would make use of it.
In general, getting up to 110,000 qualifying miles by chasing 500-1000 point promotions would take far too long to be efficient, so I’m going to focus on the different opportunities to earn large amounts of qualifying miles without getting any Chase cards that fall under the 5/24 rule mentioned in the intro. Most of this will involve transferring from Southwest’s various hotel partners with points earned or transferred from various credit cards.
What are the 110,000 Points Worth?
Southwest Rapid Rewards are a fixed value currency which effectively means that you will get the same value out of them no matter what flight you choose to book with them. Prior to April of 2015, Southwest had a set conversion rate of 70 points per dollar (1.42 cents per point) and even earlier it was set to 60 points per dollar (1.66 cents per point). Note: The 1.42 and 1.66 cents per point worked out to be a little higher in practice after taxes were taken into account on the paid flights.
Since then, there is no official conversion rate and the points per dollar can vary between flights. In practice, the points end up being worth between 1.4 and 1.8 cents per point. If I average out the redemptions we’ve done since April of last year, our own personal value ends up at 1.635 cents per point.
To keep it simple, we’ll value the 110,000 points at 1.6 cents each.
Let’s not forget about the companion pass we’re earning at the same time though. Above, I determined the companion pass would be worth about $2,168 to us, but this amount will vary depending on how you use the pass yourself. Split across all 110,000 points, we come up with an extra ~2.0 cents per point in value.
That means that each Rapid Rewards point earned towards the companion pass is worth 3.6 cents, but ONLY IF we earn the full 110,000. Falling short would mean only getting the standard 1.6 cents per point that any Rapid Rewards point can be redeemed for.
I’ll reference this 3.6 cent value as we look at the different ways to earn qualifying points outside of the 5/24 rule. Let’s start going through the hotel partners in alphabetical order.
Transfer Rate to Southwest: 5,000 Best Western -> 1,200 Rapid Rewards
Credit Card: 50,000 point signup bonus after $1,000 in spend, annual fee waived for the first year. Card issued by First Bank of Omaha. (Link)
Purchasing Points: 1,000 Best Western for $10 = 240 Rapid Rewards for $10 = 4.17 cents per point
Value: The credit card has an effective signup bonus of 12,000 Rapid Rewards points which are worth $432 based on the 3.6 valuation we came up with above. That’s not a bad signup bonus for only $1,000 in spend if you’re working towards the companion pass. It’s not worth it to buy the points directly.
Transfer Rate to Southwest: 2,000 Club Carlson -> 200 Rapid Rewards
Credit Card: 85,000 point signup bonus for $2,500 in spend, $75 annual fee. Card issued by US Bank. (Link) (There is also a business version of the card with the same bonus, but smaller annual fee of $60)
Purchasing Points: 1,000 Club Carlson for $7 = 100 Rapid Rewards for $7 = 7 cents per point
Value: The credit card comes with an effective 9,600 Rapid Rewards points after hitting the minimum spend which are worth $345.60 towards the companion pass, but after subtracting out the annual fee is only $270.60. This isn’t terrible for the $2,500 in spend required. It’s definitely not worth buying the points directly to convert to Rapid Rewards.
Transfer Rate to Southwest: 6,000 Choice -> 1,800 Rapid Rewards
Transfer Rate to Choice: 1,000 Amex Membership Reward -> 1,000 Choice
Credit Card: 32,000 point signup bonus after $1,000 in spend, no annual fee. Card issued by Barclaycard. (Link)
Purchasing Points: 1,000 Choice for $11 = 300 Rapid Rewards for $11 = 3.7 cents per point (Max 50,000 per year)
Value: The credit card comes with an effective 9,000 Rapid Rewards points for a value of $324, which isn’t bad for a minimum spend of $1,000. Buying points is certainly interesting because the cost per Rapid Rewards is almost equal to the value of 3.6 cents that we calculated above. This method is capped at 14,400 Rapid Rewards, but can potentially be worth it to finish off the 110,000 or if you’ll get more value out of the companion pass than we do. Also, transferring MR into Choice and then onwards to Rapid Rewards is an option as 6,000 MR would become 1,800 Rapid Rewards. At a value of $64.80, each MR would effectively be redeemed for just over 1 cent (1.08 cents). Certainly not the most valuable use of MR, but is above the minimum 1 cent per point you should shoot for and an option to consider if you have a ton of MR lying around.
Transfer Rate to Southwest: 5,000 Hyatt -> 2,400 Rapid Rewards (Bonus 6,000 for a transfer of 50,000 or 50,000 Hyatt -> 30,000 Rapid Rewards)
Transfer Rate to Hyatt: 1,000 Chase Ultimate Rewards (UR) -> 1,000 Hyatt
Credit Card: 2 free nights for spending $2,000 + 5,000 for adding an authorized user, annual fee of $75. Issued by Chase, but potentially not subject to 5/24. (Link)
Purchasing Points: 1,000 Hyatt for $24 = 480 Rapid Rewards for $24 = 5 cents per point
Value: The credit card doesn’t come with a large sum of points, so that’s not an effective way to earn towards the companion pass. Purchasing points is also a bad value, unless you’re targeted for a bonus when purchasing. Until October 25th for example, I can purchase 50,400 Hyatt points (30k Rapid Rewards) for $864 or ~2.9 cents per Rapid Reward point which is better than the 3.6 cents we’re valuing them at. As for transferring UR to Hyatt to Southwest, you are effectively getting 1.7 cents of value out of each UR transferred at the normal rate or 2.16 cents each if you do 50k at a time. This isn’t a bad value for UR if you’ll definitely get at least as much value from the companion pass as we do.
Transfer Rate to Southwest: 6,000 La Quinta -> 1,200 Rapid Rewards
Credit Card: 40,000 points after $10k spend (10k points after $1k spend + 10k after $5k + 20k after $10k), no annual fee. Issued by First National Bank of Omaha. (Link)
Purchasing Points: 1,000 La Quinta for $11 = 200 Rapid Reward for $11 = 5.5 cents per point
Value: None. The credit card is worth 10,000 Rapid Rewards (or $360) after meeting the spend, but with such a high spend requirement, I don’t see anyone going after this one in pursuit of a companion pass. Purchasing points is also a bad deal, I don’t see any value coming out of the La Quinta program here.
Marriott/Ritz Carlton & SPG
Transfer Rate from SPG to Marriott: 1 SPG <-> 3 Marriott
Transfer Rate from UR to Marriott: 3 Chase Ultimate Reward -> 3 Marriott <-> 1 SPG
Transfer Rate from MR to Marriott: 3 Amex Membership Reward -> 1 SPG <-> 3 Marriott
Direct Transfer Rate to Southwest:
10,000 Marriott -> 2,000 Rapid Rewards
20,000 Marriott -> 5,000 Rapid Rewards
30,000 Marriott -> 10,000 Rapid Rewards
70,000 Marriott -> 25,000 Rapid Rewards
140,000 Marriott -> 50,000 Rapid Rewards
Hotel and Air Redemption to Southwest:
200,000 Marriott -> 50,000 Rapid Rewards + 7 Marriott category 1-5 Nights
220,000 Marriott -> 70,000 Rapid Rewards + 7 Marriott category 1-5 Nights
250,000 Marriott -> 100,000 Rapid Rewards + 7 Marriott category 1-5 Nights
270,000 Marriott -> 120,000 Rapid Rewards + 7 Marriott category 1-5 Nights
Personal Marriott Credit Card: 87,500 point signup bonus after spending $3,000 and adding an authorized user, annual fee of $85. Issued by Chase and is subject to the 5/24 rule. (Link)
Business Marriott Credit Card: 80,000 point signup bonus after spending $3,000, annual fee of $99. Issued by Chase and supposedly not subject to the 5/24 rule. (Link)
Personal SPG Credit Card: 25,000 point signup bonus after spending $3,000, annual fee waived for first year. Issued by Amex. (Link) (If that’s a referral/affliate link, I’m not sure who it belongs to. Tough to find the 25k offer these days.)
Business SPG Credit Card: 25,000 point signup bonus after spending $5,000, annual fee waived for first year. Issued by Amex. (Referral Link)
Purchasing Marriott Points:
1,000 Marriott for $12.50 = 200 Rapid Rewards for $12.50 = 6.25 cents per point (low end conversion)
1,000 Marriott for $12.50 = 444 Rapid Rewards for $12.50 = 2.82 cents per point (high end conversion)
Purchasing SPG Points:
1,000 SPG for $35 = 600 Rapid Rewards for $35 = 5.83 cents per point (low end conversion)
1,000 SPG for $35 = 1,332 Rapid Rewards for $35 = 2.63 cents per point (high end conversion)
Value: This hotel program is by far the most complicated, first because of the Hotel and Air packages which are an even better than a direct transfer at the highest level (not even counting the hotel nights!). Second, Marriott recently merged with SPG, but both loyalty programs currently exist at the same time and points can freely be moved between them. Let’s break it down between the low end and the high end redemptions.
The lowest possible conversion of Marriott to Rapid Rewards (10k -> 2k), we get 0.2 Rapid Rewards per Marriott point or 0.72 cents of value per Marriott point.
The highest possible conversion of Marriott to Rapid Rewards (270k -> 120k) is enough to get the companion pass by itself and offers a value of $4,120 (3.6 cpp only for the first 110k, then 1.6 cpp) or 1.52 cents in value per Marriott point which works out to be an amazing value for Marriott points on their own (without even counting the hotel nights!).
Now that we have the range of 0.72 – 1.52 cents per point for Marriott, it’s easier to put the different options into perspective. The credit card bonuses are then worth between $598 and $1,330 depending on how they are redeemed and all offer good value towards the companion pass on their own. Note: If you’re eligible for the personal Marriott card (it falls under the 5/24 rule) and want the Southwest Companion Pass, just get the Southwest card directly! You’ll get much more value that way.
As far as purchasing points goes, it doesn’t make sense if you’ll be using the lower end conversions to Rapid Rewards, but it could make sense if you’re going for the top tier ones. For example, if you have enough Marriott rewards for the 200k -> 50k Rapid Rewards conversion, but don’t have an easy way to earn more, you can effectively purchase 20,000 Rapid Rewards for $234 (through SPG) and bump up to the 220k -> 70k level. This is a great deal (if you’ll use them!) because the points themselves are worth over $300 without even counting the Companion Pass value on top!
If you’re considering transferring from the flexible UR and MR, your rate of return of continuing on to Rapid Rewards works out to the same range we found above of 0.72 – 1.52 cents per point because both currencies end up at a 1:1 conversion with Marriott. Definitely doesn’t make sense to transfer at the low end, but much like purchasing points, if you have the opportunity to move from the low end Hotel and Air redemptions to the high end, it can be very lucrative.
Recap of Transferring UR and MR into Qualifying Rapid Rewards
As I mentioned in the hotel sections above, both UR and MR can essentially be converted to Rapid Rewards points that qualify for the companion pass in a roundabout way:
UR can be transferred to Hyatt at 1:1 and then onward to Rapid Rewards at 5:3 if 50k is done at a time, or 5 UR -> 3 Rapid Rewards. If you value the companion pass like we do, then this works out to 2.16 cents in value per UR which isn’t too bad. This method beats the Marriott transfer unless you’re topping off a Hotel and Air package because that can work out to be 1 UR -> 1 Rapid Reward = 3.6 cents per point.
NOTE: UR can also be directly transferred to Rapid Rewards at 1:1, but this will NOT count towards the companion pass.
MR can be transferred through Choice at 1:1, then onwards to Rapid Rewards at 30:9 or 30 MR -> 9 Rapid Rewards. Valuing the companion pass like we do would make this an average 1.08 cents per point redemption which falls right in the middle of the 0.72 – 1.52 cpp that the MR -> Marriott transfer offers. You will have to determine which one is better based on how many MR you want to transfer and how many other Marriott points you have.
Using Flexible Points to Book Flights (UR, MR, and TYP)
Another option to sort of convert your existing flexible points into qualifying Rapid Rewards is to simply book revenue tickets though each bank’s respective portal.
Rapid Rewards Earning on Revenue Tickets:
6 points per dollar on Wanna Get Away fares
10 points per dollar on Anytime fares
12 points per dollar on Business Select fares
Each of the flexible currencies can be redeemed towards Southwest flights (although you may have to call in to do so) at different rates depending on which credit cards you own.
If we go with the low end of booking at 1 cent per point and look at Wanna Get Away fares, we’re looking at converting 100 flexible points into 6 Rapid Rewards. An absolutely awful conversion on it’s own.
At the higher end of getting 2 cents per point (such as the new Amex Business Platinum card benefit) and booking Business Select fares, we’re looking at converting 50 flexible points into 12 Rapid Rewards. Even at the high end, this is an awful redemption by itself!
At face value, this sort of conversion looks awful, but don’t forget you’re actually getting a flight! If you need to travel somewhere during the time you’re earning Rapid Rewards towards a companion pass, this could work out to be a much better redemption than on a different airline. For example, let’s say we use some UR from our Chase Sapphire Reserve to book a $300 Wanna Get Away fare. Right off the bat, we’re getting 1.5 cents per point because the flight will cost 20,000 UR. Now on top of that we also earn the 1,800 Rapid Rewards points towards the companion pass which are worth an extra $64.80. That brings the overall value of each UR point to 1.8 cents per point.
Nothing amazing to write home about, but something to keep in mind if you need to book some flights early in the same year you plan to earn the companion pass. If you don’t have a use for the flight, then stick to the information one section up that doesn’t involve flying.
Table of Credit Card Signup Bonuses
If you want to try earning the Southwest Companion Pass with credit card signup bonuses, then this table below should prove helpful in telling you which one you’ll get the most value out of. Keep in mind the signup bonuses change from time to time, so be sure to double check before applying.
|Credit Card||First Year Annual Fee||Minimum Spend||Rapid Rewards Earned||Notes|
|Chase Sapphire Reserve||$450||$4000||60000||Falls under the 5/24 rule|
|Chase Southwest Plus Card||$69||$2000||52000||Falls under the 5/24 rule|
|Chase Southwest Premier Card||$99||$2000||52000||Falls under the 5/24 rule|
|Chase Southwest Business Premier Card||$99||$2000||52000||Falls under the 5/24 rule|
|Chase Sapphire Preferred||Waived||$4000||30000||Falls under the 5/24 rule|
|Chase Marriott||$85||$3000||18000-40000||Falls under the 5/24 rule|
|Chase Marriott Business||$99||$3000||16000-35500||Check the latest data points regarding 5/24|
|Best Western Rewards||Waived||$1000||12000|
|Ames SPG Business||Waived||$3000||5000-11000|
|US Bank Club Carlson Premier||$75||$2500||9600|
|US Bank Club Carlson Premier Business||$75||$2500||9600|
I decided not to include links because they often change. I like using Frequent Miler’s Best Offers page to get the latest (and highest offer) links. Unfortunately, he does not have a link to the La Quinta card. Actually, that’s probably for the best.
A Note On “Value”
At the top of this post, I calculated the value of earning 110,000 Rapid Rewards points to be ~$4,000, but this will vary heavily depending on how much you use the companion pass in addition to using the 110k points themselves.
Does this mean as long as you can earn the pass for under that amount, you come out ahead? NO!
Even if you’re able to get just as much value as we did out of the companion pass, the $4,000 is simply the break-even point. For example, if you’re able to get the 110,000 points and the companion pass for an out of pocket cost of $3,500, you’re saving ~$500, BUT you potentially had to do a ton of work and lock up your money in various points currencies along the way which must be liquidated to get the value back. At a measly 13% off of retail, you probably would have just been better off buying discount Southwest gift cards.
This calculation is where I think a lot of people get caught up in value the wrong way. Just because you spent less out of pocket than the value, does not mean you got a great deal. Especially if it involved a non-zero amount of effort or risk in any way.
So what is the right number to shoot for? That’s up to you and will depend heavily on your travel habits and alternative methods available to reduce the cost of your travel.
To look at our own example of earning the companion pass in 2014, we were able to do it the “easy way” by getting 2 Southwest credit cards. At a minimum, we gave up $168 up front in annual fees and at least $200 from the $10k spend that could have been put on a 2% back card. Beyond that, you could even look at what other credit cards we could have signed up for instead and take into account bonus categories above 2% that the spend could have been put towards.
That puts the actual cost of earning those 110k Rapid Rewards and the companion pass in the $400-1,000 range for us. This is still a fantastic deal at 75-90% off retail for all those Southwest flights we took (most of which we would have paid cash for in our pre-churning days), but don’t lose sight of opportunity cost along the way.
Most of the information above relies on the fact that hotel points transferred to Southwest Rapid Rewards count towards earning the companion pass. All of the data points I’ve seen show this is working at the time of this post, but there is no guarantee it will last forever!
Be sure to read up on recent data points before going ahead with any big purchases/movements, and to be extra safe, just start with small transfers of 1,000 points from each program you plan to use.
Did I Miss Anything?
Hopefully you found this post useful, especially if you’re considering going after the companion pass and already have too many credit cards to do it the easy way. Despite my best efforts, there are a ton of ways to earn and transfer to Rapid Rewards and it’s possible I missed some additional good opportunities. I tried to stick with hotel transfers, flexible points, and credit card bonuses because I think those offer the easiest ways to earn the companion pass at a reasonable price. Please let me know below in the comments if you know of any better ways!
I still haven’t decided if we’re going to go for the companion pass ourselves in 2017, but I’ll be sure to keep you updated if and how we end up doing it.