Southwest Airlines Rapid Rewards has just launched its latest promotion for points purchased. The concept of a revenue-based frequent flyer program has always been alien to me. So let’s look at the details.
Southwest Rapid Rewards sells points for 40% off
Until Wednesday March 31, 2021, Southwest is offering a discount on Rapid Rewards point purchases. In particular, you will receive a 40% discount when you purchase at least 5,000 points in one transaction.
You can earn a maximum of 60,000 Rapid Rewards points per day with Southwest. However, there is no annual limit to the number of points you can earn. Southwest typically charges 2.75 cents per Rapid Rewards point purchased.
With a 40% discount, you want to pay $ 990 for 60,000 Rapid Rewards points, which is 1.65 cents per Rapid Rewards point.
This is in line with the typical promotions we see at Rapid Rewards when selling points. We’ve seen slightly lower costs for points purchased in the past, but we’ve also seen higher costs.
How much are southwest points worth?
Southwest Rapid Rewards is a revenue-based frequent flyer program and the number of points required for a flight is directly related to the cost of sales of a flight. A rule of thumb:
- Southwest Airlines Want to Get Away fares cost 76-78 points per dollar
- Southwest Airlines Anytime is 78 points per dollar
- Business Select plans are 78 points per dollar
In other words, each Rapid Rewards point is worth approximately 1.3 cents for the cost of a ticket on Southwest Airlines.
Is it worth buying Southwest Airlines points?
Let me get to the point – there are few times when it makes sense to buy Rapid Rewards points. Even at the reduced cost, it usually doesn’t make sense to buy points for ~ 1.65 cents each when you can only redeem them for ~ 1.3 cents each.
There are three possible scenarios I want to address, including the main one where I think it might make sense to balance the Southwest Points given the flexibility that comes with it.
Buy points to get an award
Some may purchase points to top up their accounts so they have enough points for a Rapid Rewards award ticket. I think this might be worth it for some if you need a small number of points, although personally I would just keep collecting points and then redeeming them on your next ticket.
Buy points with the Southwest Companion Pass
The Southwest Airlines Companion Pass is one of the best values for domestic travel. Typically, you need to earn 125,000 qualifying points in a year. When you get these, you can always take a companion with you for standard taxes only, whether you’re booking a cash ticket or redeeming points.
When you purchase Southwest Points with a Companion Pass, you may get oversized value:
- You can buy points for 1.65 cents each
- You can then redeem them for travel for 1.3 cents each and have a companion take them away, which means you get 2.6 cents worth of it
However, there is still absolutely no reason to do so. You’d better just book a paid ticket and then have a companion take with you.
For what it’s worth, buying Southwest Rapid Rewards points doesn’t count towards Companion Pass qualification.
It is valuable to have a supply of southwest points
There is generally a huge benefit in paying for a ticket with Southwest Rapid Rewards points instead of cash. While Southwest Airlines has no change fees for revenue and award tickets:
- If you cancel a sales ticket, you will have to reuse that travel credit within a certain period of time, and the same passenger will have to travel as well
- If you cancel an award ticket, the Rapid Rewards points will be returned to your account and can be used for anyone at any later time
I think having a stash of Rapid Rewards points is very valuable. I use this when I want to book speculative trips (also for friends and family) as there is no disadvantage. If you cancel a sales ticket, the same passenger must still use the credit within a limited period of time.
Which credit card should you use to purchase Southwest Points?
If you want to buy Southwest Airlines points, please note that purchases are processed by points.com. This means that they are not considered an airfare purchase for credit card spending purposes.
So I would recommend using a card that you try to meet the minimum spend or otherwise a credit card that will maximize your return on daily expenses.
In this post, you will learn more about which credit cards are best for purchasing points.
Other ways to earn Rapid Rewards points
If you’re looking to earn Southwest Airlines points, there are some of the best ways to do it:
Southwest sells Rapid Rewards points at up to 40% off, reducing costs to ~ 1.65 cents per point.
Personally, the only circumstance in which I think it makes sense to purchase Southwest Points is when you are trying to build a future supply so you can flexibly book speculative tickets. But other than that, there isn’t a lot of value in my opinion.
In what circumstances do you think it is worth buying Southwest Airlines points?