It’s been quite a while since I’ve provided an update to my credit card rewards gathering strategy. Last I wrote, I’d found that my credit score really hadn’t been affected at all by opening 3 cards in a 7 month time span.
To recap, since May 2018, I’ve opened 3 cards with bonus points in parenthesis:
- Chase Sapphire Preferred (50,000)
- Chase Freedom (15,000)
- Chase Ink Business Unlimited (50,000)
By completing minimum spends within the designated timeline (min spends ranged from $1,000 to $4,000 in 3 months’ time) I’ve compiled over 115,000 points that can be applied for free travel!
Using credit cards to your advantage can be a huge boon on your journey to financial independence, so long as you use them responsibly. This includes only buying things or experiences you can afford and always paying your card’s balance in full each month to avoid paying exorbitant interest to the card issuers.
I last opened the Ink Business Unlimited at the end of December 2018, and completed the minimum spend in March 2019. It’s been eerily quiet on the credit card openings in the 6 months since then. Why haven’t I continued to open any throughout 2019?
Well, after March I had a decision to make about what I wanted to do going forward. I ultimately decided what I wanted my next move to be, though it required a little patience and I needed to wait until the end of 2019 to implement.
As the end of 2019 is nearing, it’s time to put that strategy into action! The next cards I’m opening will be part of my 2020 Southwest Companion Pass Strategy!
What Is The Southwest Companion Pass?
For those who aren’t familiar with it, the Southwest Companion Pass is one of those truly great rewards that a company promotes and gives out to its customers.
At its essence, when you purchase a Southwest airline flight with the Companion Pass, so long as there is another seat available at the same price level, you can choose one person to fly with you for free (aside from the mandatory airline taxes).
When you get the companion pass this reward is valid for not only the remaining calendar year of the year you earn it, but also the year after. So if you earn the 2020 Southwest Companion Pass, this means from the moment you get it in 2020, you can have this benefit for the remainder of 2020 as well as all of 2021! How amazing is that!?
For a prize this great though, it can be a little tricky to earn. If you are going for the 2019 Companion Pass you can earn it in one of two ways:
- 100 qualifying one-way Southwest flights in one calendar year
- Earning 110,000 qualifying points in one calendar year
As of October 17th 2019, it was announced that in order to obtain the 2020 Southwest Companion Pass you can earn it in one of two of the following ways:
- 100 qualifying one-way Southwest flights in one calendar year
- Earning 125,000 qualifying points in one calendar year
As you can see, the total qualifying points required increased, but the number of flights remained the same. Since the number of flights speaks for itself, how can you go about getting points to earn the pass?
The most common ways of earning qualifying points include:
- Spending money and earning points on Southwest Rapid Rewards Credit Cards
- Earning minimum spend bonus points for opening new Southwest Rapid Rewards Credit Cards
- Points earned from purchasing Southwest flights
- Partner Hotel and Car Rental stays
There are many other ways you can earn Southwest points, however, not all of them will specifically qualify as points required for the Companion Pass. This includes purchased points, transferred/gifted points, and tier bonus points among many others.
For a full list of what qualifies as points towards the Southwest Companion Pass, check out their site (the last thing you want to do is get a bunch of points then find out they don’t qualify towards the Companion Pass).
Bottom line, if you can figure out a way to earn the Companion Pass it is an incredible benefit that can last you anywhere from 1-2 years depending on how early in a calendar year you earn it!
My 2020 Southwest Companion Pass Strategy
With that background, my aim is to get the maximum out of my 2020 Southwest Companion Pass, and earn it as soon as I can in 2020. Doing this will allow me to get nearly two full years of the benefit! My partner will be extremely happy she gets to fly for free! (ha – we’d likely split it for half price for each of us!)
The problem is 125,000 points is quite a lot to earn, and I don’t travel nearly enough to get it via 100 one-way flights. So what is my solution?
Enter credit card sign up bonus points.
By signing up for new credit cards and reaching the designated minimum spend amounts, I’ll earn bonus points that can get me most, if not all of the way there. By properly planning this out, I’ll be able to get the Companion Pass within the first 3 months of 2020!
Here is my exact plan:
Sign up for one new Southwest Personal Card in last 2 1/2 months of 2019 (40,000 points)
Southwest currently offers 3 separate personal cards that each have a 40,000 point sign up bonus when you meet the minimum spend of $1,000 in 3 months.
They are (with annual fee in parenthesis):
- Southwest Rapid Rewards Plus ($69)
- Southwest Rapid Rewards Premier ($99)
- Southwest Rapid Rewards Priority ($149 – though $75 annual Southwest Travel credit)
As you can see, each are slightly different with different annual fee amounts, so pick the one that works best for your situation.
You can only apply up for and receive the sign up bonus points for one personal Southwest credit card in the past 24 months. Thus as part of this strategy, you can only get 40,000 qualifying Companion Pass points via a new personal card sign up.
In addition, you need to make sure you have opened less than 5 personal credit cards from any company in the last 24 months (Chase’s 5/24 rule) otherwise, you’ll be automatically denied.
I’ve yet to pick which one I will sign up for (leaning towards the Plus or Priority), though I am planning to apply for it by mid-November 2019. It is important that I reach my minimum spend amount, and thus receive the bonus points, in January 2020 at the earliest. If I reach it too soon, I’ll get those bonus points in 2019 and waste the opportunity to apply them towards my 2020 Southwest Companion Pass!
Timing is critical for this, and making sure to time your spending right is of utmost importance!
Sign up for one new Southwest Business Card in last 2 1/2 months of 2019 (80,000 points)
Southwest currently offers 2 separate business cards that have separate rewards structures.
They are (with annual fee/sign up bonus points/minimum spend in parenthesis):
- Southwest Rapid Rewards Premier Business ($99 / 60,000 points / $3,000 in 3 months)
- Southwest Rapid Rewards Performance Business ($199 / 70,000 points / $5,000 in 3 months)
As you can see each card has different bonus points and fees, as well as other perks (for instance, the Performance Business also offers a $100 credit when getting Global Entry or TSA Pre-check) but go with the one that applies best for your situation.
You may be saying, “I don’t have a business, so I can’t apply for a business card.” What you need to understand is that there are many things you may do that could be qualified as a business.
Do you babysit or pet sit for neighbors or family? Drive for Uber or Lyft? Charge electric scooters? Walk or watch pets? Take pictures of job postings via the Job Spotter app? Sell items from your home and make money that way? Own or manage a rental property?
All of these can be considered a business and allow you to apply for this card. Hopefully there is something like this you can relate to your situation and allow you to go for this option.
Since I’m going for the companion pass as quickly as possible, I chose to go with the Performance Business card and the additional points despite the higher fee.
I actually got lucky and noticed that Southwest was running a promotion on the Performance Business where the bonus points were actually 80,000 instead of 70,000 so I signed up for the card then. Unfortunately the promotion ended October 16th, so if you were to apply now you would only get 70,000 points.
As with the personal card, timing is critical for this, and making sure to time your spending right is of utmost importance!
Minimum Spend points (6,000+ points)
If you’re adding everything up, doing just those two actions alone will get you to 110,000 of the 125,000 necessary qualifying points (120,000 in my case)!
One thing you can’t forget about is that in order to reach those minimum spend bonus points, you need to actually spend the money on your cards.
Since the base level of rewards points on each of the cards gets you at least 1 point per dollar spent, this means by reaching the minimum spend of $6,000 combined ($1,000 on personal card, $5,000 on Performance Business) you would get at least 6,000 points!
For me, these points put me over the threshold. 126,000 of 125,000 needed, woohoo!
For you, this leaves you with 116,000 points, and roughly 9,000 points to go. There are several ways you can get the rest of it (all listed in the previous section).
My plan would be to keep putting as much spending as I could on the Southwest cards, and take advantage of the multiplier effects (where some purchases are worth 2 or 3 points per dollar spent instead of 1 point per dollar for a regular purchase). Perhaps I would look into how I could earn points via their partner hotel and car rentals as well.
No doubt there is a limit to how much you spend in your day to day lives, so there is no question that it would likely take longer into the year to achieve the companion pass status.
Nevertheless, even if it takes you half the year, or three quarters of it to earn the Companion Pass, this benefit is so great if you and a partner or friend travel a decent amount together that it’s worth it!
Put The Plan Into Action
One roadblock you may have to this strategy is wondering how in the world you’d be able to spend $6,000 in 3 months to meet the minimum spend. It’s a fair question as that’s quite a bit for most people!
My plan is a combination of things: Firstly, I’ve held off on any charitable contributions in 2019, specifically so I could do them all at once at year end and put them towards the minimum spend. I plan to do the opposite for my 2020 charitable giving and do it first thing! That’s roughly $3,600 ($1,800 each year) right there!
Next, if nothing else, I plan to pay one month’s rent via a credit card. There is an additional fee that’s charged which is why I typically pay via my bank account, but again, any fee paid would easily be surpassed in value from the companion pass. This would total roughly $1,950 (with the fee).
That means there’s only just over $450 left to spend! Fortunately, January is when the next 6 months of my car insurance is owed, which should run me roughly $360-$400. The rest is under $100, which I could get from any number of things (restaurants, groceries, etc).
While this is my strategy, you could employ other tactics to help meet your minimum spend. This could include:
- Paying for services like utilities or internet for several months in advance
- Purchasing gift cards to places you go to often (like grocery stores, restaurants, etc)
- Paying homeowners/renters/auto insurance up front
- Charitable giving
If all this doesn’t get you to your goal, you can always offer to pay for any big bills for family or friends (so long as you are 100% sure they will reimburse you). There are many ways you can get to this minimum spend, sometimes you just need to get creative!
To wrap this up, for the price of roughly $320 ($199 annual fee + ~$70 annual fee + ~$50 rent fee) I’m going to be getting almost 2 full years of travel with a companion for free!
This means it would take my partner and I two trips together of splitting the cost of the one ticket (assuming a $320 flight each trip) for the fees to pay for themselves.
Looking at it from a combined finances point of view (which we aren’t), in likely one trip we’d have saved the equivalent of the fees that were paid out!
The benefit of the Southwest Companion Pass for any travelers out there is just too good to ignore. We’ll see how this all turns out in a few months but I’m excited to have gotten started on executing this strategy!
Have you considered getting the 2020 Southwest Companion Pass?