As many of you know, this past year Aisha and I have travelled to Cabo (2x), Seattle (3x), Cancun, Puerto Vallarta, Jamaica, Miami, Orlando, Vegas, Orange County, and LA – all absolutely free thanks to the Southwest Companion pass.
We’re going to Miami!
I really hope you do this so we can be travel buddies. This year Aisha and I have already booked Miami, Coachella, Vegas, Portland, and plan to also hit Cancun, Chicago, New York, and Austin before the end of the year.
This is the best time to go for the Companion Pass
Right now is the *BEST* time to do this. The regular sign-up bonus is only 25K points, and the 50K sign-up bonuses come and go. I have a valid referral link for the 50K sign-up bonus right now.
Because it’s the beginning of 2016, if you qualify for the companion pass now, you’ll be able to use it for the rest of 2016 and all of 2017 – that’s 22 months!
If you miss this chance, the 50K bonus will be back in a few months, but then you’ll only get to use your Companion Pass for ~15 months instead of 22.
You’ll need to block out an hour on a weekday during business hours to apply to both cards because you’re more likely to get fast approval during business hours.
Full Disclosure – I have 2 selfish reasons for wanting you to do this. First, I’m gonna make 5000 bonus points by referring you. And more importantly, now we can go on trips together!
Disclosure #2 – I earned the companion pass by opening a Southwest Premier and Plus card. The Plus card doesn’t have a 50K sign-up bonus at this moment, so I’m going recommending the Southwest Business Premier Card – something I haven’t personally tried applying for. That said, I’ve been researching this exact plan for Aisha to get the Companion Pass right now. We didn’t need her to apply this year, however, because I racked-up enough spending to get my Companion Pass renewed through the end of 2016.
Here’s the Math
You need 110,000 points in one calendar year. You’re going to get 50K points for each card you open (once you hit a spending threshold). So you’ll need to spend another $10K on the cards once you open them. If you and your companion are diligent about putting *everything* on these two cards for the next 3 months, this should be very doable. Talk to me and I can give you some ideas.
Let’s get started
1 – Apply for the Southwest Premier Card
They don’t let me post the link on the internet. So I’ll need to email you the application link through their tool. Here’s some context:
You’ll likely get approved for the first card and the second you’ll be declined or “pending review.” That’s okay. You’ll call their “reconsideration line” and probably get approved instantly. I’ll walk you through what to say.
By applying for 2 cards on the same day, you’re not going to get the same ding to your credit score as opening them on separate days, because to the credit agencies will look like you’re shopping around for 1 new card.
2 – Apply to the Southwest Premier Business Card
Listen, don’t get hung up on the fact that you don’t own a company. Their requirements are really loose, and you’re going to answer truthfully. Read this blog post beforehand – it lays out exactly what the application is going to ask for, and how to answer truthfully but in a way that allows you to qualify for the card.
You’ll need to do 30 minutes of prep so you can answer any questions about what your business is. In Aisha’s case, her business was going to be renting out our apartment.
3 – If you don’t get instant approval, call their reconsideration line
I had to do this last year, and it seems like it’s pretty normal. Here’s what you need to prepare for, and plan on saying when you talk to the customer service rep:
If you’ve done business with Chase in the past -e.g. checking account, other credit cards like Chase Freedom or Sapphire, make sure to mention this! Shows that you have a history of being responsible.
Next, tell them that you’re trying to get Southwest sign-up bonus, which is why you’re opening the card. This signals you’re about to spend a lot of money – and – make them a lot of money.
Next, Chase may not want to extend thousands of dollars in new credit to you if you already have a couple cards with them. So tell them you’d be open to them lowering your credit limit on a different Chase card if they’ll approve you for low limit on this new card.
Finally, you’ll need to have details on your business prepped and ready to share in case they asked. Read this and write down your answers beforehand.
You might get approved for the Business Card instantly. Or they may notify you within 30 days. If you didn’t get approved for the Business Card, all is not lost. I’ve got a backup plan for you. Skip to “Backup Plan” below.
5 – You’re approved! Now have to spend $10K more to achieve your goal.
Let’s break down that math:
- Spend $2K on Premier card. Earn 2K points for that spending. Earn 50K sign-up bonus.
- Spend $2K on Business Premier card. Earn 2K points for that spending. Earn 50K sign-up bonus.
- Total so far = 104K points
- Spend another $6K
- Reach goal – 110K points
Remember there’s a delay. Let’s say you spent the money in Jan. It shows up on a Feb 15th bill. The Feb 15th bill isn’t due till Mar 15th. So the points might not post till Mar 30th. Your mileage may vary, but with my Chase Marriott card, as soon as I hit the spending threshold I paid-down my bill a few weeks before it was actually due, and the points did post much quicker than I was expecting.
6 – BOOM. You’re done
7 – Maximize the Value of the Companion Pass
Remember, the way to maximize value is to book your flights with points, and then add your companion, who flies free. The alternative way, that is less valuable, is for you to buy your ticket with dollars, and then your companion for free.
Be disciplined. From now till when the pass expires, prioritize travelling to cities Southwest flies to. Now’s the wrong time to plan that Euro trip. 110,000 miles is probably enough for your first 5 trips, but after that, you’ll need to start earning more points. So I made Aisha an authorized user on the card, and we each put all our spending on the Southwest cards for the year.
Focus on the high value destinations. Yes, Southwest can get me from SFO to LA. But since they acquired AirTran they now fly to the Bahamas, Cancun, Cabo, Puerto Vallarta, Belize, Aruba, Jamaica, Dominican Republic, Puerto Rico, and more! That is why Aisha and I have been to Mexico 4 times in 1 year.
Double and Triple points on some purchases. (This one is a bit lower leverage on your time, but I wanted to share it.) If you do spend money on Southwest flights (I avoided it), obviously put those on your Southwest card, as you get 2X points. You also get 2X points with their hotel and rental car partners. But if you do online shopping, you can rack up a LOT of points. Southwest has an online shopping portal. The idea is online retailers like ASOS want you to buy stuff on their site. So they’ll give an affiliate kick-back to Southwest if you click from the Shopping portal into ASOS’s websites and buy something. Southwest, then, will give you that kick-back in the form of additional points-per-dollar-spent. Aisha loves shopping at ASOS. So I would always have her start from the Rapid Rewards Shopping Portal. Buy the thing she planned to buy anyway. Pay for it using the Southwest card. And then we’d see on our next statement that $100 in ASOS spending was actually going to net us 600 miles.
Here’s some stuff that you might wanna know for more context
So you’ve applied and been approved for the Southwest Premier card. But not the second card. This can still work! You’re sitting at 50K points. You need another 60K. So it’ll be more complicated, but you’ve got a couple options:
Option 1 -Use Hotel Points You already Have!
A lot of people think they can transfer Chase Sapphire or other points to Southwest. These transfer points won’t count as companion-pass-qualifying miles. But Hotel points will! So if you have a ton of Hotel points, you can cash those in. The conversion rate isn’t pretty. You’d need 140K Marriott points to get 50K Southwest miles.
Option 2 – Open a New Hotel Credit Card AND a Southwest PLUS Card
I opened a Marriott card. Got a 70K point sign-up bonus. And earned the companion pass for year 2.
Option 3 – Open 1 card, and spend $35K
If you have some big purchases coming up, or can put work expenses on your card, this is actually a much easier option. It may be a slower option, so rather than having a companion pass for 22 months it might only be for 18 months, but that’s still a huge value.
Should You Keep these Cards Forever?
I asked myself this question a few months ago. The answer is probably not forever.
Pros for keeping ’em:
A – More credit extended, less utilization. If you have a $100K credit limit across all your cards, and you only rack up $5K of spending each month, your credit utilization is 5%. That’s really low! That’s really good! If you close a card with a $20K limit, and still spend $5K each month, now your credit utilization goes up to 6.25%. That’s worse.
B – 10-15 lines of credit is considered good for your credit score. In my case, I had very few credit lines (I had never had credit cards until the past few years) so my credit score was weak, and keeping these cards open is good for my score.
C – One of the most amazing things about the Companion Pass is you don’t trade-in those 110K points for the Pass. You earn the Pass, and then you get to keep & use those 110K points. So this entire year, I’ve been booking my flights with points, and Aisha’s flights are free with the Pass. Once I burned through the enormous 110K stockpile of points, I started keeping all my spending on the Southwest cards so I could earn more points, so I could travel completely free even more.
These two cards both have $100 annual fees. So about 11 months after opening the cards, you might want to consider cancelling 1 or both to save that money.
Regarding point C in favor of keeping the card. What i realized is that for earning the pass you have to spend on your Southwest card. But for earning points once you have the pass already, the Chase Sapphire card works much better because I earn 2X points on travel and dining, which then transfer to Southwest miles at a 1:1 ratio.