In the past few days, I’ve talked to family members who travel rarely and friends who travel every week. They all love Southwest Airlines, and most have a Southwest Airlines Visa credit card. I tell each of them to cancel that card and get a Sapphire Preferred Visa instead.
Both cards are offered by Chase, and in some cases these people already held both cards–a clear case of unnecessary overlap. Often the people I know who prefer to fly Southwest do so because of the simplicity. Easy customer service, easy fares, and an easy rewards program, as I outlined yesterday. If you want to keep things simple, a Sapphire Preferred card is the way to go (other than a cash back card, but that often has a poor return). The Sapphire Preferred will also earn you more Rapid Rewards points from a larger variety of purchases.
Ultimate Rewards Points Transfer to Southwest …and Everyone Else
This is the number one thing to remember throughout this post. The Ultimate Rewards points earned from a Sapphire Preferred card can be transfered instantly at a 1:1 ratio to Rapid Rewards. When you earn an Ultimate Rewards point, it is like earning a Rapid Rewards point, so all the other math after this will consider them identical: just points.
But also remember an Ultimate Rewards point can be used for lots of other things if you prefer. You can transfer them to United or Avios for international awards. You can transfer them to Hyatt or Marriott or Priority Club for hotels. You can do this with Southwest points, too, but at a fixed value, meaning X number of points = Y dollars. The benefit of other rewards programs is that you can sometimes redeem a relatively small number of points for a very expensive flight or hotel.
Finally, you can consolidate your Ultimate Rewards points into a single account. My family consolidates points in my account to pay me back for flights I book them through United Airlines, for example. Megan and I also have multiple cards that earn Ultimate Rewards points (not just the Sapphire Preferred), and so we take those points every couple months and put them in one spot.
Sapphire Preferred Earns in More and in More Categories
The Southwest Rapid Rewards Visa earns 2 points per dollar on all purchases through Southwest.com, whether you are purchasing Southwest flights or reserving a hotel or car through a Southwest partner. Everything else earns 1 point per dollar.
The Sapphire Preferred Visa earns a 7% dividend on all points earned each year. So before we can even start, you have to factor that in. You’ll earn 2 points per dollar on ALL travel, including flights, hotels, train tickets, parking, cruises–you name it. And it doesn’t matter where or how you purchase it. Multiple by 7% and you’re really earning 2.14 points per dollar. You’ll also earn that 2.14 points per dollar at all restaurants and for catering, too. Everything else earns 1 point per dollar, which will end up as 1.07 points per dollar after the dividend.
But wait, you can do better. Book flights and hotels or purchase merchandise through the Ultimate Rewards shopping portal and you’ll not only earn your typical 2.14 or 1.07 points per dollar, you’ll also earn whatever bonus points are provided by the shopping portal.
Potentially Lower Annual Fee
The Southwest Rapid Rewards Premier card, which offers an opportunity to earn tier qualifying points toward A-List status, has an annual fee of $99. The Southwest Rapid Rewards Plus card, which does not include this perk, has an annual fee of $69. Otherwise they’re mostly the same. The Chase Sapphire Preferred has an annual fee of only $95. This is $4 less than the Premier card, and only $26 more than the Plus card. In my mind, these differences a small enough that they are not worth worrying about, and you shouldn’t worry about having to pay a higher annual fee to get all the additional benefits that come with a Sapphire Preferred card.
I will admit, however, that some people will want those tier qualifying points that you can earn with the Premier card. All I can say is more power to you. They seem expensive to earn at 1,500 per $10,000 spent, so you’ll need to put a lot of purchases on that card to make a meaningful contribution toward your elite status.
The Final Message
In short, you are guaranteed to earn at least a little more, and sometimes a lot more, points on the same purchases that you would make with the Southwest card, and you can do a lot more with them. But you can still turn those Ultimate Rewards points into Rapid Rewards points if you want. I’m not here to argue that Rapid Rewards is a bad program–in fact it’s a very good one. But I don’t think the Southwest Rapid Rewards Visa is a card that belongs in your wallet given that another Chase product can do as good a job or better.