How Long to Wait Before Getting Southwest Credit Card Again
The Southwest credit cards are some of the most valuable travel rewards credit cards because they offer great sign-up bonuses and offering yous a shortcut to obtaining the valuable Southwest Companion Laissez passer. But are these credit cards keepers that y'all'd want to hold on to subsequently you've squeezed the up-front value out of them? This article volition wait at why you should or should non cancel your Southwest credit cards.
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Your credit score
Earlier you always cancel a card y'all need to make sure that your credit score is not going to exist severely impacted.
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Utilization
If canceling a Southwest credit menu will dramatically increase your utilization then you probably should not abolish, even if yous have no real need for the card. Y'all might want to wait until you've picked upwards other cards in the future that can assistance you proceed your utilization depression before you cancel. You can also consider shifting your credit to other Chase cards if possible.
Credit history/age of accounts
Too, you want to make sure that y'all're not cancelling your oldest business relationship. For credit history, which makes upwards fifteen% of your credit score, your oldest aged account is the #1 gene and then in the vast majority of circumstances, y'all don't want to abolish that business relationship!
Southwest retention offers
Chase volition sometimes offer yous retentiveness offers if you've put some spend on your Southwest card (and they will even exercise information technology when you don't have much spend). Sometimes they'll offer you lot something like a $30 or $70 argument credit and other times they won't offer you anything at all.
You tin observe information points for these offers here.
Do you fly Southwest?
This is the simple common sense style to determine if you need to abolish your Southwest cards. If you practise not ever fly Southwest and so you lot're going to have trouble justifying paying the annual fee for these cards and you might want to cancel them.
The exception would be if yous have hereafter plans to wing them since yous could banking concern your anniversary points for that mean solar day in the future. If you're able to score a retention offering and the anniversary bonus, you'd exist coming out on top big time with these cards.
Anniversary bonus
The first thing to look at is how much value are y'all getting from the anniversary bonuses. If you lot didn't know, each cardmember year, you'll exist given a certain amount of anniversary points that will exist deposited into your Southwest account.
Here's a rundown of the bonuses for the personal Southwest credit cards.
- Southwest Priority Credit Card = 7,500
- Southwest Premier Credit Card = 6,000
- Southwest Plus Credit Card = 3,000
The offset thing to look at is the value that you lot get from your anniversary bonus. The value of Southwest Rapid Rewards tin can vary between ane.4 and ane.vii cents per point based on my own personal experience with booking Southwest flights.
So I'll just stick with a valuation of 1.5 cents per point for this only y'all should manifestly value your Rapid Rewards based on the value you look to receive from them on your bookings.
At a valuation of 1.v cents per point, the anniversary bonus is going to offering the following value for your cards.
- Southwest Priority Credit Card = $112
- Southwest Premier Credit Bill of fare = $ninety
- Southwest Plus Credit Card = $45
Now here are the annual fee for these cards:
- Southwest Priority Credit Card = $149
- Southwest Premier Credit Card = $99
- Southwest Plus Credit Carte = $69
As you can see, the value from the anniversary bonuses wipes out a lot of the annual fees for these cards. Permit'south get ahead and offset the annual fee and see what the constructive annual fee comes out to with factoring in the value of the anniversary bonus.
- Southwest Priority Credit Card = $37
- Southwest Premier Credit Carte = $9
- Southwest Plus Credit Carte du jour = $24
Southwest Priority Credit Carte
The Southwest Priority Credit Carte'south constructive almanac fee drops all the style downward to $37 but that carte also comes with a lot of additional benefits which include:
- 2X Rapid Rewards on Southwest purchases and hotel and car rental partner purchases.
- $75 Southwest annual travel credit
- vii,500 ceremony points each year
- Four Upgraded Boardings per yr when available.
- xx% back on in-flight drinks, WiFi, messaging, and movies
- No foreign transaction fees
With the $75 travel credit and the $112.l in almanac Rapid Rewards, that's value at $187.fifty received each yr from the perks which already offsets the annual fee. So there'southward the upgraded passes which could be worth anywhere from $120 to $200. When you add on the additional discounts on in-flying purchases and lack of foreign transaction fees, information technology becomes clear that it'southward very piece of cake to justify this annual fee.
The only way you don't come out on top is if you have no apply for the Rapid Rewards and don't program on flight Southwest so the $75 travel credit/bonus spending does you lot no skillful. But if you lot plan on flying Southwest even a couple of roundtrips a year, it should exist pretty easy to justify the annual fee for this bill of fare and so you'll want to retrieve twice nigh cancelling
Y'all tin read more than about this card here.
Southwest Premier Credit Bill of fare
It's pretty articulate that the Southwest Premier Credit Card is about completely justified by the anniversary bonus. You'd only need to get $9 worth of value from other perks like the bonus spend on Southwest, hotels and rental cars; i,500 TQP for each $10K in purchases upwardly to $100K; lack of strange transaction fees; and preservation of your account.
I think it's very easy to get $9 worth of value for those things. Plus, if y'all value Rapid Rewards at just a slightly college number like 1.half-dozen cents per point, you lot'd just need to get $3 worth of value from those perks. So I recall in many cases y'all won't want to cancel the Southwest Premier Credit Card, unless y'all absolutely need to gratis up space for another valuable card.
Exist sure to consider if upgrading to the Southwest Priority is a good option for you as well (it likely will in many cases).
Southwest Plus Credit Card
The Southwest Plus Credit Card has an constructive annual fee of $24 when you lot factor in the ceremony bonus. The problem with this carte du jour is that it doesn't offer much else in the benefits section. Information technology has foreign transactions fees of 3% and doesn't allow you to earn points towards A-list Status.
So I personally would expect to upgrade this menu to the Premier or the Priority Carte if I flew Southwest. It will be much easier to go your value back with the Southwest Premier and the Southwest Priority menu for most Southwest customers, fifty-fifty if they are not frequent flyers. And so when it comes to the Southwest Plus menu, you'll probably want to ditch it for something else.
And if you don't wing Southwest and have no plans to fly Southwest, then the Southwest Plus Credit Card really probably has no identify in your wallet.
If you want to check out a comparison between Southwest credit cards bank check out the tabular array below.
| Features | Southwest Priority Credit Card | Southwest Premier Credit Card | Southwest Plus Credit Card |
|---|---|---|---|
| Sign-up Bonus | 40K for $1K spend in three months | 40K for $1K spend in 3 months | 40K for $1K spend in 3 months |
| Bonus Earning | 2X on Southwest, hotel and car rentals | 2X on Southwest, hotel and car rentals | 2X on Southwest, hotel and car rentals |
| Anniversary Bonus | 7500 Rapid Rewards | 6000 Rapid Rewards | 3000 Rapid Rewards |
| Travel Credit | $75 Southwest annual travel credit | None | None |
| Upgrades | 4 Upgraded Boardings per yr when available. | None | None |
| In-flight Discount | 20% back on in-flying drinks, WiFi, messaging, and movies | None | None |
| Foreign Transaction Fees | None | None | 3% |
| Points towards A-list Condition | one,500 TQP for each $10K in purchases upward to $100K | i,500 TQP for each $10K in purchases upwardly to $100K | None |
| Annual Fee | $149 | $99 | $69 |
Exercise y'all go along points?
If y'all cancel your Southwest card later on points take been added to your Rapid Rewards account, you will keep those points in your account.
Final word
As you tin can tell, it's commonly not worth it to cancel your Southwest credit menu because of the value of the annual bonuses and the boosted perks provided by the card. Unless you have no current or time to come plans to fly Southwest or other unique situation (e.g., you need an open credit card slot with chase), yous'll probably want to hold on to your Southwest cards and let your accounts historic period while you take advantage of their perks.
Cover photo by BriYYZ via Flickr.
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit carte app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, U.s. News, and Concern Insider. Notice his full bio here.
Source: https://www.uponarriving.com/cancel-southwest-credit-card/
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