Travel News

Southwest Rapid Rewards Devaluation

Southwest Rapid rewards
Written by Charlie

Advertiser Disclosure

Southwest sent out an e-mail yesterday to announce upcoming changes to their Rapid Rewards redemption rate for the Wanna Get Away fares (the cheapest fares). Below is the content of the e-mail:

[blockquote]

We want to inform you of an upcoming change to the Rapid Rewards® Program that will affect the number of points needed for reward travel. Wanna Get Away® reward flight bookings made on or after March 31, 2014 will require 70 points per dollar. This is an increase from the 60 points per dollar currently required. Anytime and Business Select® reward flight redemption rates, as well as the points per dollar you earn when flying, will remain the same as they are today.

Rest assured, Rapid Rewards will continue to provide industry-leading benefits that you enjoy today—including unlimited reward seats, no blackout dates, and points that don’t expire*.  We hope you understand that in order to continue providing these benefits, we must make changes to the Rapid Rewards Program from time to time.

[/blockquote]

Bolding and italics are mine above.

Southwest Rapid rewards

So, this means that there is a 15% devaluation on the cheapest of Southwest fares. This makes their current 50K Southwest credit card bonuses worth around $750 (down from over $900). This is quite significant and also quite inevitable. By inevitable, I mean that no airline can basically dole out the points like Southwest has over the last couple of years without having a devaluation coming. The standard Southwest credit card offer is 25,000 points on each card. However, three or four times a year, they run 50,000 point promos – for each of their cards! That is unsustainable. That would mean that eligible Chase customers could rack up 200,000 Southwest points in one year. Something had to break and it looks like it did.

One of the bad things about this devaluation is that it took place with an airline who operates a fixed point rewards system. When a devaluation occurs with an airline like Delta and they raise the cost of their awards for certain markets, while it is a blow, it is still workable. This is because you are still able to redeem for tickets to rare locations or in peak seasons that would give you a point valuation of over 4 cents per mile. With a fixed point program, that is not the case. It is a loss right off the bat with ever ticket that is to be booked.

Strategy

Fortunately, they gave enough of a notice – this goes into effect for bookings made on or after March 31,2014. If you have recently applied for the Southwest credit cards, start lining up your travel soon. The problem is that Southwest does not open their booking calendar too far in advance – right now, you can only book flights through April 6, 2014. So, line up the dates you are interested in and prepare to book them when they come. I would imagine the farthest out that you will be able to book at the current level will be October 1, 2014 (going by their schedule shift). So, if you plan to travel on Southwest after October of next year, you will be forced to redeem at the higher level.

If all else fails, there are always gift cards! 🙂

Editorial Note - Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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About the author

Charlie

Charlie has been an avid traveler and runner for many years. He has run in marathons around the world for less than it would cost to travel to the next town - all as a result of collecting and using miles and points. Over the years, he has flown hundreds of thousands of miles and collected millions of miles and points.
Now he uses this experience and knowledge to help others through Running with Miles.

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