How Does a Southwest Credit Card Work? - NerdWallet (2024)

If you're going to travel on Southwest Airlines, it pays to have one of the airline's credit cards. Cardholders automatically earn extra points on Southwest purchases, not to mention a bonus each year the card is renewed, amid myriad other benefits. So how does a Southwest Rapid Rewards credit card work? Here, we'll go over how many points you can earn with it and the perks you'll receive as a cardholder.

How travel credit cards generally work

Travel credit cards are a way for cardholders to earn points or miles that can be redeemed later for free flights, hotel stays and other services or items. Specifically, co-branded airline credit cards, like the Southwest Rapid Rewards credit cards, offer bonus points on airline purchases (and sometimes other categories) so that members can earn rewards more quickly.

Similar cards exist for hotel frequenters, too, but for the purposes of this explanation, we'll stick to airline cards.

Many airline cards include automatic benefits just for being a cardholder, like access to upgraded boarding passes each year. Other cards may offer additional perks, such as elite status credits or lounge access.

The points that you earn from the credit card are fed to your airline loyalty program account after the statement closes each month. Once the points have been posted, they are yours to redeem. This type of credit card thus makes it faster to accrue enough points for an almost-free award flight. These points are earned on top of the points accrued by flying with the airline.

Southwest credit cards

Southwest Airlines offers several credit card options based on your budget and the perks that are most appealing to you. In addition to consumer credit cards, they offer business versions for entrepreneurs and small-business owners.

These are the five Southwest credit cards that are currently available, along with their annual fee:

Three of the cards are for personal accounts, and two are set up for businesses. You can have two Southwest credit cards if you apply for one personal card and one business card. Just keep in mind the Chase 5/24 rule.

Sign-up bonuses for these cards typically range from 40,000 points to 70,000 points, but the airline is currently running a special bonus for all three personal cards: Limited-time offer: Earn Companion Pass® good through 2/28/25 plus 30,000 points after you spend $4,000 on purchases in the first 3 months from account opening.

Figuring out which Southwest Airlines credit card to get will ultimately come down to your budget and preferred benefits. For instance, if you want access to a $75-per-year Southwest travel credit, then you'll need to sign up for the Southwest Rapid Rewards® Priority Credit Card. This perk alone essentially slashes the card's annual fee in half.

How points work with a Southwest credit card

Earning Rapid Rewards points

As a cardholder, how many points earned per dollar with the Southwest credit card depends on which card you have and where you're making a purchase. In most cases, you'll earn the most points when making purchases with Southwest or its hotel and rental car partners.

This chart shows how many points you'll earn with Southwest, on bonus categories and on other credit card purchases.

Redeeming Rapid Rewards points

Once you've earned Southwest points from your credit card and they're deposited into your Rapid Rewards account, they never expire.

Most travelers redeem points for flights on Southwest Airlines. According to NerdWallet’s analysis, Southwest points are worth about 1.5 cents each on average. So to book a $120 flight, you can expect to pay about 8,500 Rapid Rewards points.

You can also redeem points for merchandise, international flights operated by other airlines, hotel stays, gift cards and rental cars. However, Rapid Rewards points can't be redeemed for other Southwest charges, like pets, extra bags, unaccompanied minors, security fees or drinks.

Redeeming points for a flight is simple. Go to Southwest.com and enter details for your flight search as normal. Then, click the "Points" option before clicking "Search."

Other perks of holding a Southwest credit card

Earning Southwest Rapid Rewards points on your purchases isn't the only benefit that you'll receive from being a cardholder. Card benefits vary depending on which Southwest credit card you have, but here are some additional perks you could get with your Southwest card:

Can you use a Southwest card anywhere?

Yes. Visa cards are accepted everywhere that credit cards can be used to pay the bill. Aside from the Southwest Rapid Rewards® Plus Credit Card, Southwest credit cards are good for international travel as well because they don't charge foreign transaction fees.

Is a Southwest credit card right for you?

For people whose preferred airline is Southwest, having a Southwest credit card makes sense. You'll earn points on everyday purchases, plus additional points when paying for Southwest flights, hotel and rental car partner reservations, local transit and commuting, and other bonus category purchases.

With Rapid Rewards points valued at 1.5 cents each, the anniversary bonus can offset a majority of the annual fee on any Southwest card. For example, the Southwest Rapid Rewards® Priority Credit Card has a 7,500-point anniversary bonus, which is worth $105. Combine that with the card’s annual $75 Southwest travel credit, and you’ve already compensated for the $149 annual fee. What's more, the card's other benefits add value that frequent travelers will appreciate.

If you're considering a Southwest credit card

Now that you know how Southwest Rapid Rewards credit cards work, consider whether it makes sense to add a credit card from this airline to your wallet.

As you evaluate the options, think about how you plan to use your card. For instance, while the Southwest Rapid Rewards® Plus Credit Card has the lowest annual fee, it doesn't offer the same level of benefits as the other personal cards.

For travelers who spend at least $150 flying with Southwest a year, the best option is the Southwest Rapid Rewards® Priority Credit Card. With the anniversary bonus and $75 annual flight credit, the benefits outweigh the annual fee. Plus, it earns 50% more points on Southwest purchases than the Southwest Rapid Rewards® Plus Credit Card, includes four upgraded boardings each year and has no foreign transaction fees.

Photo courtesy of Southwest Airlines.