If I Cancel My Sw Card
The Southwest credit cards are some of the almost valuable travel rewards credit cards because they offer bang-up sign-upwardly bonuses and offering y'all a shortcut to obtaining the valuable Southwest Companion Pass. Merely are these credit cards keepers that yous'd want to hold on to subsequently you've squeezed the up-front value out of them? This commodity volition look at why you lot should or should not cancel your Southwest credit cards.
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Your credit score
Before you ever cancel a carte you need to make sure that your credit score is not going to be severely impacted.
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Utilization
If canceling a Southwest credit card will dramatically increment your utilization then yous probably should not abolish, even if you have no existent demand for the card. You might want to wait until you've picked upwards other cards in the future that tin can help y'all continue your utilization low before you lot abolish. You can likewise consider shifting your credit to other Chase cards if possible.
Credit history/historic period of accounts
Also, you desire to make certain that y'all're not cancelling your oldest account. For credit history, which makes up xv% of your credit score, your oldest aged business relationship is the #1 factor so in the vast bulk of circumstances, you lot don't want to cancel that account!
Southwest retention offers
Chase will sometimes offer you memory offers if you've put some spend on your Southwest menu (and they volition even exercise it when yous don't have much spend). Sometimes they'll offering you something like a $30 or $70 statement credit and other times they won't offer y'all anything at all.
You can find data points for these offers here.
Practice y'all wing Southwest?
This is the elementary mutual sense fashion to determine if you need to abolish your Southwest cards. If y'all do not e'er fly Southwest then you're going to accept trouble justifying paying the annual fee for these cards and you might want to abolish them.
The exception would exist if you lot take future plans to fly them since you could bank your anniversary points for that day in the future. If you lot're able to score a retention offering and the ceremony bonus, you'd be coming out on acme big time with these cards.
Ceremony bonus
The first matter to await at is how much value are y'all getting from the ceremony bonuses. If you didn't know, each cardmember twelvemonth, y'all'll be given a certain amount of anniversary points that will exist deposited into your Southwest account.
Here'due south a rundown of the bonuses for the personal Southwest credit cards.
- Southwest Priority Credit Bill of fare = 7,500
- Southwest Premier Credit Card = 6,000
- Southwest Plus Credit Card = 3,000
The first thing to expect at is the value that you get from your anniversary bonus. The value of Southwest Rapid Rewards can vary between 1.4 and 1.7 cents per signal based on my own personal experience with booking Southwest flights.
So I'll simply stick with a valuation of ane.v cents per point for this but you should manifestly value your Rapid Rewards based on the value you await to receive from them on your bookings.
At a valuation of i.5 cents per indicate, the ceremony bonus is going to offering the following value for your cards.
- Southwest Priority Credit Card = $112
- Southwest Premier Credit Carte du jour = $90
- Southwest Plus Credit Card = $45
Now here are the annual fee for these cards:
- Southwest Priority Credit Card = $149
- Southwest Premier Credit Bill of fare = $99
- Southwest Plus Credit Menu = $69
Every bit you can encounter, the value from the ceremony bonuses wipes out a lot of the annual fees for these cards. Allow's go ahead and offset the annual fee and see what the effective almanac fee comes out to with factoring in the value of the anniversary bonus.
- Southwest Priority Credit Card = $37
- Southwest Premier Credit Card = $9
- Southwest Plus Credit Card = $24
Southwest Priority Credit Menu
The Southwest Priority Credit Card'south effective annual fee drops all the mode downward to $37 but that bill of fare 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 almanac travel credit
- vii,500 anniversary points each yr
- Four Upgraded Boardings per year when available.
- 20% back on in-flying drinks, WiFi, messaging, and movies
- No foreign transaction fees
With the $75 travel credit and the $112.fifty in almanac Rapid Rewards, that's value at $187.50 received each twelvemonth from the perks which already offsets the almanac fee. Then there's the upgraded passes which could be worth anywhere from $120 to $200. When yous add on the additional discounts on in-flight purchases and lack of foreign transaction fees, it becomes clear that it's very easy to justify this annual fee.
The only way you don't come out on top is if yous take no utilize for the Rapid Rewards and don't programme on flight Southwest then the $75 travel credit/bonus spending does you no adept. But if you plan on flying Southwest even a couple of roundtrips a year, it should be pretty like shooting fish in a barrel to justify the annual fee for this bill of fare and so you'll want to remember twice about cancelling
You can read more about this menu here.
Southwest Premier Credit Carte
It'south pretty clear that the Southwest Premier Credit Card is almost completely justified by the anniversary bonus. Yous'd only demand to get $9 worth of value from other perks like the bonus spend on Southwest, hotels and rental cars; 1,500 TQP for each $10K in purchases up to $100K; lack of foreign transaction fees; and preservation of your business relationship.
I recall it'south very piece of cake to get $nine worth of value for those things. Plus, if you lot value Rapid Rewards at just a slightly higher number like i.6 cents per point, you'd only need to get $3 worth of value from those perks. So I call back in many cases you won't desire to cancel the Southwest Premier Credit Carte du jour, unless you lot absolutely need to free upwards space for another valuable carte du jour.
Be sure to consider if upgrading to the Southwest Priority is a good choice for you as well (it likely volition in many cases).
Southwest Plus Credit Card
The Southwest Plus Credit Card has an effective annual fee of $24 when yous gene in the anniversary bonus. The problem with this bill of fare is that it doesn't offering much else in the benefits department. It has foreign transactions fees of 3% and doesn't allow you to earn points towards A-list Condition.
Then I personally would expect to upgrade this carte du jour to the Premier or the Priority Card if I flew Southwest. It will be much easier to get your value back with the Southwest Premier and the Southwest Priority bill of fare for most Southwest customers, even if they are not frequent flyers. And so when it comes to the Southwest Plus carte du jour, you'll probably want to ditch it for something else.
And if you don't fly Southwest and have no plans to wing Southwest, so the Southwest Plus Credit Card really probably has no place in your wallet.
If you lot want to cheque out a comparing between Southwest credit cards check out the table below.
| Features | Southwest Priority Credit Card | Southwest Premier Credit Menu | Southwest Plus Credit Card |
|---|---|---|---|
| Sign-up Bonus | 40K for $1K spend in 3 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 automobile 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 year when available. | None | None |
| In-flying Discount | 20% back on in-flying drinks, WiFi, messaging, and movies | None | None |
| Foreign Transaction Fees | None | None | iii% |
| Points towards A-list Status | 1,500 TQP for each $10K in purchases up to $100K | 1,500 TQP for each $10K in purchases upwardly to $100K | None |
| Annual Fee | $149 | $99 | $69 |
Do you lot keep points?
If you lot cancel your Southwest bill of fare after points have been added to your Rapid Rewards account, you will keep those points in your account.
Terminal word
Equally you lot can tell, information technology'southward usually not worth it to abolish your Southwest credit carte du jour because of the value of the almanac bonuses and the boosted perks provided by the card. Unless y'all take no current or time to come plans to fly Southwest or other unique situation (e.yard., y'all demand an open up credit carte du jour slot with chase), you'll probably want to hold on to your Southwest cards and permit your accounts historic period while you take reward of their perks.
Cover photo by BriYYZ via Flickr.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned total-fourth dimension credit menu rewards/travel good 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 Mag, Forbes, CNBC, Usa News, and Business Insider. Find his full bio here.
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