UPDATE: This post was accurate at the time it was published, and may not represent current offers.
As we get within sight of the New Year, I thought I’d prepare you for what could potentially be a great opportunity on the horizon. It’s the chance to earn possibly the best award in domestic travel for nearly 2 full years. I got my Southwest Airlines Companion Pass back in January, and I was just about to post the info so more people could take advantage when the deals that made it possible disappeared. But now that they are back, it’s time for you to start planning on how you can get this amazing benefit for yourself starting early next year so that you can save a ton of money on flights.
The Southwest Airlines Companion Pass allows you to choose a travel buddy to fly free with you wherever you go. Normally, to get this award through flying alone, you’d need to fly one roundtrip just about every single week of the year. Southwest makes it a bit easier if you use their partners to rack up extra points through activities like renting a car or booking a hotel through their site.
But if you have a small business and want to earn this award quickly and maximize your benefit, you can sign up for 3 credit cards to get the 110,000 points you need in one calendar year.
- Chase Southwest Rapid Rewards Personal Premier (50K points, spend $2K in 3 mos) Apply here
- Chase Southwest Rapid Rewards Business Plus (same as personal) Apply here
- Chase Marriott Rewards Premier (50K Marriott pts after 1st purchase) Apply here
Now the first thing you’ll probably notice is that all 3 cards are from Chase, which has a policy of only allowing one personal application per month. Assuming you haven’t signed up for a bunch of credit cards recently, you can sign up for the business card and a personal card on the same day, then wait a month to sign up for the third card. If you get declined for one, they have a reconsideration line where they make every effort to get you approved after asking you a few questions. You can be truthful and tell them the reason you are signing up for these cards is to diversify your credit card portfolio which helps you maximize the awards you want to get.
Making this work requires a bit of careful planning. You have 3 months to complete your $2,000 worth of spending, but if you want the points to post for 2013, you need to plan your spending so that you reach the $1,000 thresholds during the statement period that will close in January. You don’t want to complete the spend thresholds any earlier, or the points will post in 2012. If that happens, you won’t get the benefit for the full 2 years, and you risk having some points post in December and some in January, and in that case you wouldn’t get the Companion Pass at all because the points must be earned in the same calendar year.
That might sound a little complicated, but it boils down to 3 simple steps:
- In early October, sign up for a personal card (either Southwest or Marriott) and the Southwest Business card on the same day. Why October? It’s early enough that the current deals are still likely to exist, and late enough so that your 3 month window to complete the $1,000 spend threshold goes until January.
- In November, sign up for the personal card you didn’t get in October.
- Complete your two $1,000 spending requirements on the Southwest cards for the January statement, and make at least one purchase with your Marriott card.
Easy, right? Each Southwest card gives you 50,000 Southwest Points, and the Marriott card gives you 50,000 Marriott Rewards points (and a free night at a category 1-4 hotel) which transfer to Southwest at a 3:1 ratio. So 30,000 Marriott points gives you the final 10,000 you need to earn your Companion Pass. In other words, you’ve earned their top award without even getting on a plane. And of course, you will still have 110,000 Southwest points to use, worth about $1700. Perhaps best of all, your companion can fly with you when you book with points, and that doubles the value of your points! All you pay for this is $198 in total credit card fees. So $3400 or more in free flights, for about $200. It really is an amazing deal!
One other tip I learned from personal experience is that you can book a flight for yourself before you officially earn the pass and then you can add your companion onto the reservation afterwards. So if you find that great fare to your dream destination, you can buy it now and then pay only the TSA tax for your travel partner later. In fact, you can add your partner up to 1 hour before the flight with no extra fees.
With Southwest’s recent acquisition of AirTran, there are a number of possibilities that could make the Companion Pass even better. For one, AirTran flies to some great international destinations like Bermuda, Mexico, and Aruba. Nothing official has been announced, but from what I hear, and this comes directly from a Southwest representative, the most likely plan is to simply have Southwest take over more and more of Airtran’s routes, until eventually, Airtran fades away. So it seems plausible that the Companion Pass will be valid for current AirTran routes at some point over the next two years. Half price to the Caribbean? Yes, please!
Of course, even if the AirTran dream doesn’t come true, the Companion Pass allows for many great possibilities within the US. Cassie and I plan on taking about 1 weekend trip per month to various destinations like Portland, Seattle, San Diego, Austin, San Antonio, Orlando… you get the idea.
A special thanks to the travel finance blog, Million Mile Secrets, who turned me on to this idea in the first place. The links to credit card signup offers go through his’ affiliate deals. I was not compensated for this post, and I have no relationship with him other than I read his blog.
You are a genius! I want to try this, but you have to own a small business, right?
Kevin Adams says
It doesn’t have to be a big small business, and you can use your personal SSN, so you don’t need a business Tax ID. You could have a personal crafts business, or be a self-employed contractor, or even write a blog! A lot of people are already running personal side businesses and didn’t even realize that they can get major benefits from that.
Um…you do know that opening three credit cards in short succession means thee hard inquiries to your credit score. Not to mention the fact that you will have to continue paying credit card fees each year thereafter, unless you cancel all three cards (which would mean a further hit to your credit). Thoughts on whether or not it’s worth it?
Kevin Adams says
Hi Randy, those are great points, thanks for reading! There will be a temporary hit to your credit when you apply for these cards, but for some people (and this happened in my experience), after a few months, the credit score can actually go higher after a period of proven “creditworthiness.” All kinds of factors go into the various scores, but another is ratio of debt to credit, and having more credit improves the score in this area. Long story short, if you will need a very high credit score in the short term, for a mortgage or car loan, for example, something like this is probably not a good idea. But if you have 6 months to a year before you need a loan, this could be very lucrative.
As for the annual credit card fees, each card presents its own question. In the case of these cards, you actually get a yearly benefit equal to or greater than the fee. For example, I fly Southwest all the time, so paying a $99 yearly fee is worth it to me because it results in $100 worth of credit on the airline. It’s a wash for me. Your situation may be different. In the case of the Marriott card, you get a free category 1-5 room every year, and if you maximize the value there, you can make pretty good use of the $85 fee. Of course, you could also choose to drop the card, which affects the average age of your account, which is another criteria. And in a case with another card (Citi American Airlines Visa), I called the company to cancel after a year and they waived my annual fee and offered incentives for me to keep it. How could I refuse? So each case is different.
All of this really means that you should be surgical in deciding what cards to sign up for and do it in moderation. And if you’re going to have a credit card, you should make sure you get benefits from using it. This method is a great way to get a VERY cool benefit, but you’re right, it isn’t for everyone.
how about now, december 2012 signing up for the cards, whats the advantage or disadvantage, would you do it now,thanks
Kevin Adams says
Great question! I’d actually say that if you feel like this deal is for you, then now is the perfect time since you can maximize the period you’ll have the companion pass! If you make your first purchases with your new Southwest Cards so that the bonuses will post in January of 2013, you will have the companion pass for all of 2013 and all of 2014, nearly a full two years. It’s pretty awesome. I did this deal at the start of 2012, so I’ll have my pass for another full year. It’s saved me truckloads of money.
But like I said, it’s not for everybody. If you’re at a place in your life where you can handle a possible temporary hit to your credit score, it could be a good idea. Again, I’m not benefiting from this post at all, those aren’t my affiliate links, so I’m pretty unbiased, I think.
thanks, i just received a 50,000 southwest signup bonus in the mail, so i will use it, get a business card and marriot card and should be OK. I should be great on my credit score, 800 plus, so how big a hit do you think I will take, thanks
Kevin Adams says
I’m not a credit expert, so I can only go by my own experiences and can’t give you any hard facts or solid advice, but the hit I took in the very short term was minimal, and has since recovered, and I haven’t had any problems securing new credit. Cassie’s score has actually gone up after signing up for some cards (though not this specific set because she’s my companion, hehe). Everyone’s credit situation is going to be different, but my guess is you’ll be ok. You can always ask around to find more expertise on this, and if you feel uncomfortable, I’d recommend doing that. Sounds like you’re very careful about your credit, but I wouldn’t want anyone else to take this offer without careful consideration and then later get into credit trouble somehow.
i see the southwest business card only gives 25K miles not 50K, any ideas
Kevin Adams says
I updated the links in the article to point to 50K offers now. They require $2k spend in 3 mo’s, that’s the only difference, which might be a big deal in some cases since it now means you have to spend $4K for the two SW cards, and I never recommend spending more money than you otherwise would (unless the benefit you would get is worth it, which might be the case here).
I am 9800 points shy of companion pass on Southwest. On Dec. 21st I transferred 14,000 points from Choice Hotels to reach it. My question is, do you think these points will be posted in time or should I buy enough points from Hyatt. They seem to post in 24 to 48 hours. Just don’t want to miss out. Any help would be GREAT!!