When to Close a Southwest Card for Max Value
A lot of you already have had a Southwest card (or still have one) and are trying to figure out what to do with it while going for the Companion Pass. And some of you like to plan ahead for the future!
When To Close a Southwest Card for Max Value
Timing your card closure can help you (1) earn more points and (2) be primed to get another Companion Pass in a few years.
Consideration 1: Anniversary Points
Every current Southwest card gives you some anniversary points on your cardmember anniversary. These typically post to your Southwest Rapid Rewards account a few days after you get your credit card statement that also has the annual fee posted. These are only available after you have had the card a full year.
Ideally you will wait to cancel the card until you get your anniversary points.
Yes, your annual fee has posted but as long as you call within 30 days of it posting -- you will be able to get the fee refunded.
Consideration 2: Referral bonuses
If you are in “2 person mode” (Whether that's in your household or because you are teaming up with a friend to leverage referral bonuses) -- you'll want to take this into account for your strategy.
If you hold any Southwest card, you can currently refer another person to any Southwest card and earn 20,000 Rapid Rewards points if they apply and are approved. You can generate a referral here.
If you aren't going to be using a referral link from a friend/family member/etc, I really appreciate when you use my affiliate links as it directly supports my business and allows me to create free resources.
Consideration 3: Benefits
We like a lot of the benefits of the Southwest cards! The Southwest Rapid Rewards® Priority Credit Card is a bit pricey, in my opinion, but I really like getting assigned seats when I book and I really like when I can upgrade to Extra Legroom seats, too.
Because we find value (and peace of mind) in the benefits, I'm only going to cancel this card if it means I'm about to re-open the card to earn another welcome bonus.
Example for current cardholders
Let's use an example of a couple, Jack and Jill. This is a specific example for a simple strategy for closing Southwest cards when you're getting ready to earn one Companion Pass.
Jack will be the one trying to earn the Companion Pass.
But Jill has a Southwest card because she previously earned a Companion Pass.
Before Jill cancels her Southwest cards, she will:
- Refer Jack to both the business and personal Southwest cards. She will earn 40,000 points this way (20,000 points each)
- Jill will wait for those referral points to post before she even considers closing her card. She knows 40,000 points is worth almost $600 of travel on Southwest, so that's well worth paying a $99, $149, or $229 fee to make sure to earn those referral points.
- When her annual fee posts, she will make sure she gets her anniversary points.
- If after she's gotten her anniversary points and referral points she's still within 30 days of her annual fee posting -- AND she doesn't think the benefits are worthwhile -- she can call to cancel her cards. While she's on the phone she will confirm they are refunding the annual fees.
Consideration 4: If you want to earn a Companion Pass and already have a Southwest personal card
You can only hold one Southwest personal (i.e. non-business) card at a time. You are allowed to hold both business card versions. IF you want to earn a Companion Pass and currently hold a Southwest personal card, you have three paths to the Companion Pass.
PATH ONE: You can keep your Southwest personal card and then open both business cards to earn enough points for the Companion Pass.
PATH TWO: You can cancel your personal card. Then after you wait 14-30 days, you can apply for the exact same card or other personal card version.
Then you could also apply for one business card. If you're on this path, I suggest you close any Southwest card that you want to reapply for 14-30 days before you'd like to open it again.
PATH THREE: You follow the three card/two pass method I outlined in this course. In this case, your course of action will depend on which “player” you are this year.
