Originally Posted by vacayseeker

Yes, the CP is valuable, but once you get the CP, why continue to put spend on SW Visa cards? Isn't the incremental value of getting RR points through CC spend lower than a 2% back CC? Or am I missing something here...?

Originally Posted by JL100

The CP does not increase the earnings rate on any card and people need to remember it has a separate value whether used with a cash purchase or with points. Also, I would say the points earned to get the companion pass are the valuable ones - once you have it, points are not worth twice as much since you are going to fly free either way on the CP. Spending points on the non-companion are not twice as valuable, they only save the purchase of 1 ticket.

Originally Posted by FCfree

I would like to offer an alternate viewpoint.

First, no doubt, this was a devaluation. In one flight I was tracking, it used to take 10,477 points and now takes 11,375 points with no change in the airfare ($175.10 all-in). On another flight, no change yet (70pts/$).

The devaluation is there, but it is not severe. Isn't it better to have it be an unknown rate between 70pts/$ and 80pts/$, rather than just shifting to a fixed 80pts/$? Yes, it could in the future go even higher, but I'd rather have it in a range (70pts to 90pts, for example) than a fixed higher value (depending, of course on how often I can get flights for 70pts/$). Sure, I'd like it back at 60pts/$, but devaluation of points/miles is happening everywhere in the airline industry. I don't love it, but what are you going to do about it? Same as the price of a new car continuing to rise. Inflation (devaluation of money) continues to happen.

To me, the more important questions are:
-- Should I continue to charge things on my Southwest VISA?
-- Should I continue to fly with Southwest, or is there a better deal out there?

Let's Explore:

On my example above where the flight was 10,477 points and now is 11,375, I would argue that my "cash back bonus" changed from 1.62% down to 1.49%. I compute this by taking the all-in price, less the $5.60 security fee (so, $169.50) and divide that by the spending I have to do to get that ticket (assume it is mostly $1 of spend generates 1 point). I include the tax because by using points, I don't have to pay it, thus it is value to me. I avoided a $169.50 expense by spending $11,375 (previously $10,477) on a credit card.

Now, granted with the "unknown point redemption" method now in place, I don't know exactly what cash back bonus I am getting. Still, it would seem that it is always above 1%.

So, to me that says, watch Discover card. There is always a 5% cash back bonus (this quarter it is restaurants). All restaurant charges go to Discover. They are also running a promo of spend $2,000 per month for 5 months and get an extra $300. So, do that because it is approximately a 3% cash back bonus on top of the 1%. (Promo may be targeted and you had to start on January 1).

After the $2,000 spend on Discover, shift over to Southwest VISA for the remainder of the month because the points are worth more than the 1% you get at Discover (which is slightly over 1% if you redeem for a gift card).

Its still a way better deal at Southwest than at say, United. You've got to spend about $12,500 to get 12,500 miles ... and then its iffy if you will get a free one-way ticket. Unlikely it will be a $175 ticket. So you might have to spend $25,000 to get a free one-way that might be worth $200. Less than 1% cash back ... so the answer is obvious (Southwest beats United, Discover beats United).

There might be occasion where United or American might be the better flight choice. A really low fare (say $200) for cross-country, where you get a lot more miles than you would get Southwest points, would suggest considering United. But, remember it takes a lot more miles than points to get a free ticket. And you have those pesky bag and change fees to factor in (bag fee might be waived with the credit card). Depends how often you are making the cross-country flight and who is ultimately paying for the trip (you vs. employer).

Now ... people do report amazing deals sometimes ... 36k miles on American for either one-way or round trip to Europe. If you want to roll the dice on that and you get it ... cool. But, that is more uncertainty than the Southwest program (is the ticket for low points really going to be available when you want to go and can go?)

I'd say ... fly with United and American when you have to. UA/AA if you are going to Manchester, England, SWA if you are going to Manchester, NH, for example.

You've also got to assign some value to the fact that with Southwest, if you cancel a flight booked on points, you get a 100% refund with no charges. Can't do that with any other airline. And, of course there is Companion Pass if you can get it and keep it. Companion Pass pretty much seals the deal because if it is even close between SWA and somebody else, when you double the deal at SWA, there is no way anybody else can compete.

So bottom line -- was it a devaluation? Yes.

Was the devaluation such that it changed how and where you should charge and who you should fly with? Seems to be generally no, although there might be a few limited exceptions. I think most of those exceptions were out there before the devaluation.

Originally Posted by penguintalk

Wouldn't you be way better off using something like the Barclaycard Arrival+?

The $10,477 you reference spending would give you $209.54 for the 2% back, then another 10% bonus upon redemption for travel. This seems to put you way ahead since your expense referenced is $169.50 and you can still get Southwest point anyway by booking through their website.