Southwest Rapid Rewards® Plus Credit Card review: Respectable perks and rewards at a low asking price

The Blue Cash Preferred® Card from American Express, for example, lets you earn 6 percent cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then it’s 1 percent), 6 percent cash back on select U.S. streaming subscriptions, 3 percent back at U.S. gas stations, 3 percent back on transit and 1 percent back on everything else (cash back is received in the form of reward dollars that can be redeemed as a statement credit or at Amazon.com checkout.) Be aware that it does carry a $0 intro annual fee for the first year, then $95. annual fee after the $0 intro annual fee for the first year.

If you’d prefer a no-annual-fee card that helps you earn more rewards on the widest variety of purchases possible without a spending limit to worry about, the Wells Fargo Active Cash® Card rewards you with unlimited 2 percent cash rewards on purchases.

It also comes with other perks not found in the Southwest Rapid Rewards Plus, such as cell phone protection and a solid introductory APR offer on purchases and balance transfers. While it may not be ideal for traveling, it can easily cover your everyday purchases.

The Southwest Rapid Rewards® Premier Credit Card, with a newly increased fee of $149, is the next step up in the Southwest lineup of cards

The Premier card charges a higher annual fee than the entry-level Rapid Rewards Plus card, but the Premier offers several advantages and upgraded benefits in return. The Premier card’s doubled 6,000-point anniversary bonus also helps cover the $30 annual fee increase (worth an extra $45 at an estimated value of 1.5 cents per point). This and the Premier card’s bonus Tier-Qualifying Points (1,500 TQPs per $10,000 spent annually) toward Southwest elite status make a valid case for skipping the Rapid Rewards Plus in favor of the Premier.

Although it has a $95 annual fee, the Chase Sapphire Preferred® Card earns 3X points on dining and online grocery purchases. It also earns 5X points on travel booked through Chase, beating out the 2X points the Rapid Rewards Plus earns on Southwest flights.

Along with offering a lower rewards rate, the card’s points may offer less redemption value than other Chase card rewards. Bankrate’s latest points and miles valuations currently peg the value of Chase Ultimate Rewards points at 2.0 cents per point on average when you transfer to a top travel partner, while Rapid Rewards points are worth just 1.5 cents per point on average. This means the Rapid Rewards Plus can quickly fall behind in value on travel purchases. 

For example, here’s a quick look at how the reward value breaks down between these two cards when you book a $600 round-trip flight with Southwest Airlines.

• Southwest (direct): $600 x 2X points = 1,200 points x 1.5 cents per point = $18 in value
• Chase (via Ultimate Rewards portal): $600 x 5X points = 3,000 points x 2.0 cents per point = $60 in value 

Yes, you can upgrade your Southwest Rapid Rewards Plus to Southwest’s Premier or Priority card by calling 1-800-792-0001. It could take up to four business days to process and approve your upgrade request, plus another seven to 12 days to receive your new card in the mail. 

Upgrading your card rather than canceling and applying for a new card is a smart move since you’ll avoid the credit score impact of requesting new credit and closing an active account. You also won’t lose any of your rewards by switching cards, but keep in mind that you probably won’t be able to qualify for your new card’s sign-up bonus since you technically aren’t opening a new card (you’ll have the same credit account as before).

A good to excellent credit score (a FICO score or 670 or higher, or a VantageScore of 661 or higher) will give you the best approval odds when applying for the Southwest Rapid Rewards Plus. The higher your credit score, the better your chances will be.

Yes. The Southwest Rapid Rewards Plus card’s $99 annual fee is completely offset by the value from the 3,000-point anniversary bonus and two complimentary EarlyBird Check-In® boarding upgrades you’ll get each year. It would only take about $206 in purchases per month across all of your 2X bonus category purchases to break even on the annual fee through rewards spending alone, so the annual fee is certainly worth it for frequent Southwest flyers.

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, sign-up bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to data from the Bureau of Labor Statistics.

Based on this data, we determine a “chargeable” spend (which purchases are likely to be put on a credit card and earn rewards). This includes the following spending by category:

• Groceries: $5,200
• Dining out: $3,000
• Entertainment: $2,500
• Gas: $2,100
• Apparel and services: $1,700

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 23 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s sign-up bonus value

With these calculations complete, we assign each card a score based on how its average rewards earnings, sign-up bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance.

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards.

We also score each card based on how its annual fee influences its overall value.

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee.

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score.

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners.

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. We break down these tiers as follows:

• Tier 1 has less-than-standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits.
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges.
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection.
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs.
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuable perks.