Southwest rapid rewards credit card foreign transaction fee

HOW TO CHOOSE THE RIGHT SOUTHWEST AIRLINES CREDIT CARD FOR YOU

Choosing a Southwest Airlines credit card can be tricky because differences between the three consumer cards may seem subtle at first glance. But you receive progressively more value from the cards with higher annual fees.

The basics at a glance

What differentiates these cards?

Annual fee

The annual fees aren't exorbitant for any of these three cards when compared with some premium travel cards, but you’ll have to decide whether the higher fee is worth it for the Southwest Rapid Rewards® Premier Credit Card or the Southwest Rapid Rewards® Priority Credit Card. There isn't a no-fee version of this card.

Anniversary points

This is a primary difference in benefits. The Southwest Rapid Rewards® Premier Credit Card gives you twice as many loyalty points annually on your account anniversary date as does the Southwest Rapid Rewards® Plus Credit Card: 6,000 Rapid Rewards points, as opposed to 3,000. Considering the value of a Rapid Rewards point, the extra anniversary points can make up for the difference in annual fees between those two cards.

Anniversary points grow to 7,500 with the Southwest Rapid Rewards® Priority Credit Card. While that's not enough value on its own to offset the card's annual fee, it's also not the only lucrative benefit you get with it, either.

NerdWallet values Southwest points at 1.5 cents each. This is a baseline value, drawn from real-world data on hundreds of economy routes, not a maximized value. In other words, you should aim for award redemptions that offer 1.5 cents or more in value from your Southwest points.

🤓Nerdy Tip

All Southwest cards used to earn the same 2X rewards on Southwest purchases, but as of Oct. 19, 2021 the cards' rewards were refreshed. The Southwest Rapid Rewards® Priority Credit Card and the Southwest Rapid Rewards® Premier Credit Card now earn 3X points per $1 spent on Southwest purchases.

Foreign transaction fee

If you’ll be using your credit card abroad, you’ll want one that doesn’t charge a foreign transaction fee, like the Southwest Rapid Rewards® Premier Credit Card or the Southwest Rapid Rewards® Priority Credit Card. The 3% fee can add up on the Southwest Rapid Rewards® Plus Credit Card.

Tier qualifying points

The short story here is that it's a minor benefit unless you're a huge spender. For most, it shouldn't sway the decision.

The two pricier cards allow you to earn tier qualifying points which count toward A-List and A-List Preferred elite status. Its benefits include priority boarding and bonus rewards points for each flight. The cheapest card earns no points toward elite status.

The Southwest Rapid Rewards® Premier Credit Card earns 1,500 “tier qualifying points” (TQPs) for each $10,000 in purchases, up to $100,000 annually. The Southwest Rapid Rewards® Priority Credit Card also earns 1,500 TQPs per $10,000 spent, but offers the ability to earn an unlimited amount of TQPs. That means that heavy spenders can charge their way all the way to A-List status if they choose.

Overall, qualifying points earned by the Southwest Rapid Rewards® Premier Credit Card and the Southwest Rapid Rewards® Priority Credit Card don’t move the needle much. An extra 1,500 qualifying points for spending $10,000 would account for only about 4% of your 35,000-point requirement for the lowest elite level. And tier qualifying points won’t help toward securing a highly coveted Companion Pass, because those passes are earned via Rapid Rewards points (or very occasionally via the sign-up bonus.) So consider the extra tier qualifying points as a modest boost to ones you earn with your regular flying on Southwest.

Priority benefits

There are reasons to be tempted by the priciest card, the Southwest Rapid Rewards® Priority Credit Card. It includes day-of-flying perks that the other cards don't, such as:

• A $75 Southwest annual travel credit, which can be used toward Southwest purchases such as flights, pet carrier fees and other day-of-travel purchases.

• Up to four upgraded boardings per year, based on availability.

What's the same on all the cards?

Sign-up bonuses

Bonuses for new cardmembers can change often, but if pricier cards get you a bigger head start toward earning free flights or a Companion Pass, that's something to consider.

Besides the differences above, all three cards earn the same spending rewards and charge the same APR.

🤓Nerdy Tip

Typically, one of the biggest perks of a co-branded airline credit card is free checked bags, which can quickly justify the annual fee. However, that is not a factor with these cards because Southwest does not charge for the first two checked bags, making it the only big U.S. carrier without a bag fee. So these Southwest Airlines credit cards play no role in free checked bags.

Other choices

An airline card is not your only choice. General travel credit cards offer rewards that can be used on various travel spending, not just a single airline. Redeeming rewards for credit against a Southwest Airlines purchase or other travel spending essentially "erases" it from your balance. That makes these cards a good choice for people who spread their business around.

Or consider a card like the Chase Sapphire Preferred® Card. It earns points that can be transferred to Southwest’s Rapid Rewards program at a 1:1 ratio. It has an annual fee of $95, and it comes with an outstanding sign-up bonus: Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®.

What’s more, a NerdWallet study shows most people would be better off with a cash-back card, rather than a travel card of any flavor.

Making the decision

If you don’t care about earning elite status on Southwest, won’t use the card abroad and can’t stomach higher annual fees, go with the cheapest card, the Southwest Rapid Rewards® Plus Credit Card.

A good middle choice is the Southwest Rapid Rewards® Premier Credit Card. Its higher annual fee is equalized by the extra anniversary points it offers, assuming you use the points toward a flight. It eliminates foreign transaction fees and offers minor progress toward elite status on the airline.

Avid Southwest flyers who appreciate perks on the day they fly should consider the pricier — but potentially most lucrative — Southwest Rapid Rewards® Priority Credit Card. It lacks some of the luxury benefits you'll find some premium travel credit cards, but it still packs enough value to offset its annual fee.

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