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Easy Guide to Getting the Southwest Companion Pass

June 21, 2015 By Will 2 Comments

The Southwest Companion Pass is magical. It allows you to designate a companion who can fly with you for free on each flight you take for the remainder of the year you earn it plus the next year. If you maximize this benefit you’d be able to get nearly two years of two-for-one flying on Southwest. Plus, as part of earning the Companion Pass you’ll also rack up a significant balance of Southwest miles.

With the Southwest Companion Pass your companion can fly for free with you to the Bahamas!

Unlike other airlines that sometimes issue “companion passes” as a one-time coupon for a discounted fare, the Southwest Companion Pass is extremely simple to use and isn’t bogged down by fine print or complex processes.

Once you have your Companion Pass you simply designate your companion by name. Then when you book a flight with Southwest, whether paying with miles or cash, you’ll click a button to add your companion to your itinerary. That’s it. When I first tried it I figured I was missing something because it was too easy. To be clear, by the end of this, you’ll have 110,000 Southwest miles and you’ll also be able to take a companion with you for free!

I earned the Southwest Companion Pass in 2014 which meant that my wife was able to fly with me for free during 2014 and 2014. During this time we took trips to Seattle, Las Vegas, Boston, Philadelphia, Chicago, and Cancun. We were both able to fly to all of these destinations for less than $300 total! If we’d bought those tickets on our own without miles and a Companion Pass we would have spent over $3,000!

Don’t worry, I’m going to explain exactly what we did and how you can earn your own Southwest Companion Pass. I’ve also helped three family/friends earn Companion Passes so the method below definitely works.

How to Earn Your Southwest Companion Pass

Southwest gives you two different methods for earning the Companion Pass. You can either fly 100 one-way flights in a calendar year (no thanks) or you can earn 110,000 qualifying Southwest points in a calendar year. As I’m sure you guessed, you’re clearly going to be earning your Companion Pass by earning 100k Southwest miles.

If you’re new to the miles game you’re probably thinking that’s a ton of miles, but don’t sweat it – Chase has got your back. Chase is constantly offering credit cards which allow you to earn 50,000 Southwest points that count toward the Companion Pass. With two of these cards you’ll receive 100k Southwest points quickly.

The Chase Southwest Credit Cards

Chase currently offers three different credit cards – two personal and two business cards (although Chase has recently been removing mention of the SW Plus Business). There’s a “Plus” and a “Premier” variant. They’re pretty similar, but here’s a quick breakdown:

Chase Southwest Plus

Annual Fee: $69 (not waived)
Anniversary Bonus: 3,000 points each year you keep the card open
Foreign Transaction Fee: 3%

Chase Southwest Premier

Annual Fee: $99 (not waived)
Anniversary Bonus: 6,000 points each year you keep the card open
Foreign Transaction Fee: None

Chase Southwest Premier Business

Annual Fee: $99 (not waived)
Anniversary Bonus: 6,000 points each year you keep the card open
Foreign Transaction Fee: None

Note: The sign-up bonus on the Southwest cards often fluctuate between 25k and 50k. If you’re looking at this during a time when the sign-up bonus for one of the cards is only 25k you should probably apply for one card now and wait to apply for the second card until the bonus increases.

Applying for the Southwest Cards

There are two different fields of thought when it comes to the Chase Southwest applications. Some prefer to apply for a personal card and a business card at the same time. It’s possible to get approved for a business card as a sole proprietor earning money on the side. Here are links for the various cards:

For my credit card applications I applied to both Southwest personal credit cards within minutes of each other. If your second application goes pending you should call the Chase reconsideration line at 888-245-0625 and ask if there’s any additional information you can provide. Usually this call will get your application approved. You could also opt to apply for one card now, and a second card in a couple of months once you’d reached the minimum spending on the first card.

Once you get approved for both cards you’re going to need to meet the minimum spending thresholds in each. Check the conditions of your offer, but typically you have to spend $2,000 on the card within three months. The sooner you complete this the sooner you’ll get your points.

Once you’ve reached the spending threshold on each card you’ll have 104,000 Southwest Rapid Rewards points (100K from sign-ups + 4k from spending). At this point you’ll then need to earn an additional 6,000 Rapid Rewards Points. The standard way is to simply spend $6,000 more on the card and you’ll have your points. There are tons of other ways to earn these points, but here are a few of the highlights:

12,500 Ultimate Rewards -> 12,500 Hyatt -> 6,000 Rapid Rewards

If you have Ultimate Rewards points from a prior Chase credit card then you can obtain Rapid Rewards Points, but you can’t transfer directly! Points transferred directly from Ultimate Rewards to Southwest Rapid Rewards won’t count toward your pass. However, you can transfer from Ultimate Rewards to Hyatt and then to Southwest. Unfortunately, you’ll lose points along the way. You’ll need to transfer 12,500 Ultimate Rewards to Hyatt points and then transfer those to Southwest at a 25:12 ratio to end up with 6,000 Rapid Rewards.

30,000 Marriott Points to 10,000 Southwest Rapid Rewards

Marriott offers the ability to transfer its points into many different programs. You can transfer 20k Marriott for 5k SW RR or 30k Marriott for 10k SW RR. I don’t necessarily recommend this, but it’s not a terrible option and depending on your usage for Marriott points it could make sense.

Shop Online via the Southwest Rapid Rewards Shopping Portal

Shopping portals are a great way to earn extra points, and the Southwest Rapid Rewards Portal is no exception. When I was working on obtaining my Companion Pass I conveniently needed to re-order my contact lenses. I spent $655 at 1-800 Contacts with a 4x earnings via the Portal so I got that plus my 1x on the card for general spending, effectively earning me 3,275 Rapid Rewards points from that one transaction for something I needed to buy anyways.

Personally, if you have the spending to do so, I’d opt to use the shopping portal as much as possible while just earning the additional points via spend.

The Southwest Companion Pass is valid for the remainder of the year earned plus the following year. I’ve managed to earn it two years in a row!

Housekeeping

I said that using the pass was simple and it truly is. Here’s a couple of housekeeping items that you should be aware of:

You can change your designated companion three times. So the 4th person to be your Companion is your final companion.
You can cancel any Southwest flight up to 10 minutes before the flight and get your points back. This is awesome.
When you book your companion on a flight you’ll still need to pay the 9/11 security fee which is usually around $10. Somehow I think you’ll manage.

As you can see the Southwest Companion Pass is pretty amazing and it allowed my wife and to take trips we probably would not have taken otherwise. What are you waiting for? With many great domestic stops plus increasing internationally options it’s time to grab two credit cards, get an additional 6k points, and go enjoy your free travel. My wife will definitely be earning the Companion Pass next year to keep our travel itinerary packed.

Photo credit to Bryce Edwards.

Guide to Airline Alliances

June 10, 2015 By Will Leave a Comment

Since you’re at SavvyMiles you’ve no doubt heard of Delta, United, and American Airlines but you may not be familiar with the airline alliance that each is a member of. An airline alliance is an agreement amongst a group of airlines to essentially work together to provide a more extensive network for passengers to travel on. For example, you might want to go to Nice, France on an award ticket (or a paid ticket). You find the flight you want to take and you book it through American Airlines, but American Airlines itself doesn’t actually service the Nice airport – you’d probably fly on American Airlines to London and then on its alliance member British Airways from London to Nice. See how it makes things much easier than requiring you to buy tickets from both American Airlines and British Airways?

Japan Airlines 777 SkySuite with AAdvantage Miles

I’ll be flying home from Japan in the Japan Airlines 777 first class SkySuite using my American Airlines AAdvantage miles thanks to it being a member of the oneworld Alliance

It’s honestly not as important to have an understanding of the alliances if you’re buying airline tickets, but having an understanding of airline alliances will really help you take your award ticket planning to the next level. The reason for this is that you can use your frequent flyer miles for the airline you have the miles with or its other alliance members. This becomes even more important when redeeming for premium cabins (business class or first class) because the best experience to a particular destination might very well be on a partner airline.

oneworld Alliance

Although it’s the smallest of the three major alliances in terms of number of airlines, it’s one of the mightiest with a wide network to destinations that most travelers want to go and offers some of the best premium class award redemptions. My favorites in the oneworld Alliance are American Airlines, Cathay Pacific, JAL, and Qantas. I find oneworld to be great for award redemptions to Asia on Cathay Pacific or JAL. It’s a decent option for flights to Europe but fuel surcharges on British Airways keep it from being the best option. Lack of award availability to Australia due to a limited number of seats released by Qantas is a weakness.

oneworld Alliance members include:

airberlin	American Airlines	British Airways	Cathay Pacific
Finnair	Iberia	Japan Airlines (JAL)	LAN
TAM Airlines	Malaysia Airlines	Qantas	Qatar Airways
Royal Jordinian	S7 Airlines	SriLankan Airlines

American Airlines only shows a limited number of partners on its website so I recommend searching for partner awards on ba.com. Another great alternative is to simply pick up the phone and call the AAdvantage customer support and they can help you search for awards.

Star Alliance

The Star Alliance is anchored in the U.S. by United Airlines and is the oldest and largest airline alliance. With such a large network the Star Alliance can get you just about anywhere you need or want to go. I consider the Star Alliance to have the strongest award redemptions to Europe with members Lufthansa, Turkish Airlines, SAS, and Swiss. Thai Airlines and ANA keep its offerings strong in Asia. With the sheer number of members and total flights I find that awards within the Star Alliance to be plentiful especially if you’re planning on flying in economy class.

Star Alliance members include:

Adria	Aegean	Air Canada	Air China
Air India	Air New Zealand	ANA	Asiana Airlines
Austrian Airlines	Avianca	Brussels Airlines	Copa Airlines
Croatia Airlines	Egyptair	Ethiopian Airlines	EVA Air
LOT Polish Airlines	Lufthansa	Scandinavian Airlines (SAS)	Shenzhen Airlines
Singapore Airlines	South African Airlines	Swiss	TAP Portugal
Thai Airlines	Turkish Airlines	United Airlines

In most cases United.com is great at showing star alliance partner award availability so I recommend starting your search there to see what’s possible for your destination.

SkyTeam

I don’t think there’s anyone who would try to convince you that SkyTeam is the best airline alliance. Its U.S. member is Delta and it only has a few partners (Korean Air, Air France, and KLM) that I find desirable for award redemptions. While there are a few intriguing redemption options in the alliance, it’s clear that SkyTeam got the last pick at the draft.

Skyteam members include:

Aeroflot	Aerolineas Argentinas	AweroMexio	Air Europa
Air France	Alitalia	China Airlines	China Eastern
Czech Airlines	Delta Air Lines	Garuda Indonesia	Kenya Airways
KLM	Korean Air	Middle East Airlines	Saudia
TAROM	Vietnam Airlines	Xiamen Airlines

Delta is horrible at telling you how many miles you need to save up for an award since they removed their award charts in early 2015, but they’re terrific at showing you partner award availability. Search Delta.com for all of your SkyTeam partner redemptions.

Other Partners

While the alliances encompass most of the airlines, there are some important airlines that aren’t members of an alliance but do have partnerships with other airlines. For example, American Airlines has partnerships with airlines such as Alaska, Etihad, and Hawaiian Airlines. United partners with Aer Lingus and Delta partners with Virgin Australia.

This may seem like a lot to remember, but I mostly just wanted to make sure you understand how the alliances work in general. While you can use miles to fly on partners, you can’t combine miles between alliance members. For example, you can’t combine American Airlines AAdvantage with JAL Mileage Bank to redeem for one award. You’ll also have to follow the redemption values and rules for the ariline you’re redeeming with. Over time we’ll go into the programs in-depth, particularly United MileagePlus, American AAdvantage, Delta SkyMiles, and Alaska Mileage Plan, and you’ll see that particular airlines within the alliances can have more favorable redemptions than others.

How Credit Card Applications Affect Your Credit Score

June 2, 2015 By Will Leave a Comment

If you haven’t already, you’ll quickly find out that signing up for credit cards is one of the easiest ways to earn frequent flyer miles and hotel points. For example, let’s say that you have an American Airlines card in your wallet that you signed up for three years ago. In order to earn 50,000 miles through the card (currently enough for a Business Class one-way ticket to Europe) you’d need to spend $50,000. I don’t know about you, but I’m not rich, and I don’t spend that much money on my credit card in a year. Another way to earn the same amount of points would be to sign-up for an American Airlines card from Citibank for which you need to spend $3,000 in 3 months and then you’ll receive 50,000 miles. If your typical credit card spending is $1,000 per month you can see how you might be able to get four credit cards per year with $3k/3mo requirements and earn ~200,000 airline miles. This level of spending would only generate 12,000 points at 1x earnings or 24,000 at 2x earnings in bonus categories.

Hopefully the above makes it a bit clearer as to why applying for credit cards is probably the easiest and most lucrative way to earn frequent flyer miles. However, if you’re like most people, you’re probably wondering how this will affect your credit score. I’ll do my best to cover some of the most common questions when it comes to credit card applications and obtaining frequent flyer miles such as:

How is my credit score calculated?
How do I check and monitor my credit score?
What credit score should I have to apply for these credit cards?
How do credit card applications affect my credit score?
Should I cancel my old credit card before opening a new one?
What should I do when the annual fee comes due?

How your credit score is calculated

Understanding how your credit score is calculated will help you to understand how to maximize your credit score as well as allay some of your fears regarding applying for new credit cards. While the actual scoring algorithm is kept a secret, FICO does release information regarding the composition of its scores. MyFico has a great image to show the score breakdown:

FICO Score Breakdown – Courtesy of MyFico.com

As you can see, FICO places a heavy emphasis on your payment history (making payments on time) and the amounts owed (credit utilization). If you pay your debts on time and keep your debt to a minimum (mortgage and student loans don’t penalize you in the same way that credit card debt does) then you’re already well on your way to a great score.

The next most important is length of credit history, which is largely out of your control at this point. Either you have years and years of credit history at this point or you don’t. One of the major ways they calculate this is Average Age of Accounts which factors in the age of all of your accounts. I’ll get to this a bit later, but this is why it’s good to keep open old credit cards that don’t have annual fees.

Monitoring your credit score

Monitoring your credit score is vital to obtaining large sums of frequent flyer miles. Without credit card monitoring you might be missing errors in your credit report that are negatively affecting your credit and you might also be applying for credit that you won’t be approved for. Don’t bother paying for a premium credit monitoring service – the free methods for monitoring your credit will do just fine. CreditKarma will monitor changes to your TransUnion credit report and will provide you with a FAKO score, which is basically an approximation of your TransUnion FICO score. CreditSesame will do the same, but for your Experian report. Both services are completely free so it makes sense to sign up for both.

You can also retrieve your credit report directly from each of the three bureaus for free once per year as mandated by law from AnnualCreditReport.com. Unfortunately they’re only required to provide your credit report – you’ll have to pay extra for your score!

With each credit card application you’ll receive your true FICO score in the mail that the bank used when making a decision about your application. This is a great way to get your score so look for this in the mail. Also, a number of banks have started to offer your FICO score as a benefit of having their card. Below is a quick list of some of the cards that offer this benefit:

Barclay: All Barclay cards offer free TransUnion score monthly
Chase: Slate card offers FICO score monthly
Citibank: Many cards provide Equifax FICO score at least every 60 days
Discover: IT and More cards offer TransUnion FICO

Here’s an example of the FICO score Discover provides – a great benefit!

What credit score do you need to get approved for a card?

I hate it when an answer is “it depends”, but in this case that’s the best answer. Different issuers have different requirements, and requirements can vary by card. One of my favorite sources for approval information is CreditBoards.com. The way the search works is that you should input the creditor you’re interested in and select your state. Looking at Chase approvals you’ll probably see that 680+ is the trend for approved cards with them. American Express tends to trend a bit higher than that but not too much. 650-700 overall is a bit iffy for approval and can be hit or miss. 700+ should net you approval assuming you don’t have too many recent inquiries. 740+ is ideal and with a score higher than that you shouldn’t run into many issues. There’s no concrete number that will work for everyone, but those are some general guidelines.

If you want more data on the score needed for particular cards but don’t want to browse through CreditBoards I highly recommend this post from Drew over at TravelIsFree. His posts are always top-notch and he spent the time scouring the CreditBoards so that you don’t have to.

Beyond your score, your existing relationship with the bank will impact their decision. You’re more likely to get approved for a card with a bank that you already have a bank account with. It may also surprise you to know that this is also the case with credit cards – a bank with which you already have a credit card is more likely to extend you another credit card in most cases, assuming you don’t have too much credit with them. But we’ll leave approval strategies and specific bank details for another post.

How do credit card applications affect your credit score

Each time you apply for a credit card the bank will obtain a copy of your credit report and this inquiry will show on your report for other creditors to see. Most credit cards companies will only pull from one bureau, whether it be Equifax, Experian, or TransUnion. CapitalOne will pull from all three bureaus, which should make you think long and hard about applying for a card from them. The reason why this matters is that each inquiry will temporarily “ding” your credit. However, most people overestimate the impact of this. In general, an inquiry is going to temporarily decrease your score by 3-5 points. So if you apply for three credit cards and each bank pulls from a different bureau, your score with each will only decrease a few points. If they all pull from the same bureau then your score with one bureau will take a bigger hit and the others will largely be unaffected. While it may seem bad to decrease your score, this ding is temporary. After a few months its impact is significantly lessened and after a year the inquiry makes no difference. The count of recent inquiries is considered to be a minor factor in your score and I wouldn’t worry too much about the short term effects as long as you’re not going crazy with your applications. Plus, each new credit card ultimately helps your score by increasing the number of accounts and decreasing your credit utilization at any given time by increasing your total credit limits.

Don’t cancel that card!

I’ve had friends ask me if they should cancel their old credit cards before getting a new one… don’t do it! Average age of credit is an important factor when it comes to your credit score so keeping those old credit cards is helping your credit, not hurting it. The only reason to cancel a credit card is because it has an annual fee and the benefits of keeping the card do not outweigh the annual fee.

Bottom line

I’m a personal finance nerd so I could go on and on about credit scores and all of the various myths surrounding your credit score. The bottom line is that your credit score is not an indicator of financial success or wealth, but a metric lenders use to assess how well you have used debt in the past and how likely you are to use it well in the future. Obtaining a loan or credit card and paying it back is what banks want to see. Credit card applications will only negatively impact your score in the short run and it’s pretty minimal. In the long run, your new credit card will help to increase your score. Regardless of the rewards you can earn from credit cards, you’re losing if you carry a balance on your card and are paying interest so make sure that any spending requirements fit within the parameters of your personal financial situation. Please post below in the comments if you have any questions and I’d be glad to help in any way I can!