Do Annual Fees Count Towards the Minimum Spending Requirement?

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Million Mile Secrets reader Patrick commented:

Does the annual membership fee count toward your $2,000 minimum spend on the Southwest card? And does it accrue points the same way that a regular spend does ($1 = 1 point)?

Assuming the answer is yes, is it standard for all cards (like the $450 annual fee on the American Express Platinum card) for the annual fee to count toward the minimum spending to get the sign-up bonus?

Do Annual Fees Count Towards The Minimum Spending Requirement

The Annual Fee Doesn’t Count Towards the Minimum Spending Requirement on the Southwest Credit Cards So It Won’t Get Patrick Closer to Earning the Companion Pass to Fly to Places Like Nassau, Bahamas

The short answer is that paying the annual fee does NOT count towards Patrick’s minimum spending requirement.  Nor does it earn Southwest points.

Southwest Credit Card

Link:   Chase Southwest Premier (Personal)

Link:   Chase Southwest Premier (Business)

Link:   Chase Southwest Plus (Personal)

Link:   Chase Southwest Plus (Business)

Link:   How to Fill Out a Chase Business Credit Card Application

This is important because all 4 Southwest cards are offering 50,000 Southwest points after spending $2,000 in the first 3 months.  And the sign-up bonus counts towards earning the Companion Pass.

So Patrick can earn the Companion Pass by applying for 2 Southwest cards, meeting the minimum spending, and earning an additional 6,000 Southwest points.

Patrick can use the table below to compare the Premier and Plus versions of the Southwest card:

 Southwest Premier CardSouthwest Premier Business CardSouthwest Plus Card
Sign-Up Bonus Points50,00050,00050,000
Spending• 2X Southwest points with Southwest
• 1X Southwest points on all other purchases
• 2X Southwest points with Southwest
• 1X Southwest points on all other purchases
• 2X Southwest points with Southwest
• 1X Southwest points on all other purchases
Anniversary Points6,0006,0003,000
Foreign Transaction FeesNoneNone3%
Annual Fee$99$99$69

Each of the Southwest cards are considered a different card product, so Patrick can get a personal and business card at the same time.

And if he has gotten a Chase Southwest card in the past, Patrick can get the sign-up bonus again if it’s been over 24 months since he received the sign-up bonus.

However, paying the annual fee doesn’t count towards Patrick’s minimum spending nor will it earn Southwest points.  That’s because the minimum spending is based on purchases only.

To qualify for your bonus points, you must make Purchases totaling $2,000 or more during the first 3 months from account opening

Annual fees and balance transfers do not count towards meeting the minimum spending requirement.

Do Annual Fees Count Towards The Minimum Spending Requirement

Patrick Won’t Earn Southwest Points for Paying His Annual Fee

So Patrick should spend a little more than the $2,000 minimum spending.  I’d recommend that he spend at least $2,200 on the card.  That way Patrick meets his minimum spending and has a little cushion in case he has to return a purchase.

Otherwise Patrick could lose the 50,000 Southwest point sign-up bonus and the Companion Pass.

But there are many ways Patrick can meet his minimum spending and earn extra Southwest points.

Bottom Line

The annual fee does NOT count towards Patrick’s minimum spending requirements on the Southwest card.  And Patrick will NOT earn Southwest points for the amount of his annual fee.

That’s because only purchases (NOT the annual fee) count towards earning the 50,000 Southwest point sign-up bonus on all 4 Southwest cards.

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6 responses to “Do Annual Fees Count Towards the Minimum Spending Requirement?

  1. I have two Chase Southwest Credit cards. I also have a Southwest companion pass that will expire at the end of 2014. In 2015 when I pay my annual fees I will receive a bonus of 6000 for my Chase Southwest Premier Card and another 3000 points for my Chase Southwest Plus card. Will these points count towards a new companion pass?

    Also if I call and ask for the annual fee to be waived and instead they offer more points if I pay the AF will these additional points count towards a new companion pass?

  2. If I received the bonus earlier this year from signing up the two premier cards, can I receive the bonus again if I sign up right now for the two plus cards?

  3. CHASE will not offer to waive the fee. You will be told that the anniversary bonus is your retention bonus. If anyone has a different experience please share.

  4. What about chase’s united credit cards? Fee doesn’t count toward 25k spending requirement?

  5. Not relevant to the southwest, but i have a question regarding the Citi AA..

    Recently met the spending requirement on Citi aa executive, got the bonus, and cancelled the card. However , i got a $460 credit unexpectedly from my cell phone company, which makes me under $5000 threshold….not possible to make up the spending as the account was closed. Is it possible that Citi would claw back my sign up bonus?