How Much Are Southwest Points Really Worth?

How Much Are Southwest Points Really Worth?

Million Mile SecretsHow Much Are Southwest Points Really Worth?Million Mile Secrets Team

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I’ve written lots about Southwest’s frequent flyer program and how it’s the best program for domestic travel.  Emily and I love their schedule and destinations, and being able to check up to 2 bags each for free!  There are no blackout dates and it is really easy to book award seats.

Southwest Points Are Very Flexible…But How Much Are They Worth?

The number of points needed to book a Southwest flight depends directly on the advertised fare.  Right now, Wanna Get Away (their cheapest fare) award flight bookings cost 60 points per dollar.  This means 1 Southwest point is worth ~1.67 cents ($1 towards Southwest flights / 60 Southwest points) towards Southwest’s cheap Wanna Get Away flights.

Wanna Get Away? Southwest Flights Cost 60 Points Per Dollar

But in practice, you can actually get a value of ~1.8 to over 2 cents per point!

Let’s look at some examples.

1.   Austin to Chicago (Midway) 1-Way

It costs $173 in March from Austin to Chicago on Southwest including taxes and fees.

A 1-Way Ticket From Austin to Chicago Costs $173

If you want to book this flight using points, it will cost 9,042 Southwest points plus a $2.50 security fee.

The Same $173 Ticket Costs 9,042 Points Plus $2.50

This means that, for 9,042 points, you’re getting a flight valued at $173 – $2.50 = $170.50.

So you’re actually getting a value of ($170.50 towards Southwest flights / 9,042 Southwest points) = ~1.89 cents per Southwest point!

2.   Austin to Dallas (Love Field) 1-Way

It costs $69 in March from Austin to Dallas on Southwest including taxes and fees.

A 1-Way Ticket From Austin to Dallas Costs $69

If you want to book this flight using Southwest points, it will cost 3,237 points plus a $2.50 security fee.

The Same $69 Ticket Costs 3,237 Points Plus $2.50

So for 3,237 points, you’re getting a flight valued at $69 – $2.50 = ~$67

In this case, you’re actually getting a value of (~$67 towards Southwest flights / 3,237 Southwest points) = ~2.05 cents per point!

Why Is This Different From Southwest’s Advertised Value of 1.67 Cents per Point?

Southwest calculates the number of points needed for a flight by multiplying the BASE FARE by 60.

To see the base fare, click on “fare breakdown” under the fare subtotal.  A new window will pop up showing the base fare plus additional taxes and fees.

Clicking Fare Breakdown Shows You The Base Fare Plus Taxes and Fees

In our Austin to Chicago example, the base fare is ~$151.  When you add excise taxes, segment fees, passenger facility charges and the security fee, the total fare becomes $173.

But Southwest calculates the points needed by multiplying the base fare (not the total fare) by 60.

That means that on a points booking, you are NOT being charged for all of the additional taxes and fees (except for the security fee of $2.50).

The points needed for this booking are ~$151 x 60 = 9,042 Southwest points.  But you’re getting a value of $173 – $2.50 = ~$171 for the fare.

And (~$171 towards Southwest flights / 9,042 Southwest points) = ~1.89 cents per point!

I really like getting more value for points than I previously thought!

Remember that if you have the Southwest Airlines Companion Pass, you get even more Big Travel with Small Money!  With the Companion Pass, your companion will fly for free with you, even on award bookings.

Southwest 50,000 Point Card
Emily With Our Southwest Companion Pass!

Emily and I love our Companion Pass and use it frequently to visit our friends and family in the US.  Right now, all 4 versions of the Southwest credit cards are offering 50,000 point bonuses, making it relatively easy to qualify for the Companion Pass.

Don’t forget that Southwest is devaluing their points!  Any award bookings made after March 31, 2014 will cost 70 points per dollar instead of 60.

Southwest Points Bookings Will Cost ~15% More After March 31, 2014

This works out to ($1 towards Southwest flights / 70 Southwest points) = ~1.43 cents per Southwest point.  But you will still be able to get a greater value out of your points because Southwest will still use only the base fare to calculate the number of points needed.

Now is a good time to book Southwest flights before it costs more points for the same flights after March 31, 2014!

Bottom Line

Southwest values their points at ~1.67 cents per point.  But in reality, Southwest points can be worth up to ~2 cents per point!

However, Southwest points will be worth 15% less after March 31, 2014.  But you can still get a better value from them than what Southwest advertises.

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Just wanted to be clear. Once I earn the 50,000 bonus points I then have to spend another $60,000 on my credit card in one year to get the Companion Pass? Sounds like a lot to put on the card. Or am I missing something?

Thanks for the breakdown on the points to dollar ratio. You made it very clear!

Southwest Credit Card and Rewards Program is the best out there! The Customer Service line is awesome.

One more reason to use your SW card for the big get double points...

I didn't read all comments, so maybe someone made this point already. The point made by this alrticle, but not explicitly said, is that the added value comes from any difference in taxes/fees. I compared a couple domestic flights and all the fees are the same except the excise tax, which wasn't all that different. Looking at a flight to Cancun (same dates and wanna get away) there were many more fees, as you might expect. The points amount didn't seem to come out correct and was a few hundred low, but there was also an extra $30 in special SW fees, which probably more than evens it out. The main point that I'm working around to is that reward flights offer no points, so the main driving motivator should be using $ for more expensive flights and points for less expensive flights. Points awarded are 6 per dollar spent so a $1000 flight will get you 6k points, where a $400 flight will get you 2.4k points. You save more money using up your points, but lose a lot of miles. When you consider that you only get 1 point per $ spent with the card, it makes more sense to get 6 per and use up your points as often as possible on cheap flights and pay for expensive flights.

Do you know if points transferred from Choice Hotels will count towards the Companion Pass? It looks like about a 3:1 ratio Choice:RRewards points.

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