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:   Southwest Rapid Rewards® Premier Credit Card

Link:   Southwest Rapid Rewards® Premier Business Credit Card

Link:   Southwest Rapid Rewards® Plus Credit Card

Link:   Southwest Rapid Rewards® Plus Business Credit Card

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 CardSouthwest Priority Card
Spending• 2X Southwest points with Southwest and Rapid Rewards hotel and car rental partner purchases
• 1X Southwest points on all other purchases
• 2X Southwest points with Southwest and Rapid Rewards hotel and car rental partner purchases
• 1X Southwest points on all other purchases
• 2X Southwest points with Southwest and Rapid Rewards hotel and car rental partner purchases
• 1X Southwest points on all other purchases
• 2X points per $1 spent on Southwest purchases and Rapid Rewards car and hotel purchases
• 1X points per $1 on all other purchases
Anniversary Points6,0006,0003,0007,500
Foreign Transaction FeesNoneNone3%None
Annual Fee$99$99$69$149

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.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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