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- Southwest devalued its points overnight without notifying its loyalty program members in advance.
- Your Rapid Rewards points are now worth about 0.1 cents less apiece than they were previously.
- This isn’t a massive devaluation, but it’s disappointing news for Southwest frequent flyers.
- Read Insider’s guide to the best travel rewards credit cards.
If you’ve been around points and miles for a while, you’ve probably seen your share of devaluations — that is, when loyalty programs make adjustments that result in your points being worth less. Usually, this comes in the form of updating award chart prices or shifting awards into different categories.
For programs that don’t have an award chart, the number of points required for an award is often tied directly to the cost of a paid flight or hotel stay. Southwest’s Rapid Rewards program is one of these — the higher the paid ticket price, the more points you’ll pay for an award flight — and until recently you could count on each Southwest point being worth around 1.5 cents.
That’s no longer the case. Without advance notice to Rapid Rewards loyalty program members, Southwest has devalued its points with immediate effect, and you’ll now pay about 6% more points than before for award tickets. On average, you can now expect to get around 1.4 cents per point in value when you redeem points for Southwest flights.
Southwest points devaluation
As reported by Zach Honig at The Points Guy, this change kicked in overnight, and any new award bookings are pricing out at the increased rate. If you’ve already got an award flight booked, you don’t need to worry — unless you need to make a change to your booking (then you’ll pay the new rate).
This isn’t the first time Southwest has devalued its points. Almost exactly three years ago, the carrier made a similar move, increasing award pricing by about the same amount for the cheapest “Wanna Get Away” fares. Most programs make adjustments periodically, and it almost always results in a decrease in points value. That’s why — in normal, non-pandemic circumstances — it’s not a good idea to hoard points.
What’s disappointing is the lack of advance warning to customers — especially for folks who have been stockpiling Southwest points in preparation for post-COVID travel. Southwest points don’t expire, so many rewards enthusiasts have taken advantage of recent elevated Southwest credit card offers and other promotions to boost their account balances.
This brings us to an important takeaway: Loyalty programs are always changing, and if you’ve got your points locked in with a specific airline or hotel chain, there’s not a whole lot you can do to lessen the sting of a devaluation. That’s why it’s a smart move to collect flexible points — which you can transfer to an airline or hotel partner when you need to — instead of committing to a single travel loyalty program.
Southwest is a Chase Ultimate Rewards transfer partner, for example, so if you have a card like Chase Sapphire Preferred® Card or Chase Sapphire Reserve®, you’ve got the ability to move points to the airline exactly when you’re ready to book an award. And if you decide you’d rather book flights or hotels with a different partner, you’ve got that option, too. For even more flexibility, earning cash instead of points with cash-back credit cards is another good strategy — especially given the uncertainties around traveling right now.
Southwest had actually implemented some of the most customer-friendly policies in the wake of the pandemic, including lowering the number of points required to earn a Companion Pass in 2021 and extending the validity of Companion Passes due to expire at the end of 2020. And for several months in 2020, the carrier also allowed members to convert travel funds from canceled flights to points.
So while this isn’t a huge devaluation, it probably feels like more of a letdown if you’re a Southwest loyalist.
Jasmin Baron is an associate editor at Personal Finance Insider, where she helps readers maximize rewards and find the best credit cards to fit their lifestyles. She has covered credit cards, points and miles, and loyalty programs for over seven years, and she’s a Certified Educator in Personal Finance (CEPF).