Can Southwest Rapid Rewards visa outrun Starwood American Express ?

I usually recommend that a regular family  focuses on cash back for everyday spending. Yet as I mentioned in this post, there are instances when it can make sense to collect SPG points instead. But what about Chase Southwest Rapid Rewards card? I said that its usually not worth keeping past the bonus.

How does it compare to Amex SPG, in case you have to pick which one of those 2 cards to renew and pay an annual fee? Assuming you can’t churn for whatever reason. I am a big fan of Southwest.  IMO their points are quite valuable for regular family, even more so than United miles .

Lets assume in this instance, that British Airways Avios short haul redemptions (4500 miles each way) or lowest tier hotels (category 1 and 2) don’t really fit in with your  family’s plans. Thats indeed the case with us. Otherwise, Amex SPG would be the winner, no doubt, as the referenced post had shown. I assume you have a good coverage through Southwest and American Airlines in your area and have no preference. Lets consider 11 points:

1) How widely is the card accepted? Chase Southwest visa wins hands down. Amex is still not accepted in few places.

2) How do the annual fees compare? Amex SPG card has an annual fee of 65 dollars and does not give any perks on renewal. One of Chase Southwest cards gives 6000 points after paying 99 dollar renewal fee. Currently the perk makes up for the annual fee, though that will change somewhat after devaluation. Still,  Chase Southwest Visa wins.

3) Which card offers better purchase protection and benefits?  Amex SPG wins. Occasionally you may have an option to get an extra transfer bonus to different airlines, on top of the one you get on every 20000 points. They also have special promotions constantly, like 25 dollar credit on 75 dollar Amazon purchase, running right now. Read here   Those can potentially make up for the annual fee.

 4) How easy is it to redeem?   SPG partners with many airlines but none, as far as I am aware, guarantee award availability. Also, the biggest problem with SPG program is that transfers are not instant. But you can redeem for hotels if needed. On Southwest you are guaranteed to be able to use your points for flights. So, this one is probably a tie.

5) How much value does 1 point get? On Southwest close to 1.9 cents currently for “Wanna get away” fare. Though it will be 1.43 cents per point after March and probably closer to 1.6 cents if you factor in tax. SPG varies a great deal, depending on the partner. My top choices would be British Airways Avios and AAdvantage.

As I mentioned, we disregard Avios lowest redemption that runs 4500 miles each way, which would almost certainly beat Southwest, especially on international flights. Avios second tier redemption runs at 7500 miles one way and AAdvantage runs at 12500 between USA (including Alaska) and Canada.

Because of the 5000 miles bonus with every 20000 miles transfer, its fair to say you should be able to get more  than 1.6 cents per SPG point in economy through those partners.  My average domestic redemption averages  1.5 cents per mile. So, factoring in the transfer bonus, you should  get around 1.875 or more per each SPG point.

Amex SPG wins, taking into account March devaluation.

6) How many transfer possibilities? Rapid rewards points transfer well   from several Chase premium cards and can be earned from their own co-branded cards. SPG has a very poor transfer ratio from Membership rewards. So the only reasonable way to get SPG points is to stay in their hotels (which we rarely do as a family) or earn  them through their credit card. SPG point is harder to acquire=more valuable. Amex SPG wins.

7) Can the points transfer to cash ? No. But both Rapid Rewards points and SPG can convert to Amazon gift card, with SPG having a better ratio. Amex SPG wins.

8) How do the fees compare when you make airline redemptions? Southwest wins hands down. It presently does not charge for checked bags and you can cancel your tickets close to departure and get your points back.

9) How flexible are the points?  You can always use SPG points for their 3rd tier hotel redemption (7000 points per night) for a couple’s getaway  even if it makes no sense for a family vacation. Southwest is only good on their flights as well as Aitran, which will be soon integrated into the program. Amex SPG wins.

10) How does the earning structure compare? Southwest card gives 2 points per dollar on hotel and car rental purchases, plus it has no foreign transaction fee. Amex only gives 2 points on Starwood hotels and charges a Forex fee. Southwest  visa wins. 

 

Amex SPG card is the overall winner, beating Chase Southwest visa 5 to 4.  However,  if Southwest has a better coverage in your area, their card might be the winner for your family.

The conclusion: in spite of some drawbacks, I would still pick SPG Amex over Chase Southwest Rapid Rewards visa if given the choice between the two. Especially if you have a no-annual fee Visa or Mastercard to serve as a backup for those places that don’t accept Amex.  It doesn’t mean Amex SPG is the best card for most middle class families when it comes to non-bonus spending. Look HERE to see my list.

And I would pick Chase Southwest card over a card that earns 1 percent cash back.  Though as I have said many times before, a middle class family should focus on sign-up bonuses, unless there is a mortgage or any major loan coming up in a near future. So, I guess, by that logic neither one is the winner!

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Photo credit goes to bbb.co.uk