This post was written by Nancy, who is a regular contributor. She also runs a blog Savingforadream
Doctor of Credit blog warned us this day was coming. Many people said that Chase would never place such harsh restrictions on its co-branded credit cards. I was swayed by the naysayers, and I did not apply for a Southwest Airlines credit card before the sky started falling. Doctor of Credit, I will never doubt you again!
If you have absolutely no idea what I’m talking about, here’s the lowdown: Last year, Chase bank started making it more difficult for people to be approved for some credit cards. If you had opened more than 4 new credit cards within the past 24 months, you would not be approved for certain Chase credit cards that were earning Ultimate Rewards (known as Chase 5/24 rule). This was probably done to cut down on churners/miles & points hobbyists who were earning tons of rewards from new sign-up bonuses without keeping the cards long-term.
Doctor of Credit predicted that Chase would expand those harsher requirements to its co-branded cards (i.e. partner cards with airlines and hotels) in April, and when that month came and went, many people breathed a sigh of relief. However, Chase implemented the tighter restrictions at the end of May instead, and now many cards are impossible to acquire under these new rules.
Image courtesy of jesadaphorn at freedigitalphotos.net
^^That is me weeping!
While my husband and I are not hard-core churners, we each apply for 3-4 new cards per year that are recommended by bloggers when there are increased sign-up bonuses. We also frequently add each other as authorized users on our spouse’s cards to help us complete the minimum spending faster, so over the past 24 months we have opened over 8 new credit cards, well over Chase’s new standard for approval.
Southwest points have been my family’s bread and butter for award tickets, and the bottom line is that my family’s run with Rapid Rewards currency is coming to a screeching halt. Over the past few years, between my husband and I, we’ve had 4 personal Southwest credit cards, 2 business cards and 3 Companion passes.
Although we have paid over $500 in total annual fees for those 6 cards and Chase has received a few percentage points from our purchases, the bank has probably not made much money from us. We never carry a balance, so Chase doesn’t make anything from interest or late fees. We have been on the winning side of this relationship, with our points providing us many almost-free trips as a family of five.
Our Southwest Rapid Rewards points have taken us numerous times to Orlando, Denver and New York. We live near Dallas, a Southwest hub, so we have gotten some very lucrative redemptions with our stash. Last year, when we had two Companion passes, we flew our family of five to Denver for only 18,345 points and to Orlando for just 33,969 points.
Those same flights on American or United would have cost us 125,000 miles for each destination! I see many miles and points hobbyists pooh-poohing Southwest Airlines online because they only fly business or first class. But for my family’s situation, Southwest points were a total boon!
One of our adventures in Florida
So what’s the plan now?
The silver lining to this situation is that I have Chase Ink Plus business card, which earns Ultimate Rewards currency that can be converted to Rapid Rewards. This alone will not provide us with the amount of Southwest points we had accumulated in prior years, but at least it’s something.
I had just booked flights to Denver for Thanksgiving on Southwest before finding out about the new 5/24 changes, but canceled those and booked similar flights on American using British Airways Avios that I got from my Amex Platinum card earlier this year. Flights to Denver from Dallas cost 7,500 Avios instead of 12,500 AA miles. I plan on saving those refunded Southwest points to get my family to Tampa for Spring Break next year.
There are a few Chase co-branded credit cards that are not (yet) subject to the 5/24 rule, including British Airways, Hyatt and Fairmont cards. There are some rumors that these cards may eventually be part of the 5/24 rule, so I applied for a Chase British Airways Visa Signature (see “Support the Site” link at the top of the blog).
Dallas is also an American Airlines hub, and my family can fly to both Denver and Florida for 7,500 miles using British Airways Avios on American Airlines flights. It’s not as great of a redemption as most of our Southwest trips were, and we can’t use any Companion passes, but it’s still better than paying 12,500 miles for each flight. I hope that my husband will also be approved for the British Airways card so that we can start to build up even more miles.
I’m not sure what our long-term plan will be. We can either continue to apply for non-Chase cards when the bonuses are lucrative, or hold off on applying for any new cards so that we can re-qualify for the Chase Southwest card in 1-2 years. We both still have high scores and no credit card debt. However, we will probably not take as many trips in the future, and we may need to start paying cash (gasp!) for Southwest flights if they are the best option.
Southwest has some rock-bottom prices from Dallas when the planes are not full, and we’ve seen $36 one-way fares to both Denver and Orlando. We may need to be more flexible in our travel times to visit family in order to jump on the lowest prices.
Southwest, it’s been a great ride! We will miss your points for sure.
Is anyone else adversely affected by Chase’s 5/24 rule and inability to get Southwest credit card? What are your plans to keep traveling with miles and points?
Leana is the founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.