Southwest Devalues Rapid Rewards Points

I’ll be very quick and to the point here.

Your Southwest Rapid Rewards points are worth about 6% less than yesterday.

Your average redemption yield will now be more like 1.2 – 1.4 cents per point vs. 1.3 – 1.5 cpp yesterday.  It will still vary slightly by route / date.

This was done overnight and with no notice. 

Generally, I’ve long advised that if you are redeeming Chase points and have a Sapphire Reserve card, you are better off using the portal for 1.5 cpp and also earning Rapid Rewards. But if you had a Sapphire Preferred card or an Ink Business Preferred, where you receive 1.25 cents per point in the travel portal vs 1.5cpp on the Reserve, transfers to Rapid Rewards still worked out better. Now, you may find that even on those cards, a portal beats using Rapid Rewards.

Now, I think it truly stinks for a program already tied to the price of a ticket with zero potential hugely outsized value redemptions to devalue. Since it’s already tied to the ticket price, they do not ever need to adjust. I have to assume they did this simply because this will result in a net ~6% gain on their booked liabilities for points. I.e. This looks good to the bean counters, but bad to us.

And just in case you needed another reason to not ever buy points, here you go…

Chase Sapphire Preferred® Card ENDS by NOV 14, 2024: Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. Plus, get up to $300 in Chase Travel statement credits in the first year of account opening for any purchases made on Chase Travel. How to apply for this offer.

Thoughts?

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