Which Southwest business credit card better addresses your particular business needs? With 2 great (yet similar) offers available, we took a deep dive—beyond the bonus—to compare the benefits & simulate the net value you can expect…this year, and next.
In this post, we’ll not only compare Southwest business credit card offers, but also the more long-term value impact that each card can make on your business.
So, what are you looking for in a small business credit card? Elevated earnings multiples on airfare & other business expenses? Additional authorized users at no cost? Maybe just a few old-fashioned flight perks? We’ll cover all that.
Or, do you just want to quickly compare offers in order to score the best bonus? That’s all good too!
As we did with our personal Southwest credit card value comparison, we’ll break down the numbers, show you the calculations, explain the results, and introduce some new ways to analyze credit card value—beyond the sign-up bonus. In the end, we hope you’ll walk away feeling armed with enough insight to make an informed decision.
The current offers expire February 18, 2020…so if you’re short on time, use the “jump to” links below to skip to the parts you’re most interested in.
In this post:
Boring legal stuff: this page includes independent analysis conducted solely by us (travelhelix). We are not financial advisers, nor are we providing any financial advice. We’ve simply crunched the numbers…and are here to share the results.
The card details on this page have not been reviewed or provided by the card issuer. We received no compensation to research or write this, and we have no compensatory relationship with either Chase or Southwest. However, the card application links on this page are our own personal referral links. If you use our links to apply for one of these cards — and you get approved — we may earn referral bonus points from Southwest. If this is you…then THANK YOU! And please let us know, because we won’t find out otherwise! #personalprivacylaws
Finally, we do value your feedback (good or bad!), so please leave comments or questions at the bottom of this page, or shoot us an email.
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How to compare Southwest business credit card offers in 2020
We recently delivered a serious value breakdown of the 3 Southwest personal credit cards available through Chase. All 3 cards allow new card owners to earn up to 75k bonus Rapid Rewards points—worth an estimated $1125—after spending a total of $5k within the first 6 months of card ownership.
In this post, we’ll apply the same model to help you compare Southwest business credit card offers—and there are a couple great ones available.
Who’s eligible to apply?
Before getting too deeply into the details, we should talk eligibility.
Anyone who does not currently have one of these cards—and has not previously received a sign-up bonus for one of these cards in the last 24 months—is eligible to apply. Of course, your application is subject to credit approval.
And in case you were curious: these applications require “real business things” like a tax ID #, type of business, your title, # of employees, etc.
Sweet fact: the 5/24 restriction does NOT apply to the business cards, which is good news if you believe you’re at your 5/24 limit on the personal card side.
2020 Southwest business credit card sign-up bonuses from Chase
Today, Chase offers 2 co-branded Southwest business credit cards, both with solid sign-up bonuses tied to spending different amounts within the first 3 months of card ownership:
- PREMIER BUSINESS — 60k points after $3k spend
- PERFORMANCE BUSINESS — 70k points after $5k spend
How much are the current bonuses worth?
The value of 1 Southwest Rapid Rewards point can fluctuate anywhere from 1.2 cents and 1.7 cents, depending on the redemption. When performing any sort of Southwest point-related analysis, we use an estimated value of 1.5 cents per point (per our go-to resource: The Points Guy).
At 1.5 cents each, the purchasing power equivalent (aka “value”) of the current Southwest business sign-up bonuses is more or less:
- PREMIER BUSINESS — 60k points → $900 value
- PERFORMANCE BUSINESS — 70k points → $1050 value
Regardless of which card ends up in your wallet, those bonus values translate to more than a few free flights. But what’s better than “more than a few”?
How ’bout “more than a few…TIMES TWO!“
Do bonus points count toward the Companion Pass?
The Southwest Companion Pass is an incredible 2-for-1 flight perk that saved us $2475 in 2018. It’s not easy to earn, but the great news is that the current business card sign-up bonuses count toward your earnings, putting you well on your way to the 125k points needed before the end of 2020.
The fastest way to earn a Companion Pass is to sign up for one of these business cards AND a new Southwest personal credit card. Any combination of sign-up bonuses more than exceeds the 125k point requirement.
So, how do you decide which COMBINATION of cards to apply for? We ran the numbers on all 6 combos of Southwest personal (3) + business (2) credit cards. In this case study, we offer insights into one of the airline industry’s most coveted benefits, break down the numbers over 2 years, and demonstrate how you can potentially earn $5k worth of free airfare between now and the end of 2021.
For now, let’s get back to business.
Southwest business credit card overview & features comparison
Both Southwest business credit cards include different pros (perks) and cons (fees) that may factor into your application decision.
First, we’ll dissect what they have in common:
- No foreign transaction fees — great perk in general, and even more so if your business has overseas vendors, or you travel internationally.
- Earn tier qualifying points towards A-List status — to achieve A-List or A-List Preferred status, you must either fly a lot of segments, or spend a lot on the card. Here you can find the benefits and requirements.
- Neither card offers the $75 annual travel credit — this benefit is only included with the personal Southwest PRIORITY card (compare the 3 personal Southwest cards here).
- Employee cards at no additional cost* — nice perk if you’ve got employees that work remotely, or if you want your Purchasing department to charge a particular bucket of expenses (Southwest flights!?) to the same primary account. Some corporate cards charge $100 per year for each additional authorized user, so it can add up.
*THE FINE PRINT: the current bonus offers do not mention a maximum number of authorized users. Why does this matter? You’ll find out shortly!
Now, let’s examine some key areas where they differ:
- Annual fees — each year, you’ll pay $100 more for the PERFORMANCE BUSINESS card ($199 vs. $99).
- Anniversary bonus points — starting in year 2, both cards hook you up with anniversary points. The extra 3k points (9k vs. 6k) you’ll score with the PERFORMANCE BUSINESS card are worth about $45, partially offsetting the incremental $100 spent on the annual fee.
- Points multiples on purchase categories — do you plan on using your card to make a lot of Southwest purchases? What about some of those digital business expenses called out in row 2 of the table below?
Example:
Let’s say you need to spend $10k on Southwest purchases and $10k on search engine advertising for your business in a particular year. The simulation below demonstrates how this same spend generates totally different value, depending on the card:
- PREMIER BUSINESS — $10k Southwest → 20k points (2x) + $10k digital stuff → 10k points (1x) = 30k total points ($450 value)
- PERFORMANCE BUSINESS — $10k Southwest → 30k points (3x) + $10k digital stuff → 20k points (2x) = 50k total points ($750 value)
Clearly, these higher spend multiples have the potential to make a BIG value impact…but only if you actually plan on using the card for these purchases.
And finally, here are 3 more perks you’ll only get with the PERFORMANCE BUSINESS card:
- Global Entry or TSA Pre✓® Fee Credit — once every 4 years, receive a statement credit for either Global Entry ($100) or TSA PreCheck ($85), if you use your card to pay the application (or re-application) fee. First timers: we 100% recommend Global Entry, as it includes TSA PreCheck, and makes life SO much easier after a long international flight back to the US.
- 4 upgraded boardings per year (when available) — if you enjoy being one of the elite A1-A15 folks that board first, then 4 times per year you can use your card to pay for this priority boarding privilege, and the charges will be credited back. If you do take advantage of this perk, you could assign an additional value of $120-$200 per year, as upgraded boarding fees vary from $30-$50, depending on itinerary.
- In-flight WiFi credits** — this is an interesting one, if you’re a frequent business traveler that considers the cozy confines of a 737 your second office. Southwest charges $8 to connect to WiFi, but with the PERFORMANCE BUSINESS card, you’re entitled to $8 WiFi statement credits…up to 365 times per year. To use a normal human flying example: take 30 Southwest flights a year, and that’s $240 in your pocket.
**THE FINE PRINT: this benefit applies to “all WiFi transactions on the overall business card account.” Remember that whole “employee cards at no additional cost” perk? The one that doesn’t limit the number of authorized users? If you’ve got a team of employees flying around the country and expensing $8 WiFi charges…this perk could save your company up to $2920 per year.
With all of the different benefits and distinctions in mind, let’s compare these Southwest business credit card offers.
And remember: let’s think beyond the bonus.
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The model: 2-year net value comparison of 2 Southwest business credit cards
This model factors in the key points of differentiation between the 2 Southwest business credit cards, introduces a single assumed spending pattern, and delivers output in the form of overall net value per card, over different periods of time:
- Year 1 — net value after first 12 months of card ownership
- Year 2 — adjusted net value after anniversary bonuses & annual fees, but prior to additional spending
- Aggregate view of 1 + 2
Key inputs & assumptions
First, we introduce the following fixed variables for each card, per the T&C’s of the current bonus offers:
- Annual fees
- Sign-up bonus points
- Anniversary bonus points
- Global Entry/TSA Pre✓® fee credit
Then, we apply the following inputs & assumptions:
- Level of spend — year 1 spend is exactly the minimum in order to achieve the sign-up bonus ($3k for the PREMIER BUSINESS card and $5k for the PERFORMANCE BUSINESS card). Year 2 spend is zero.
- Purchase mix — year 1 spend is entirely on purchases that fall into the “all other purchases” category (1x points multiple).
Given that the 2 cards offer different points multiples for Southwest purchases (2x or 3x) and internet/advertising/phone purchases (1x or 2x), any adjustments to the purchase mix would benefit the PERFORMANCE BUSINESS. But with our bare minimum “level of spend” assumption, we’ve opted to keep it simple with an “all 1x” purchase mix.
Excluded from the analysis
Finally, we’ve opted to exclude the following two PERFORMANCE BUSINESS benefits:
- 4 upgraded boardings per year — if you would take advantage of this perk, then as we’ve discussed, you can assign an additional value of $120-$200 per year.
- In-flight WiFi credits — again, depending on your personal travel style or business dynamics, this could be worth anywhere from $240 to $2920…or $0.
Despite their perceived value to many card owners, these fall more into the category of personal choice for some than universal value for all. In that sense, they’re somewhat subjective, so we’ve omitted them from the model.
But if you find value in these benefits—particularly if these are things you currently pay for and would thus start saving—then by all means: factor them into your decision! Start with our numbers (below), then add your personal estimated value for these benefits.
NOW, let’s look at the results.
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Year 1 results: net value after 12 months of card ownership
Remember that in this model, we are spending exactly the minimum required to achieve the sign-up bonus. In doing so, you don’t just score the bonus points; you also earn points on the dollars you spent to get there.
In other words, in the process of making purchases…to meet the minimum…so you can earn the bonus…you really earn slightly more than the bonus in year 1:
- PREMIER BUSINESS — 60k bonus points ($900 value) + 3k points for the actual $3k spend ($45 value) = 63k total points ($945 total value)
- PERFORMANCE BUSINESS — 70k bonus points ($1050 value) + 5k points for the actual $5k spend ($75 value) = 75k total points ($1125 total value)
With that in mind, let’s compare these Southwest Business credit card offers in year 1, by netting the value of their points and other benefits against their associated fees:
Analysis:
Although both cards deliver significant value in year 1, the PERFORMANCE BUSINESS card delivers an additional $180 in net value, despite the higher annual fee. The key contributors are an additional 12k Rapid Rewards points and the $100 Global Entry Fee Credit. Defer the Global Entry credit to a future year, and the PERFORMANCE BUSINESS card still comes out $80 ahead in year 1.
This value gap could widen further if you were to take advantage of the other PERFORMANCE BUSINESS perks (in-flight WiFi credits, upgraded boardings, etc.) or with any level of higher-multiple spending (the 2x and 3x categories).
Year 2 results: net value before spending
This time, we’ll compare Southwest Business credit card offers in year 2, by assessing their adjusted value after the 2nd annual fee is charged and the anniversary points are applied…but before the card is used to make any purchases.
Analysis:
The moment annual benefits take effect—and annual fees are applied—we see a shift in net value. This sheds some light on each card’s net value before spending (“NVBS”), which helps answer the question: “if I never take this card out of my wallet after year 1, am I losing money away? Or could I possibly be earning money, just by owning it?”
Stated differently: does the value of the card’s non-purchase-related benefits more than compensate for its annual fee?
For the PREMIER BUSINESS card, the answer is no. An NVBS of -$9 isn’t terrible, but you are starting year 2 (and every year, for that matter) from a negative net value position.
For the PERFORMANCE BUSINESS card, the water’s a bit murky: 3 out of 4 years, you’ll start from an NVBS of -$64, as the model demonstrates. But if you were to defer the Global Entry credit to year 2, your final year 1 net value would decline $100 ($1026 → $926), and your year 2 NVBS would increase $100 (-$64 → +$36).
In fact, this was the intent as far as including the Global Entry credit in year 1 instead of year 2. As you’ll see shortly, your aggregate net value over time is largely positive (thanks to the year 1 sign-up bonus). But on a 1-year basis, the anticipated NVBS of of your card may very well be negative. As the years pass and the bonus points are long gone…and a new 12-month billing cycle is about to begin…it’s important to consider the reality of today and tomorrow, not the bonus points of yesterday.
In order to achieve positive net value (or at least break even), you’ll need to use the cards to make purchases…thus generating points…which offer value in the form of purchasing power.
Points required to break even on net value before spending:
- PREMIER BUSINESS — the initial NVBS of -$9 is easily offset by earning 600 Southwest points (at 1.5 cents each, 600 points = $9 in value). Spend $600 on non-Southwest purchases…or $300 on Southwest purchases…or a combination.
- PERFORMANCE BUSINESS — the initial NVBS of -$64 (3 out of 4 years) can be offset by earning 4267 Southwest points (4267 points = $64 in value). Since this card offers higher points multiples, these 4267 points can be earned by spending the category-specific amounts below…or some combination:
- $1422 on Southwest purchases (3x points)
- $2133 on social media & search engine advertising, internet, cable & phone services purchases (2x points)
- $4267 on all other purchases (1x points)
Remember that these break even spends are the bare minimums to put on the cards, if it’s important to you to not lose money through card ownership.
Combined results: total net value, year 1 + year 2 before spending
Finally, let’s combine the variables for year 1 (minimum qualifying spend only) and year 2 (before spending) to analyze the overall net value of each card.
Analysis:
Clearly, the combined picture (aggregate net value) for both cards is largely positive as we move into the 2nd year of card ownership.
- But how long will your bonus points last?
- Or have you already redeemed them all?!
- Are you taking full advantages of all the benefits your chosen card is offering you?
These are all things to think about, because as time goes on—thanks to those annual fees—your card’s aggregate value will continue to decline if it doesn’t leave your wallet to generate those precious, valuable points.
Incremental value comparison
At this particular milestone within our model, the PERFORMANCE BUSINESS card has delivered an additional $125 worth of value, compared to the PREMIER BUSINESS card. Here’s how that $125 breaks down:
Analysis:
Despite paying an additional $200 in annual fees over the course of 2 years, you still come out $125 ahead with the PERFORMANCE BUSINESS card. And this is without factoring in its other perks (WiFi credits, upgraded boardings, etc.).
In fact, it’s not until year 5 that the PREMIER BUSINESS would come out ahead on aggregate net value—and that’s only if both cards were to remain unused for all those years.
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Did our model help you effectively compare the current Southwest business credit card offers?
We hope so! We also hope you’ve discovered some new ways to analyze credit card sign-up bonuses, benefits, and the comparative net value that different cards deliver.
And if it helped you decide which card to apply for, let us know, in the comments below!
Cheers!
-DnA
▾ The Southwest Companion Pass: insights & long-term value strategy ▾
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