No, Southwest Airlines is not a valuable transfer partner


In the comments on a post last week, a reader named Andrew mentioned the fact that they found Southwest Rapid Rewards to be a “valuable and unique” transfer partner. The justification for that rationale was as follows:

If you’re a 2 player household really hitting the Southwest Companion Pass hard then that can still be a valuable and unique transfer partner for UR. Being able to book all your tickets as BOGO brings the value of transferred points to Southwest up to around 2.6 cpp.

Andrew makes a common error in this analysis that we’ve debunked before, but I thought it was worth another pass at this both for those who aren’t familiar with the error in this thinking and for those who haven’t yet been convinced. Note that I am not writing this post to pick on Andrew (and I hope he understands that!), but he makes an argument I have seen many times before and his comment offers an excellent reference point for this discussion. It is also worth adding that when I explained the core ideas that led to this post, Andrew immediately understood the rationale, so I’m not writing this post to argue with him but rather to help other readers who might have the same notion in mind.

The foundation for the (incorrect) argument for a 2.6c per point valuation

Southwest Companion Pass Promotion

I have often said that the Southwest Companion Pass is the best deal in domestic travel, and I re-analyze that each year in this post. Once you earn 135,000 Southwest Rapid Rewards points in a calendar year, a companion flies for free with you every time you fly, whether your ticket is purchased with points from your Rapid Rewards account or cash or even points redeemed from someone else’s account. You can read more about this in our Southwest Companion Pass Complete Guide.

Andrew’s number is based on the assumption that Southwest Rapid Rewards points are worth about 1.3cpp (note: cpp = cents per point) toward paid airfare (our Reasonable Redemption Value is actually 1.4c per point, but we probably need to refresh our number on that and we have previously shown that there is some variance due to taxes on international routes). For simplicity, let’s run with Andrew’s number, because the math makes the point no matter what the points are actually worth. So let’s accept Andrew’s premise that Southwest Rapid Rewards points have a base value of 1.3c per point.

In other words, let’s say that you wanted to buy a single ticket that costs $130 in cash — the price in points will be about 10,000 points.

However, if you have the Companion Pass, Andrew is asserting that your points are worth double (2.6cpp) since you get two tickets for the price of one. The foundation of Andrew’s argument therefore is that you get $260 worth of airfare (two tickets that would individually cost $130 each) for just 10,000 points, a valuation of 2.6cpp.

Unfortunately, that argument is wrong — you don’t get 2.6cpp, and if you buy into that theory, you will make poor decisions that cost you money in the long run.

The Companion Pass is effectively a discount code that works with points or cash equally

Alaska Airlines BOGO
No, this isn’t a Southwest advertisement, but the Companion Pass is effectively a coupon like this.

The heart of the argument as to why Andrew’s premise was wrong is the fact that the Companion Pass applies equally to tickets purchased with cash or points (or even someone else’s points).

Going back to the example from the previous section, let’s say that you want to buy airfare on a route that costs $130 in cash or 10,000 points:

  • If you want to buy one ticket, 10,000 points saves you $130.
  • If you want to buy two tickets and do not have the Companion Pass, you’ll need to pay either $260 or use 20,000 points. In that case, using 20,000 points saves you $260 — a valuation of 1.3cpp.
  • If you want to buy two tickets and you do have the Companion Pass, you’ll need to pay either $130 or use 10,000 points. In this case, using 10,000 points saves you $130, which is still a valuation of 1.3cpp.

The 10K points don’t save you $260 because those tickets don’t cost $260 for a Companion Pass holder, they cost $130. In other words, if you had zero points, you wouldn’t pay $260, you would pay $130 for two tickets. Using points instead of cash keeps $130 in your bank account. You are essentially trading away 10,000 points in order to avoid spending $130.

To suggest that the 10K points are worth $260 is to suggest that every $130 in your bank account is worth $260 as a Companion Pass holder. That’s not true — it won’t buy you $260 worth of anything. It just buys you two tickets on Southwest Airlines as a Buy One Get One Free type of coupon. If your grocery store runs a Buy One, Get One free coupon on a dozen eggs, the $5 in your wallet doesn’t suddenly become “worth $10”, you’re just effectively getting each dozen eggs for $2.50. You get more stuff for your money, you don’t get more money for your money.

It is worth noting that Andrew would be right if the Companion Pass only applied to award tickets. In other words, if you could only got two tickets for the price of one when using points and not when using cash, then your choices would be to spend 10,000 points or $260, a valuation of 2.6cpp. But since the Companion Pass applies equally when using cash, your actual choice is between spending 10,000 points or $130 in cash, a valuation of 1.3cpp.

If you’re not convinced, consider this (1x vs 2%)

Let’s ignore my argument and pretend for a moment that Andrew is right and points are worth 2.6cpp when you have the Companion Pass.

Let’s imagine that you have a large purchase to make through a shopping portal. To keep  the numbers simple, let’s say it is a $10,000 purchase. Let’s further say that you have the choice between earning 1 Southwest Rapid Rewards point per dollar spent or 2% cash back.

If Andrew were right, we should choose 1 Southwest Rapid Rewards point over 2% cash back since 1 point would be the equivalent of 2.6 cents. That is clearly more than the 2 cents represented by 2% back.

But the math doesn’t support Andrew’s opinion. If you made that $10,000 purchase and earned 1 Southwest Rapid Rewards point per dollar spent (1x), you would have 10,000 points and you would therefore be able to buy $130 worth of airfare at 1.3cpp. If you have the Companion Pass, you’ll get the two tickets with your 10K points and have nothing left over.

If you made that $10,000 purchase and earned 2% cash back, you’d earn $200 cash back. With your $200 in cash, you could buy the same two tickets for $130 and have $70 left over. Earning 2% cash back (2 cents per dollar spent!) gets you the same two tickets and $70, whereas earning Southwest points would have only gotten you the two tickets. The points clearly are not worth 2.6c per point — in fact, earning 2 cents per dollar spent (2% cash back) is about 50% more valuable since it leaves the extra $70 in your pocket.

And that holds up exactly with my premise above: the points are only worth about 1.3c per point whether or not you have the Companion Pass. That’s important because if you mistakenly think of them as being worth 2.6cpp, it would lead you to make poor decisions like choosing the Southwest shopping portal at 1x over earning 2% cash back or choosing to use a Southwest card to purchase airfare at 3x Southwest points over using a card like the Chase Sapphire Reserve that earns 3x points that are worth 1.5cpp for that purchase.

Transfers to Southwest get you a fixed ~1.3cpp, which is low for Chase points

One of the relatively poor decisions you might make if you imagine points to be worth more than they are is that you might consider transferring points from Chase Ultimate Rewards to Southwest Rapid Rewards with the justification that the points become “more valuable” as a Companion Pass holder. As shown above, the points do not become more valuable with a Companion Pass.

If you transfer 10,000 Chase Ultimate Rewards points to Southwest Airlines, using those 10,000 points will save you $130 whether you use them for one ticket or two (since two tickets cost the same as one for passholders). While that certainly isn’t the worst possible use of Chase Ultimate Rewards points, it is at the low end of what I’d find acceptable.

This is particularly true of you have the Chase Sapphire Reserve card. That card enables you to use points to book travel through Chase Travel at a value of 1.5c per point. Unfortunately, Southwest Airlines flights do not show up via Chase Travel. That said, it may be possible to book Southwest flights over the phone with Chase Travel — Greg showed during our 40K to Far Away challenge that Chase Travel is able to book some travel providers over the phone that aren’t offered online. I haven’t personally tried to do this, but we reported several years ago that it was possible (See: Book Southwest through Chase Ultimate Rewards again). In that case, you would get 1.5cpp toward the purchase and also earn Southwest Rapid Rewards points on the flight, paying 8,667 Ultimate Rewards points for a $130 flight rather than transferring 10,000 points to Southwest and earning points on the flight. Again, I’m not sure whether or not this is still possible, though it was a couple of years ago.

Regardless of whether or not you can book Southwest flights through Chase Travel over the phone, I would be unsatisfied transferring to Southwest in most instances because of the fact that those points will have fixed value, with no chance at getting outsized value. Whereas transfers to Hyatt or even Chase’s other airline partners like could yield far more than 1.3cpp, transfers to Southwest can not (excepting the situations with international Southwest fares where the taxes are a high percentage of the ticket price as shown in this post). If it were an option to do so, in my previous examples, I would rather spend $130 and keep 10,000 Ultimate Rewards points for a future use at higher value since there are plentiful opportunities to do that. There is an argument to be made against that philosophy if you have an endless supply of millions of Ultimate Rewards points withering away since your money can grow (via interest / investment growth) whereas your points remain stagnant (and almost always devalue over time), but given the speed at which I burn through Ultimate Rewards points at higher-than-1.3cpp-in-value, I just don’t think I would generally accept the lower value of Southwest.

To be clear, our Reasonable Redemption Values are meant to be a floor value of how much value you can expect to get when redeeming points without much effort at cherry picking the best value. Those of us who do cherry-pick the best values with Chase points (see our recent podcast episode Chase Ultimate Rewards points: Best ways to get great value) very frequently get far more than 1.5cpp in value out of Chase points. It is common for decent Hyatt redemptions to be worth well more than 2cpp and premium cabin international award tickets can be worth far more yet. We can argue about how much some of those premium experiences are actually worth, but in many cases the value is pretty objectively higher than the equivalent of 1.3cpp.

Let’s be clear about this: a transfer to Southwest Rapid Rewards beats most non-travel redemptions of Chase points. Getting 1.3cpp in airfare generally beats things like redeeming points for a statement credit or gift cards or physical products. Transferring points to Southwest isn’t the worst use of your Ultimate Rewards points, it just provides no opportunity for outsized value and rather offers lower value than what is possible through other partners.

Are there situations where it might make sense to transfer to Southwest despite suboptimal value?

Within an hour of the publication of this post, I suspect you will need to look no farther than the comments of this post to find arguments in favor of transferring points to Southwest. At the end of the day, if transferring to Southwest makes your heart happy, don’t let me steal your sunshine. And while my opinion is that this is a relatively low-value use of Ultimate Rewards points, I can recognize that there are a few instances where I might consider transferring to Southwest:

  1. If you don’t have quite enough points to make an award redemption, it could certainly make sense to top off your account. Southwest doesn’t allow you to pay partially in cash and partially in points, so if you want to book an award and have most of the points but not quite enough, a transfer could make sense.
  2. If you are very points rich, it could make sense to accept slightly suboptimal use of points in order to keep cash invested / growing as you spend down your points balance (which does not earn interest, etc).
  3. If the current cash savings is of significance to you, it could make sense to transfer. I’d caution a bit against the “I don’t pay for travel” mentality if transferring points now so you can say your flight was “free” is going to cost you more later when you don’t have the points to cover a hotel where you would have gotten better value, but I could nonetheless imagine a multitude of reasons why immediate cash savings could matter more than long-term higher-value uses of the points.
  4. If you highly value the flexibility of using points for a specific redemption, a transfer could make sense. Some will argue that the flexibility of an award over a that of a paid ticket makes points more valuable than the cash equivalent. In other words, in our theoretical example, if you paid $130 for your flight and later had to cancel, you’d get a credit that may be set to expire depending on the type of fare purchased and potentially tied to a specific passenger (though there are ways around this with Wanna Get Away Plus fares). On the flip side, if you cancel a flight booked with points, you’ll get the points back immediately and they don’t expire. If you’re just booking a backup flight or a situation where you are highly uncertain about travel, I could see the added appeal of an award flight.

Given the added flexibility of Wanna Get Away Plus fares, I would be less swayed by the flexibility of points these days, but I certainly recognize that there are situations where one of the above applies. And while the title suggests that I think you should never transfer points to Southwest, the truth is that I know this game is one with few absolutes.

Earned Southwest Rapid Rewards points (not transferred points) are more valuable before you have the Companion Pass

One quick side argument that I’d like to add is one that Greg has made before me: Southwest Rapid Rewards points earned from their credit cards and shopping portal and other associated earning activity (which is to say not from transfers) are actually worth more before you have the Companion Pass than after.

That’s because before you have earned the required 135,000 points to get a Companion Pass, each point you earn from paid fares or Southwest credit card welcome bonuses or spending or the shopping portal not only buys 1.3c worth of airfare, but it also gets you 1 point closer to the 135K required for the repeatable Buy One Get One Free coupon that is the Southwest Companion Pass. How much a Companion Pass is worth is a subjective analysis that varies so much that I won’t even try to quantify it except to say that whatever it is worth adds some sort of value to the points you are earning en route to the pass.

For simple math, let’s say you were willing to buy a Southwest Companion Pass for $1,350 (you can’t buy it, this is just theoretical). That means that each point earned en route to 135K effectively buys you 1.3c toward airfare (as Rapid Rewards points) and 1c toward the Companion Pass (again, you can’t actually buy the pass, so this additional value is entirely subjective and meaningless except to say that the points get you closer to an object of value – the Companion Pass).

Once you have the Companion Pass, you no longer have that added value with each additional point you earn, so the points you earn from that time onward are only worth 1.3c per point.

While none of this section has anything to do with transfers from Ultimate Rewards (since transfers do not count toward the Companion Pass), I make this distinction to argue against my shopping portal premise above and say that you may choose the Southwest shopping portal at 1x over earning 2% cash back if those points will help you earn a Companion Pass and you highly value that Companion Pass (if you want to do the math, you’d have to value the Companion Pass at $945 or more to make up for the difference versus 2% cash back, but let’s not muddy things further with that math).

Note that I saved this section for last because it isn’t actually related to transfers from Chase, but it was tangentially related enough to my shopping portal point above that I wanted to include it for completeness.

Bottom line

Southwest Rapid Rewards points have relatively fixed value and that relatively fixed value is less than the Reasonable Redemption Value of Chase Ultimate Rewards points, which I think makes them a generally poor transfer partner (albeit still better than most non-travel redemptions). Given Chase’s transfer partners, there are a plethora of opportunities to get more value by transferring to almost any of Chase’s other partners. Importantly, the value of points transferred to Southwest does not double when you have the Companion Pass; the purchasing power of Southwest points remains constant as compared to the cash cost you will incur as a Companion Pass holder since that pass is effectively a repeatable Buy One Get One Free coupon that applies the same to cash as it does to points. I love the Southwest Companion Pass and I love Chase Ultimate Rewards points, but maximizing both of those things means understanding that the Pass does not make Ultimate Rewards points more valuable when transferred to Southwest.

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Greg B

Nick, I understand that in you’re argument, you’re comparing Southwest points to cash for a person that has CP. I hadn’t really thought of it that way, so I’ll have to re-evaluate my spend, i.e. SW CC vs cash back CC.

However, IMHO, your argument fails to take into account the increased purchasing power that CP gives you when using either points or cash. Not taking into account the purchasing power may lead to incorrect comparisons to other points systems. For example, if the value of SW point is 1.3c and the value of an AA mile is 2.0c, then that’s not really a fare comparison as to which point has more purchasing power. Having the CP doubles the purchasing power of either the SW point or dollar. That would be a farer comparison to the AA mile.

Even in the cashback situation, it seems to me that cash back that is destined for a SW purchase is more valuable then cashback destined to dine out. The reason being, that the purchase power of that dollar is higher with a SW purchase.

Frequent Miler Superfan

For us c students that went to public school….

Is the Southwest deal better than any other point deal with the other domestic airlines? If not which domestic is a better deal to transfer to for our economy seats?


Original commenter from the other article here. Not checking the site for a few days I was surprised to come back and find Nick has made a whole post in response to my comment (and that the article has blown up with its own comment section from the looks of it)!

Nick I appreciate the time you took to write this out. Your response on the other post quickly made me realize where my valuation error is, but I think the multiple ways of explaining it here help if the first explanation doesn’t click immediately. For me it all boils down to that an award booking is not required to use the Companion Pass (which I know, I’ve booked cash flights with it before).

Luckily for me this was all a quick theoretical idea when I thought about “what other Chase transfer partners are unique and valuable?”. Our family is on our second Companion Pass and we’ve accumulated so many Southwest points over time that we haven’t ever actually considered transferring UR to Southwest. Between card SUBs, referral bonuses, 5X and 10X targeted spending offers, and the annual points earning from holding a card you can somewhat easily earn in the realm of 200K points in a year (or more) which if you are booking Companion Pass flights on points is a lot of value to spend down. With no first class and the flights all being domestic that’s more flying than we do in a year even with a month of vacation time from our jobs.

I can somewhat see the argument in feeling like the points are more valuable in Nick’s points #2 and #3 on possible reasons to transfer anyway, in that if you are points rich but cash strapped the UR points transfer may be the difference in being able to take the trip at all (in essence you are required to make an award booking to take advantage of the Companion Pass, otherwise you just won’t fly). But your talking a pretty extreme example there where you’ve already covered other travel expenses like hotel on points and the couple hundred dollars for the one cash ticket is going to make or break the trip. If you were going to pay cash for the hotel there’s a good chance you could do better booking a Hyatt on transferred points and using that cash to buy the Southwest flight instead.

I’m looking forward to reading the long comment section on this one. In case anyone pointed out I can’t math – yes on a snap post on this one I definitely miscalculated the cpp value. It’s funnier because I instinctively know that UR transfers don’t make sense for our situation and hadn’t considered it but didn’t fully think through the math on how that plays out in valuations.


So, while this question isn’t directly about the cpp of UR points transferred to SW, I think it’s close enough to the present discussion to ask it here.

Let me grant Nick’s 1.3cpp take here for UR points transferred to SW. If one is only focused on points redemptions for flights (not hotels), and only economy flights at that (would never be willing pay more in points for more luxurious flights, even if you’d be getting “outsized value” in terms of cpp), then is SW still a bad transfer partner?

Guess I’m wondering how much of Nick’s “SW is a bad value transfer partner” take is based on his willingness (like many) to spend more points for more flight luxury. For those of us who won’t ever pay more than you have to to get from point A to point B, is SW a good option to transfer points to? (Again, ignore other transfer options like hotels. Just economy flights.)

Even as I write that question, I have a sinking suspicion someone is going to point out that there’s something “wrong” or confused about my question. But I’ll ask it anyway, as someone who has often transferred UR points to SW and would never pay more for added luxury on a flight.


Wow. Amazing that you could respond with all of that that quickly, Nick. Thanks! I think I’m following you here.

That said, in reading your response, I think I realized my true question (which isn’t really about the impact or non-impact of SW CP on points valuation, as interesting as that discussion is) is very tailored to my specific preferences and criteria: (1) don’t spend cash for flights when points are available (unless I could literally cash out the points I would have to use for that flight and use that cash to pay for the flight while having change left over, which I assume is basically never the case), (2) don’t spend more points to get from A to B than you need to (within reason; not going to take more than one layover on a typical flight just to save additional points; but, again, never going to pay more for a more luxurious flight), (3) yes, focused on domestic travel only (which is really what I look to SW for).

You don’t need to further answer (though I certainly won’t object if you do), since I’m sure it’s too much to try and address every idiosyncratic question from readers. But my question, again, isn’t so much about the core companion pass issue you were addressing (though I do have a companion pass), as much as whether I’m an idiot for transferring UR points to SW, given those said preferences/criteria. (I do in fact use UR points most often for outsized Hyatt redemptions, as I’m much more willing to pay extra points for hotel luxury than flight luxury. So I get that I get the most bang for my buck, er, point by just channeling my UR points to Hyatt. But assuming I still would really rather use points for my flights rather than cash …)

If it makes any difference, I have a good amount of both UR and Amex MR points, when it comes to what I have available to draw from. (Haven’t really tried the other types of cards yet.)

From some of what you wrote, I’m gathering that it’s at least often still pretty reasonable among domestic economy flight options to transfer UR points to SW (even if compared to other things you could do with those points, which you might value but that I might not, it’s not a great redemption). But I could be off.


Man, thanks again for these lightening speed replies. Indebted.

And got it. Yeah, I wasn’t fully getting what you were saying about the earning side. But I see it now.

That said, it is in fact the case that virtually all of my Chase points are earned on SUBs or 5x bonus categories. So I guess that makes my transfers to SW a bit less painful, if I’m hearing you right. Still I’ll keep what you’ve said in mind as I continue to evaluate stuff.

To your questions, my family of four probably flies 3-4 times per year these days, mostly domestic (including an annual Hawaii trip). We do have a Business Plat and will keep the 35% points refund in mind. (Though last time I inquired I could have sworn that even after the 35% back, I’d still be out more Amex points than I would be transferring Chase points for the same SW flight. I remember thinking that for some reason it was like Amex had different inflated pricing for the same flights. But maybe I was off. Travel planning and booking is often occurring in the middle of the night in our house, when all cylinders aren’t always firing.)

Hey, thanks again.

Nathan Weber

This article is a good example of why I read and recommend Frequent Miler over other travel blogs. I love the rational valuations with correctly applied logic and explanations.

In my particular case, flying Southwest is the best fit for my family less than once a year, so their Companion Pass isn’t something I chase after. If our travel patterns change and their Companion Pass would become a bigger money saver to us, I would prioritize earning 135K Southwest points via card spend, sign up bonuses, or shopping portal. My business has high CC spend and directing $135K of our annual spend to a Southwest card each year could make sense (absent other available options). Continuing to spend on the Southwest card vs a 2% cashback card after having earned the required 135,000 points to get a Companion Pass would be a poor choice.


When I first saw this article, I thought “Duh, that’s a lot of words to explain such a basic concept as comparing apples to apples.” Then I read the comments…

It’s hard to pinpoint the disconnect because your article is quite detailed, but it feels like some commenters feel like you are attacking SW so feel the need to defend an indefensible position.

Maybe the concept that’s unclear is not that Companion Pass enhances the value of your points but that UR transfer to SW is not a great deal (better to just get cash back)?


I think you’re up against the same type of people who will argue crazy high CPP on international awards with unrealistic circumstances. I can’t count the number of times I’ve had someone tell me they got 30cpp value on two separate one way crazy routing international F awards, when the realistic flight they would have booked for cash in F or J brings that number way down. People get hung up on trying to justify their high CPPs and you just have to smile and move on.


Your article disregards the inherent value of the Companion Pass, which is only offered by Southwest (excluding single use CPs from airlines like Delta/Alaska). In that regard, Southwest is a more valuable transfer partner than other airlines. For instance, if you had 100,000 UR and could transfer to either Southwest (with CP) or United (no CP) and the flights were roughly the same quality from a time and route perspective, you would come out ahead transferring your UR to Southwest over United by almost double the value (assuming United miles are worth roughly the same cpp per point as Southwest miles). Choosing United in this scenario costs you roughly double the UR and there’s no way to say that doesn’t mean anything from a value standpoint.

If every single airline offered the Companion Pass feature, then your argument starts to make more sense in how you calculate value. Ignoring the value of the CP and strictly valuing miles may be good for calculating cash saved (e.g. the couple only saved $130 because if they didn’t take the trip at all they would only have +$130 in their bank account), but it lacking when looking at value (United comparison above).


For most people, points are finite. If I’m getting twice as many tickets for the same amount of points on Carrier A as compared to Carrier B, but then you say Carrier A is not a more valuable transfer partner, then I’m going to wonder how you define the word valuable.


I’m not trying to be disrespectful, but your opening sentence is completely wrong, which is why I think we look at this differently. You said,

“It buys $X in airfare with Southwest. How many seats doesn’t influence the value you’re getting from the points.”

If I need 2 airline seats for me and my traveling companion and I have 10,000 UR that will get me 2 seats on Southwest, but only 1 seat on United because only Southwest offers the Companion Pass feature, then how many seats absolutely influences the value you’re getting from the points. Of course, certain conditions have to exist before the value is weighted in Southwest’s favor such as 1) Traveling with a companion, 2) Finding a preferred/equal route on Southwest and 3) Having the Companion Pass unlocked. But, because you can *only* unlock it on Southwest, it’s not a factor you can ignore when pronouncing the best airline transfer partners.

Forget airlines for a moment. This same argument could happen with Hyatt and Marriott. If you had the same 10,000 UR that could be transferred to Hyatt or Marriott, most choose Hyatt. Why? Because of categories and non-dynamic pricing. That’s a feature that’s unique to Hyatt now that Marriott, Hilton and the other big chains have transitioned away from flat category pricing. Within the Hyatt ecosystem, the cpp value can vary, but generally speaking you can stretch Hyatt points transferred from UR to more overnight stays than you can with Marriott.

Again, certain conditions have to exist: 1) Hyatt with availability at your destination, 2) A desire to stay in the Hyatt hotel and 3) Some factor whereby your ability to stay overnight is bound by your point pool (e.g. You’re not sufficiently wealthy to stay anywhere you want on cash at all times) and 4) Overnight stay is a necessity, rather than a luxury.

You’re not wrong when you stated in your article that the Companion Pass doesn’t transform the cpp value of cash saved from 1.3 to 2.6, but the effective cpp of a Ultimate Reward point transferred to Southwest for someone with the Companion Pass is doubled assuming that flying Southwest is equal in preference/quality to that of another carrier to said person.

If you’re strictly using the term valuable to mean cash saved, then we agree on that definition. But, the title of the article is about valuable transfer partners and calling the Companion Pass irrelevant in that determination seems unfair to Southwest.


I understand the math behind the calculations in the article. We all get it; it’s obvious. But here’s the thing, we don’t shop for travel like that. And I would argue, most everyday points enthusiasts don’t. You look at the product you are considering in the context of all other available options: the market.
The market is absolutely a valid determiner of points’ value, even in terms of cpp. This Christmas we are considering Cabo. Here are the flights from Denver to Cabo on December 21:
AA: $534 or 55k (.97cpp)
Delta: $579 or 38k (1.5cpp)
United: $754 or 40k (1.8cpp)
Southwest: $302 or 18.6k (1.6cpp)
We are a family of 4 with 2 companion passes. If we wanted to get the most “value” for our UR points pegged to the highest cpp as defined in the article, we would transfer them to United and pat ourselves on the back for a responsible use of our UR points…but this is obviously a stupid choice. Transferring to Southwest will net us several thousand more miles flown per point. Talking about Southwest points’ value in terms of what we could have paid with cash is meaningless. We aren’t looking to pay the least amount of money. We’re not going to pay any money. We must talk about them in terms of what we would have paid with other points in the market, because points were the only option that were ever on the table. And in this case the Companion Pass has, in fact, doubled the value of the points.

Are we still getting 1.6cpp if we reference them to what we could have gotten if we transferred to cash and bought the tickets. Yes, and that’s a valid argument to make; I get that. But if we reference them to the points market we are most definitely getting double the value (3.2cpp) and that is how many—I would argue even most—people shop because they are not interested in spending money on flights, and that is also a valid argument to make.


This thread had given me a better understanding is why half the people in my analytics department are from overseas


Seems like we’re splitting hairs here. I got the CP and utilize it to subsidize flights I was going to do anyways. Whether optimal value or not in terms of CPP, I find incredible value transferring some points over to make my trips $11.20 and a few thousand points vs a few hundred dollars. Whether I’m getting 2.6 CPP or it just being a coupon, the outcome is the same. While all of us in the points and miles game want to get good to great value, seems like we’re in the weeds unnecessarily here.


Excellent analysis. The 1x vs 2% example definitely makes the point.

Another wrinkle to add here is the SWA gift cards are often discounted 10%-14% (Costco, Chase offers, etc). The $130 theoretically becomes $112. In the 2% example, you’re now pocketing $88 instead of $70.

If you spent $22500 on a 2% card, you’d have $450. You then spend that $450 on a discounted $500 gift card. You’d be able to buy almost 4 of the $130 flights (500/130 = 3.8).

If you spent that money at 1x, you’d have 22500 SWA points which would get you 2 of the 10K flights (22500/10000 = 2.25).

The 2% gets you 1 full flight more than the 1x. And your companion goes along with you on that flight.


Is the value of Southwest points math or is it philosophy? If it is math there should be a simple equations that calculates their value. When you bing in discussion items like are WN points are more valuable when you are earning the companion pass then when you have the companion pass it seems like philosophy. Something is more valuable when you are earning the thing then when you have the thing.

Nathan Weber

The difference is not philosophical. There is an actual value difference that should be applied by those aiming to maximize their return on spend.

If one gets great value from a Southwest companion pass, it is rational to value some points higher based on the companion pass being earned by those particular points. After the threshold has been met, this benefit from earning more Southwest points is no longer there.


WN points have value only when used. The companion pass has value only when you use it. It is fake math to count your chickens before they hatch. You can not apply value to something until you have it and if WN points have their own value and the companion pass has its own value you cannot say in some instances they impact the value of the other but not in all instances. Cash is an appreciating asset with value every second you hold it. WN points are a depreciating tool with no value until used. Do I transfer UR to WN – never.

Nathan Weber

Hypothetically, if Southwest offered an option to purchase a companion pass for $50, would you buy it?

If yes, and as you say it has no value, why would you part with $50 USD for it?

I suggest a companion pass does have value to an individual based on how they anticipate using it.

Hypothetically, if Southwest offered an option to purchase 100,000 points for $200, would you buy it?

If yes, and as you say the points have no value, why would you part with $200 USD for the points?

We should value things based on their future anticipated use to us, not just our past gain.

Earning Southwest points instead of other points or cash rewards is irrational if we do not value the points we are earning.

When choosing which option to earn, we need to value each option in relation to the others.

For example, continuing to spend on the Southwest card vs a 2% cashback card after having earned the required 135,000 points to get a Companion Pass would be a poor choice.


My wife’s parents earned hundreds of thousands of BA miles in anticipations of going to Europe. They never went to Europe or spent 1 single of those miles. What was their value? Anticipated value is a good tool for making decisions but the actual value of any points or miles is not real until the moment you use them. The only thing that is real is cash.

Nathan Weber

Analogy time:
Let’s say I bought a brand-new manual car thinking I would learn to drive manual. Then I never learned and let the car sit in my driveway forever.
What was the value of my car?
You would say 0.
I would say what I paid for it as I would not have paid those $ for it if I did not think the car was worth that much.
What was the value I received from my purchase?
This might be 0 if I waste what I have.
Not using something of value does not mean there is no value to be had; it just means I did not take advantage of the value available to me.


May I assume that you (like most of us here) have earned points/miles from credit cards, shopping portals, and other promotions where cashback could have been an alternative option?

If those points/miles have no value, how is it not stupid to earn them instead of the alternative cash?


Sorry but a car is an asset owned by the purchaser. You cannot compare an asset you own to a loyalty account that is owned by the loyalty program and they can decide at any moment to change the rules or even close your account. Also I would not say the car value is zero in your example since it is an asset that can be sold.

I focus on earning points and miles I have a relative good idea I will use in the next 18 months. I do not want to be a hoarder of points because of devaluations. When I start to get a lot of points I do switch to a cash back rich strategy. I do not focus very much on CPP and more on accomplishing what I want to do. I have made lots of poor redemptions and I have also had plenty of really amazing ones. When my stash of MR points gets too big I will not hesitate to cash them out to my schwab account.

Aaron Xu

So in summary, Companion Pass doesn’t give you better cpp when looking at ways to redeem Chase points because it also lowers cash prices for flying with a companion. If you have a redemption in mind that is >1.3cpp, do that instead of transferring to SW.

However, CP does increase the value you get when spending SW points (or cash for that matter). It is fair to say, “Using CP, I got 2 flights for the price of one flight in SW points. That was a great deal.”

tl;dr Companion Pass makes SW points more valuable but does not make them a better cash alternative or transfer redemption alternative.

Aaron Xu

One more thing to add though. I fully believe that sometimes it is better to pursue suboptimal redemptions if they feel great. Let’s say a pair of flights costs $260 but only $130 with CP. If you use 10,000 points you only save $130, not $260. But spending only a few points and fees to get both flights feels awesome and I would look back on that redemption with fondness. Another example: I used 100% of my discover cashback on Chipotle gift cards. I could have chosen a higher-value gift card but I know they wouldn’t make me as happy as the fact that I haven’t used my credit card at Chipotle for the last 6 months lol


I always feel better getting more value than less but maybe what you’re getting at is that something used provides more value than something that isn’t used. A $100 Chipotle gift card that you’ll use up in a month is more valuable than a $200 Bass Pro Ship gift card that you might not use at all. In that case, the $100 Chipotle gift card is actually the optimal, not the suboptimal redemption. Your points valuations should be based on what you’ll actually use them for, not what you hypothetically could but won’t.

Aaron Xu

I agree with your point but what I really meant was that getting $100 of “free” food from Chipotle for repeated visits in a row just feels better than getting $110 off of a TV at Best Buy (that I was already going to buy). It is purely an illogical, emotional argument


To be pedantic, why don’t you just redeem your Discover cashbacks as cash? You are missing out on earning points from using a credit card (either spending towards a SUB, dining, or even Amazon/office supply store for gift cards).

Aaron Xu

I didn’t mention that Discover allows you to redeem cashback for discounted gift cards. If it was face value, I’d just be prepaying for my food and that would make me much less happy


you got it…sometimes gotta go for the feel good factor.

too much “logic” and “optimization”

throw caution to the wind!


I have a Southwest $100 gift card I bought a few years ago (At the grocery store or something like that – effective 20% back in MR points, I don’t remember anymore.).

It’s still collecting dust. Have flown Southwest since then…but I had eCredit that I used (And still have). Have some points too…but I don’t remember how much w/o logging in.

I just don’t fly Southwest often enough.

If one takes the effort to get a Companion Pass — there is a sunk emotional cost that one should use it while they have it. Thus transferring over points….
…if one has no particular alternative for them (Don’t stay at Hyatt/don’t like Hyatt or flush with Hyatt points – or can pay cash for cheaper; no other airline programs are relevant, etc..)

When you get in this game – it’s very easy to overthink (said it before). Or even end up traveling to places that you don’t really care to – but just did because it was a “good deal.”

GoBucketYourself Chris

12,000 UR points transferred to SW w/ Companion Pass can get me $312 worth of flights which Nick deems not valuable.
12,000 UR points transferred to Hyatt to save me $308/nt for a random Cat 3 Hyatt Regency I quickly searched & Nick deems that valuable.

The point is: if I have an SWCP then saving $312 worth of airfare by using UR 12k UR points is pretty freakin’ close to the same feeling when I save $308 at the Hyatt. So even if Reyes(whom I think is a super swell guy) doesn’t deem them to be equitable use of my UR, my sweet little bank account gives it a big fat


The whole point is that you aren’t saving $312 by using 12k UR. You’re saving $156. Your UR account should be thanking Nick for correcting your math.


No. If companion pass gets you $312 worth in flights, your cash cost would be only $156 ($312 ÷ 2) because you got the second flight for free. So, you’re redeeming 12,000 UR points to pay $156, NOT $312.


Say you have $312 and 12k UR and want to do both?

If you use the UR for SW, then pay $308 for Hyatt you have $4 leftover.

If you use UR for Hyatt and pay cash ($156) for SW then you have $156 leftover.

Which one do you pick? If you use the UR for SW then WHY, because you just gave up $150?

GoBucketYourself Chris

Alright, that does make a lot of sense. I mainly engaged because I thought it’s more of a perspective value than actual value–I’m super flush with my darling RR from other methods.

However, I do still see how one can look at it & say that because they used 12k UR they did offset $312 worth of flights but it’s helpful to also be able to look at it the way Nick(& later you) describe.

GoBucketYourself Chris

It would be funny to see that same kind of scrutiny applied to the perceived value of breakfast, rooms & parking at a Hyatt.

My 20,000 pts plus Globalist offset $400 worth of room & $100 worth of breakfast + $80 in parking…I’ll ignore the fact that the value of that room & food & parking was overinflated and I could have paid a lot less in cash than what $630 that Hyatt told me it was valued at. I’ll still perceive that my 20,000 UR was put to great use! 🙂 In both cases, you can apply an emotional feel of the value you got & still be able to do some math to prove the contrary.


Nick is right but his explanation is lengthy. James–your example is succinct and gets the point across perfectly.


Imagine you log into your UR account and are surprised to see only 2 options for redemption:

  1. Transfer to Southwest at 1:1.
  2. Cash out at 2 cpp.

You have companion pass. Which do you chose? If you can answer correctly, you agree with Nick.


I’m not sure what you’re trying to say. There is no option to cash out at 2 cpp. You could cash out for a statement credit at 1cpp and then spend it on SW flights, effectively netting 2cpp. That would be a Very Bad Deal, as Nick illustrates. You could cash out at 1.25 cpp with CSP or CIP, or 1.5 cpp with CSR, if Chase allowed you to purchase SW tix over the phone. The latter would yield 3 cpp given your CP. Getting 1.25 cpp would be worse than getting 1.3 cpp if you transferred 1:1.


Well but that’s double counting, if you could spend it on Southwest; because in that case, you’re not getting 2cpp, you’re getting 4cpp. Add in the qualifier that you can’t spend any cash on southwest during the 23 months of CP, so that your option is really just cashing out for 2cpp, and that’s a fair question.

And that is what it boils down to. The cashback option is superior *only if you can use it for the BOGO offer* – let me repeat. Only if you can use it, or fungible equivalent funds, on the BOGO coupon. You can’t use a BOGO on Hyatt, so that UR is worth what it’s usually worth, maybe 1.5 or 1.9 or 2.3 – but it’s not doubled. If you could cash out URs for over 1.3 cpp then it would be worth it, but only if you could use for SW. Of course, if you were going to plunk down 1k per night at the Park Hyatt, then those Hyatt points maybe are fungible into RR – and I know we’ve got some people who read this who probably do pay cash sometimes. They’re not the ones normally flying SW. but the point is that Hyatt isn’t fungible into the BOGO offer of CP unless you’re spending actual cash or equivalent.

To illustrate my point another way: you can’t cash out for 2cpp! Indeed, unless the CSR works to call in for a southwest purchase, as you hypothesize, you would have to get a very good Hyatt or UA redemption to to get as much value from a UR. (If you can get 1.5cpp on a Southwest purchase with CSR, as I’ve said throughout, I agree that is a superior option.)

I think the error comes in because you’re looking at cpp as a cash amount on one side of the ledger, and as actual value on the other side. You can’t eliminate a-priori the way you get points, because UR earning is far superior to normal 2% cashback (due to signup bonuses, referrals, and bonused spend). And you can’t mix and match between URs (that can only be cashed out at 1cpp) and 2% cash back. If you look at it all, in context, URs transferred to SW are the equivalent of 2.6% of value, and the transfer can thus make great sense. (Of course with the normal caveats about it being relative to your situation. If I’ve got 300k rr then another 10k in RR is not so beneficial…)


PS – what would make sense for 2023 would be moving to Aeroplan and using their PYB – because you get 1.25 cpp from their PYB, plus a 10% transfer bonus if you move 50k+. Even better with the 20% bonus they had in July… but even without that you get 1.375 cpp – plus whatever amount of points you would earn from SW (6x)!and the Chase card (1x).


Put another way, while you have the companion pass and are buying SW tickets ,
1 UR/SW point buys 2.6c of airfare, while 1$ buys 2$ worth of airfare.
The value of points increases while the value of money is also increased


“the value of money is also increased”

If your cpp calculation involves modifying the value of the US dollar, you’re doing something wrong.

If I have a coupon for 50% off at Dell, I don’t then say the dollars in my bank account are worth 2 cpc (cents per cent).


How you’re supposed to us CPP (RRV): Compare points to cash to determine whether to earn/redeem points or cash in a given situation.

How people like to use CPP: Compare a points redemption to a hypothetical cash redemption that no reasonable person would ever pay or that doesn’t even exist (e.g. cash redemption when someone with CP doesn’t have CP).


I think it is a fair interpretation to say the points are not worth 2.6 cpp. I think it is also a fair interpretation to say the points are worth 2.6 cpp. If we are going to define ‘value’ in relation to monetary costs, the market value of a product, good, or service—irrespective of what I paid or would have paid—is a valid means of assessing its value.


If the vast majority of people are paying $260 for two tickets, but I pay $130 for two tickets, my experience likely does not define the market.

Many–but not most–people have a corporate code that gets them discounted rates at a hotel. That rate, however, does not define the market value of the hotel room.


If you have a Chase Sapphire Reserve you can book Southwest flights by calling in at 1.5cpp. In this case, would it make more sense to transfer points to Southwest at “2.6”cpp? Of course not. Or, if Pay Yourself Back was happening, you could pay yourself back at a rate of 1.5cpp. Which would make more sense? Obviously transferring is not giving you 2.6cpp in value.


Absolutely the corporate rate goes into the cpp calculation. I only redeem the points IF my cpp (with corporate) exceeds my average redemption value.


Generally I only use points for international business or first class flights but I don’t expect to travel much and have enough points for at least 4 R/T tickets and can probably get more points on sign up bonuses which I’ve been avoiding lately.

Recently I’ve used AA and BA miles for 3 R/T first class tickets on AA non-stop flights going coast to coast because we are house hunting. For me it was a good use of the points, especially since I’ve had BA points for years and always find another point source to be better use than BA points.

As an engineer I will readily admit most people are very math challenge and often come up with strange ways to justify decisions.


Great post! For those of us who want to save cash and/or are points-rich, I still think transferring may be suboptimal versus booking through the Ultimate Rewards portal (for Sapphire cardholders). Sapphire Preferred cardholders get the 25% bonus ($1.25/point) on bookings in the UR portal, so I think (but haven’t done the math) that it would be slightly better value to book that way and earn points for flying a revenue ticket, rather than transfer and book with a value of $1.30/point and not earn points. And for Sapphire Reserve cardholders with the 50% bonus, it’s a no-brainer to book via the portal instead of transferring, right?


can you book via the portal now? I think you used to have to call (many years ago).

Paul B

I value Southwest points at more than 1.3 CPP, probably 1.6 to 1.8 CPP. Why, because almost every time I book with Southwest it is several months before my trip. During this time the cost of the flight will usually drop at least once or twice. So a flight I originally paid 20,000 points for may have dropped to 12,000. It takes only a 5 minute phone call to have the the difference of 8,000 points returned to my points account. The ease and simplicity of the refund process is very valuable to me.


agreed, I usually book cash southwest if it’s within a few weeks of departure and chances flight decreases are low. If long way out, points are super flexible and they often decrease.

In the past, you had to deal with a voucher that expired after a year. It’s not as bad now with the voucher not expiring, but it still can be annoying to manage.

From someone who has 100k southwest points right now with 0 plans to use them anytime soon 🙁


Transferring isn’t really that flexible… and it can only be done once (and for the whole amt)


That doesn’t affect the value of the points.

Just book in advance with cash, then closer to the date decide whether to cancel and rebook with points.


Arithmetic isn’t a strong suit for many and he’s not getting 2.6. This could easily be explained in a single paragraph.

But I’m going to play devil’s advocate here. It’s been mentioned many times that lifemiles is the most used ff program for the you and other authors on this blog, I also have had great success with the program despite it’s warts.

I personally value lifemiles at 1.2 because lifemiles sells them for that amount on a fairly regular basis so I only transfer a few k when I need to top off my account.

Would you recommend transfering lifemiles without a bonus?


I’ve never seen Lifemiles sell for 1.2 (175% bonus) cpp. 1.3-1.4 (145-150% bonus) seems to come by often though.


165 is pretty common public offer. I regularly receive what I assume are targeted offers. I purchased 100k with a 170% bonus last month

I also count the 5x from the platinum to calculate my cpp.

I purchased 30k for $990. I received a bonus of 51k and ~5k in member rewards points for a total of 8590 which is under 1.15 cents per point.

Buy LifeMiles with a 150% bonus
July 11, 2023
July 28, 2023
Buy LifeMiles with a 160% bonus
June 13, 2023
June 30, 2023
Buy LifeMiles with a 165% bonus
May 16, 2023
May 30, 2023
Buy LifeMiles with a 155% bonus
April 18, 2023
April 26, 2023
Buy LifeMiles with a 160% bonus
March 14, 2023
March 29, 2023
Buy LifeMiles with a 165% bonus
February 9, 2023
February 22, 2023
Buy LifeMiles with a 165% bonus
January 17, 2023


This comment was removed by the Frequent Miler team for being abusive / rude to another reader.

Last edited 1 month ago by Nick Reyes

There are so many interesting nuances on this issue (although none change the basic calculation — if you could pay $130 or use 10,000 points, then the points are worth 1.3 cents each).

Firstly, the unspoken assumption that we’re calculating value in US currency (or any currency). If, instead, we are calculating value in SFU (Southwest Flying Units, invented for the purpose of this argument) then you can argue that the companion pass doubles the value of both the points and your monetary holdings.

Secondly, I think people are missing out that the companion pass itself has a value. So, whether you spend $130 or 10,000 points on those two tickets, how to you “account” for the extra $130 of value that you received? It should be credited to the value of the companion pass itself. That value isn’t fixed, since it depends on how much you actually use the pass, but that’s where the value goes. And for those who says “well, it doesn’t matter how I divide up the value between the points and the pass”, that’s not correct because if you misapply that $130 to the points then, as Nick demonstrated, you will end up making economically “wrong” decisions about accruing those points.

Third(ly), consider the value of the credit card sign-ups that get you to the companion pass. In the simple case (the 120,000 point bonus, plus required spend, getting you to the companion pass) I would argue that those points — and thus the value of the SUB) really should be doubled. Making the simplifying assumption that you will actually “spend” all those points taking a companion, then the value of applying for and getting that card is really close to $3,510!

In the case where you get two cards to reach the companion pass, you could argue that together the two cards have the same value as described above. But, really, the value of the first card remains the same (since it doesn’t get you to, or even particularly near, the companion pass) while the second card is now worth four times the normally ascribed value since it gets you the companion pass which can now be applied to the points earned from both of the cards. (Or maybe, it’s worth three times the value since you already had the first card’s worth of points).

Finally, imagine someone who’s earning the points through spend and is sitting on 134,999 points. Well, the marginal value of that next point is $1,755.01!!!! That’s because it unlocks 135,000 points worth of value from the companion pass. That would be a very satisfying $1,00 purchase to make!


if we have Chase CSR , cant we call UR team to book southwest tickets using UR for 1.5c value ? why to transfer points ?


Discussed in the article.


Transferring was more valuable back when Southwest travel funds expired. I didn’t want to have a bunch of expiring travel funds when booking flights that I might eventually cancel.

Now that SW travel funds don’t expire, I likely won’t transfer points again unless it’s for a small top off.


I’m going to play contrarian to your contrarian view. Granted, I’m cherry picking a bit. A couple of years ago, the big news was the ability to fly one way on United to Hawaii for 7,500 Turkish Miles [CapOne, City BILT]. So, 30K points for two roundtrip was a “great” use of points. The trouble of course, is finding United Saver availability. Also, there’s jumping through the hoops of doing the booking. Oh, and if you want to cancel the ticket… good luck. I just checked multiple days in March LAX – LIH. There are lots of date pairs that can be had for under 30K points for two on Southwest (assuming a companion pass). Freely cancelable. Easy to book online. Yet, this redemption isn’t valuable?


Let’s say a flight costs $500, there’s saver availability for 25K if you have a MileagePlus card, and for 50K if you don’t. You transfer over 25K in URs. Are you getting 2cpp or 1cpp? I guess one could say you’re getting 1cpp for the URs and 25K in value from holding the card. But isn’t that tomato/tomahto? Either way, something already you’ve got increases the value of the transferred points.

Your original point was different, I thought. You were saying because the CP increases the value of both SW points and cash (and cash-equivalent points), that’s a reason to use cash instead of transferring SW points. I think that makes sense only if you have CSR and only if you can make the booking without a lot of fuss.


Because, as Nick pointed out at the top of the article, you can buy it with money.

You make an argument about why the TK award could be considered less valuable than the simple cpp calculation, but that doesn’t affect the value of the Southwest award.


From the West Coast, it is almost always never worth it to attempt the 7.5k through TK because of its impossible-to-book-through customer service. I would almost always suggest cash through Southwest, or a cheap legacy carrier cash fare (or points). From the East Coast, or smaller, regional airports, the cpp from the 7.5k through TK will almost always surpass any cash fare by a large margin.

East Coast (or smaller airports), just do not have the number of options that the West Coast has in terms of flights to Hawaii.

As an example, I booked RIC-DEN-OGG for 7.5k TK, a flight that cost about $600 in cash (one-way). That’s 8 CPP. The only other one-stop option, even, is a RIC-DFW-OGG, a flight that cost 22.5k AA.

There is no option on Hawaiian, Delta, Southwest, JetBlue, or any other carrier.

The 7.5k TK booking to Hawaii was NEVER meant for West Coast travelers to Hawaii. It is just not feasible to jump through so many hoops, to save (maybe) 5k points, especially when cash fares are usually so cheap.


A number of months ago SWA ran a promotion to would get companion status till Feb 2024 if you spent x amount of $$ on a new Southwest Visa signature card, which we did in her name. So now I am a companion on my wife’s account and I had accumulated over the years 1.3 million points in my account. She uses my points and then we add me as a companion. Seem like the best of both worlds. If an offer like that comes up again, are we able to get a new card, this time in my name, and would it be worth it?


My mother-in-law insists on buying everything with her Southwest card so she can earn points. I tried explaining to her that a 2% cash back card would actually earn her more Southwest points, but that they would come in cash instead. I even encouraged her to open up a separate savings account and to deposit the cash back into that account so she could feel like she had her own little separate account that substituted for Southwest points. No dice.


emotions rule over “logic” quite often, less so for those who are more self-reflective… love is blind goes the saying. Isn’t Southwest the airline of love? But…logic is only as good as your knowledge base…that aspect gets lost on many “logical” people.

How can you know what you don’t know? [lots of reading (easily manipulated), video watching (also can be manipulated), and experience (still can be fooled)]

Your knowledge base is only as good as your experience – which involves emotions.


If she’s chasing companion pass though, buying everything on the Southwest card IS preferable to a 2% cashback card.


She isn’t, but even if she were, it would depend on how much CP flying she does. She’s implicitly buying points worth 1.3 cents for 2 cents by foregoing the 2% cash back card, which means if she spent exactly $135K to earn the pass, she would net $1755 worth of Southwest points and $2700 worth of points. If she gets more than $945 worth of value from the companion pass, she’s technically right to do so, although I am sure we can also appreciate the utility and flexibility of cash as opposed to Southwest points.


I agree it is situational as you say. But I’m regularly paying $400+ for southwest round trips for the family because we have to travel on holiday weekends/peak travel times etc. It only takes 2 free companion flights at these prices to make the math swing in favor of charging to a Southwest credit card to earn a companion pass versus charging to a 2% card.


I don’t think it’s correct to say that because you could use cash instead of points, you don’t get 2.6 cpp of value. Rather, a CP means that the value of *both* points or dollars would be doubled.

In a world where you could magically go back and turn 1 point into 2 cents, sure you would rather have the 2 cents. But you can’t convert URs into 2 cents. If you have CSR, and can use it on Southwest, yes it would be be better. But you’re comparing with cashback, and that’s just false. First, it’s a rare cashback card that can get over 2 cents per dollar, the way various UR cards can earn 3x and 5x. Second, it’s hard to earn cashback in large amounts. Which is why it’s easier to amass decent amts of URs than decent amounts of money or money-equivalent that can be used for travel. Finally, if you have money or money-equivalent, there’s usually a better use than spending cash on Southwest. For money, put it in a CD. For money-equivalents, you’ll want to use that for other things: rental cars, independent hotels, theme park tickets, etc.

So I think you’ve created a false hypothetical.


Well, good luck pulling out your companion pass in a liqour store and trying to convince them that it entitles you to leave with $260 worth of bottles for $130 in cash!

If the companion pass doubles the value of your money, then those 2% cash back cards are now 4% cash back (since your money is worth twice as much as regular money).

Multipliers on cards don’t change the value of the points you earn, just the number of points. They change the value of the per-dollar earning on the card. So, sure, it’s better to earn 5x points (even at a measly 1.3 cpp value) than 2x cashback but that doesn’t make the points themselves more valuable. That’s an argument for using the Chase card through a 5x opportunity versus a cashback card at 2%, not an argument about the value of the Southwest points. Also, if your money is now worth double, obviously the best spend opportunity is the US Altitude card which has now become, through the magic of cash-doubling, a 9% cash-towards-travel card.


Pardon me if I neglected to specify the (TOTALLY OBVIOUS) qualifier that the CP doubles the value of cash *expended on Southwest tickets*?

You’re right that the Altitude Reserve (which I have and love) could be redeemed towards cash travel spend, including if used towards a Southwest reward. But without an ability to get a new bonus (supposedly once per lifetime), I would need to spend $2888.88 on the card in order to amass points worth $130, and then not use them for anything else. First, I normally use those points to cover taxis to and from the airport – getting 4.5% back. So my points don’t sit around long. But also, most of us have limited spend. I’d want to use that spend toward a bonus that would get more than 4.5%. For instance, the CIP 8K/100K offer which is next up for P2. It would make no sense to prioritize Altitude spend or cashback spend over bonus spend. That’s exactly the point I was trying to make.

Even if it might seem that cash is more efficient then spending UR points for Southwest, if you left out all that context, once you add in that reality, Nick’s article is either an argument for (a) inefficient 2% cashback card spend, or (b) spending more on travel, i.e., money that you would otherwise save or spend in another way. Maybe spending a bit more on travel can make sense for some people, but not for me, and I think not for most. Hence, it’s a false hypothetical.


neglected to specify the (TOTALLY OBVIOUS) qualifier that the CP doubles the value of cash *expended on Southwest tickets*”

It’s not obvious because nobody thinks of BOGO deals as doubling the value of cash, in whole or in part. It’s not a useful way to think of BOGO deals precisely because cash is fungible and partitioning cash as “only for Southwest tickets” is mental accounting, not an actual thing.


But that’s Nick’s whole point: you get twice the value from cash, just like from points. But as you say, cash is fungible, and we all have lots of uses for it. Ergo, I’d prefer to use points for Southwest flights.


Alliant Credit Union — 2.5 percent cash back on up to $10k per month — no strings.
Bank of America — up to 2.625 percent unlimited — qualifications.
Greenlight Family Cash Card — 3 percent unlimited — monthly fee.

The conversation is premised on you already having a Companion Pass. Pretend that Southwest gifted it to you for life. (And, there’s an indirect way to do this.) Nick is saying there’s a different decision in front of you . . . it’s an incremental cost decision:

– You can pay $130 cash for two tickets to Vegas or
– You can pay 10k points for two tickets to Vegas.

It doesn’t matter that someone else has to pay $260. The only thing that matters is that YOU only have to pay $130 . . . or 10k points. And, that works out to 1.3 cpp.


Sure, I get all that.

But: where do the points or cash come from? Cash is fungible, so it’s essentially coming out of your savings. Maybe you’ve got a maxed out 401k already, and you’ve got money burning a hole in your pocket. Most people don’t.

Travel-cash-equivalents, like URs, AltRes, or PYB are points you could use for some other form of travel. But they’re coming from a pool of points you could amass by daily spend, or bonused spend.

I agree it could make sense to spend URs if you can use CSR, or if you have sufficient points from elsewhere, such as a bonus (AltRes 50K, maybe Aeroplan points). I do not think it makes sense for most people to spend on a 2% cashback card to fund Southwest travel, since there are so many other better alternatives.

The potential use of Aeroplan points might be the best way to explain this. You can redeem Aeroplan points at 1.25cpp, and since the CP makes $1 worth $2, you’re cashing out for 2.5cpp, plus whatever SW points you’d earn. That can make great sense. But it makes great sense because you can earn 75K for spending 4K – you’d be earning ~20 points per dollar, meaning you’d get 50% rebate on that spend. And/or because you can transfer in URs that you earn 5x, which is 12.5% rebate. Those are both great options… 2% rebate * 2 = 4% rebate. 2.625%*2=5.3%.

By contrast, with earning URs and transferring to UR, earning at 5x UR getting 1.3cpp =6.5%. On a CIP sign-up bonus, that’s 13.5UR per dollar = 17.55% rebate if transferred. Even 3x UR earning is about 4% back if transferred to SW.


Cents/Point (cpp) is a ratio, and when you double both sides of a ratio as the companion pass does as you say, the ratio is still the same. Whether you think of it as a choice between the $130 or 10,000 points you would spend, or a choice between the value you’d be getting ($260/20,000 worth of flights) it’s still 1.3 cents/point. Cpp is a tool (first and foremost, by name and definition) to help decide whether to use cash (“cents”) or points for booking a redemption through a given program, or to use points.
It can be helpful in deciding which program to use for a given redemption, but that always has lots of other factors (does elite status add perks that aren’t factored into the cash value, are bags included, whether the cash fare fits what you actually value, etc.) If you have a companion pass, you may choose to use southwest even if the cpp is technically lower because the cost will be lower overall, but that’s different from cpp. Once you decide Southwest is your best option, then cpp come into play whether you book that flight with cash or points, but you’ll still only get 1.3 cpp. Which as the post says, isn’t a great value, but it could make sense if you fit into the situation he describes.
As for the earning cashback vs points question, he’s not talking about going back in time, or trying to turn 1 UR already earned into 2 cents cashback. He’s talking about how the way you value points right now then impacts how you will prioritize earning them in the future, and if you misuse the calculation for cpp, it’ll lead you to poor choices. Like earning 1 Southwest point (or 1.5 UR on CFU with the intention to transfer it to Southwest) on non-bonused spend instead of 2% cashback thinking the 1-1.5 Southwest points will get you farther than the 2% cashback, which it won’t in most cases. Getting the best return on your spend is dependent on having an accurate estimate (and not falsely inflated compared to cash) of what value you’d get from points.
And I guess I don’t see the connection between your point about URs being easier to earn that cashback, etc. and any of the claims in the article. If you have an abundance of URs, that may lower the minimum cpp you’d redeem for (as long as you’re still getting at least the 1cpp cashback rate), but that does not make Southwest any more valuable a transfer partner, nor does it increase the standard cpp value of Southwest points (with CP or not) beyond 1.3 (or 1.4 or whatever it actually is right now). If you have a CP and either have enough points to cover all your travel through higher value partners, or else don’t have a practical need for anything else in the foreseeable future, then Southwest is a great option. But it’s still 1.3 cpp, and not a great value if there are other things you could be using those points on in addition to your SW flights.

Great work Nick! It may seem like such a small thing, but as you’ve shown, it can lead to some poor choices.

Qi Wan

Excellent explanation and very clear. Sometimes people are thinking too hard on this game too. Take it easy and enjoy.


Good argument. It’s why Hyatt is such a poor transfer partner for me. With my discounted industry rate I can usually find a comparable Marriott that’s half the price of a Hyatt. As a result Hyatt points are usually worth no more than 1cpp. So it’s either airline points ( which I don’t need ) or PYB which I do need.


How do I get a discounted industry rate? 🙂


I personally agree with the way you think about hotel point value (that you should treat hotel rooms like commodities and calculate the value from the cheapest equivalent hotel room, not the rack rate of the room you actually buy). But that reasoning is different from the reasoning that Nick is using here — the corresponding logic would have you calculate the points value based on the chepeast economy airfare on the route you’re flying on any airline.


Good point. I guess if my cash Hyatt rates were cheap that would be more comparable to this situation.


While I understand the point you are making my experience is almost the opposite albeit a smaller sample size.

My last Hyatt redemption was at Hyatt place San Jose del Cabo. On the website it was ~$130 per night with tax but the off peak points rate was 3k points per night, so over 4 cents. I’ve never received less than 3 cents per point on a Hyatt redemption. Marriott on the other hand if I get 1 cent I’m doing backflips and .7 cents seems about average for Marriott.

And I’m also curious about this industry rate. Is it through your employer?


Yes an employee rate. And for cat 1 hyatts off peak points can often be a great redemption. ( for most people ) Even better when it’s a hotel you’d pay cash for anyway instead of let’s say a $2,000 / night hotel.


The simpler way to explain it would be this. To take advantage of the companion pass with the transferred points (sticking with the example) takes 10k. But if you could book 2 seats with 10k points you could always do it with $130 instead. So the 10k points are worth $130.


I definitely agree with this post, however, I have found times where you can get outsized value from southwest points, usually on flights that are already cheap in the first place. Recently I made a redemption for a $59 flight, but only paid 2,500 points, getting a bit above 2 CPP. I’ve made similar redemptions in the past.


Ah, thought that was referring specifically to international flights, whereas I’ve seen it on domestic flights as well.


So, in your consider this example, you are completely separating the cash back from the companion pass.  You cannot do that.  In order for your example to be valid, you must first have the companion pass.  
If you do not have the companion pass, or for some reason chose not to use it (maybe just for the sake of the example), you would be $60 short of the purchase price for two tickets; whereas, if you had taken the points, you would have paid for the price of two people to fly.  
Essentially, you must have the companion pass, and you must be choosing to fly Southwest to have the $70 left over.  If you you are not using those points to fly Southwest, or you do not have the companion pass, all things being equal, the value of your 2% diminishes.  
In your Reserve vs Southwest portal comparison, 3X vs 3X, if your focus is on Southwest flights, the value would essentially be equal.  Your points do not necessarily become more valuable as a companion pass holder, but they become less valuable across air travel in general if you do not have companion pass.  Without the ability to have your companion fly free, you are on the hook for two tickets regardless the airline you choose.  
I am not saying they are worth 2.6 cpp.  My argument here is not exact value.  What I am saying is that without the companion pass, the numbers you used above do not work with Southwest, and very likely any other transfer airline you may choose since you would be on the hook for two tickets.
Personally, I have never transferred UR to Southwest.  I always have a decent supply of points with them.  I am a companion pass holder, and often compare prices in-spite of holding the companion pass.  Other than the low cost carriers basic flight price, I cannot say that I have ever found two tickets cheaper than the price of purchasing and using companion pass to a specified destination.  
My argument here is not about the value of transferring to Southwest vs another transfer partner.  My argument here is value with companion pass vs without, or with companion pass vs booking two tickets on another airline.
I know your goal is to inch out every cent of value.  I tend to do the same.  In this case, making cross comparisons to non-airline partners is likely the way to get higher value out of UR.  I still find it tough to say that you are not getting double the value out of your points if that was the method you were absolutely going to use.  
This is tangencial, but Southwest has a way of doing things that simply adds value, and convenience to your purchase.  When gauging outsized value, a dollar amount can be hard to pinpoint when you include or preclude the small details, especially in the Southwest world. 
I am sure there are considerations I simply have not thought about in this argument.  I am open to hear them.  


The actual value of the currency obviously does not change, but the amount of product that you receive for the same amount does. By default, you are obtaining more value out of the same number of points, or cash, which in turn makes those points used for that specific product more valuable at that moment.
So by having the companion pass you are using exactly half the amount of points, or half the amount of cash it would take for two flights. If you only earned 10K UR specifically for a flight, with a Southwest transfer, and companion pass, the result is two flights. If you are looking to other airlines, or do not have companion pass, is the result two flights for those 10K UR?
We agree that neither the value of the points, nor the cash changes. What changes is the amount of product. I cannot imagine anyone saying, do not give me more product since the value of my currency for said product will not change by receiving additional “free” product.
My thought would be that I received twice the amount of product for the same amount of currency; thereby, making my currency go twice as far.


You’re confusing the value of the points with the value of the companion pass itself. I think what bugs people is that when you have the companion pass and spend 10,000 points or $130 to get $260 worth of flying, what happened to the other $130 of “free” value you got? You have to account for that value somewhere, right?

That value belongs to the companion pass, not the points (or the money) you spent.

You have to distinguish because if you don’t, then after you have the companion pass and you’re making decisions about accruing or transfering points, if you misapply that companion pass value to the points themselves then you will end up making the kind of economically “wrong” decisions Nick describes in the article.


There has to be a less convoluted way to explain this. Stopped at 3rd paragraph


Yes here is the math. The example is $130 or 10k points (1.3cpp) for 1 ticket. If you have the companion pass, you still either pay $130 or 10k points for 2 tickets. So you still only buy 1 cash ticket at $130. Your redemption value is 1.3 cpp.


So what happens if you end up with two tickets for $130, or 10K points?
What is the math there?


The math is 1.3cpp. The fallacy to get to 2.6cpp is that you have to buy 2x tickets at $130 each ($260) or use 10k points. But you only need to buy 1 cash ticket at $130 or use 10k points for 1 person to fly or for 2 people to fly. So you will always get 1.3cpp.


Your math is the value of Companion pass, not the value of SW points. The points value stays fixed.


We’re a two player household based in DFW so we frequently have to compare between Southwest and AA fares across all our different currencies. With the SW companion pass, it can save us a ton of points. I think the “value” everyone gets is tailored to their specific uses. Let’s say we want to fly to Chicago and a one way ticket is $129 on southwest (8,808 pts as I see for an example date right now). So if we both flew southwest it would be 4,404 chase UR (transferred to SW) per ticket to get to Chicago. Alternatively I could look at BA Avios to redeem on AA flights. They have nonstops the same day for 9,000 chase UR (transferred to BA) each or 18,000 total. In this case I see this as us saving 10,000 pts (approx).


Or you can use cash ~$57 price point (using the 1.3 cpp from the article) per SW ticket. Obviously there are reasons people occasionally wouldn’t want to use cash (as highlighted in the article) but the point stands, those UR points are only getting you ~$57 and Nick is arguing that isn’t a great redemption of UR points.


Excellent explanation. The 1X vs. 2% example alone makes the case.

Don’t really use Southwest but enjoyed the logic.


I use SW and have the companion pass. I agree the 1x vs 2% example made the case in a way I hadn’t considered before. Thanks Nick. The signup bonuses on the SW credit cards paired with the companion passes are excellent but as I’ve burned through most of my SW points I was beginning to consider transferring Chase points to SW. After reading this, I’ll pay for SW flights with cash once my SW miles are used up and continue to transfer my Chase points to Hyatt like I’ve been doing. This article was timely!

Dave C

The argument is that CP + pts is double the value of no CP + cash (or no CP + points). You are essentially saying that CP + pts = CP + cash, which I don’t think anyone would argue.


In math class, it’s about setting up the problem. The question here is: what’s the proper framework to establish value? CP vs. no CP, there’s twice the value. But, if someone already has the CP, that’s no longer the question. It’s points vs. cash. In the end, no matter what, those 50 passengers who need a little extra time will take all the good seats and you wished you’d booked another airline.


What are good seats?
I am A-List, and we hold CP, but we frequently make our way right to the back.
For some reason, everyone wants to sit right at the front on Southwest. I see no good reason for that other than the odd off flight where you have a tight connection.


I admit I’m just an extremely impatient person and like to spring right off.


Conclusion statement is Pulitzer worthy . Brilliant


Well written and thorough like normal, thanks Nick! I do value SW points a little higher on occasion where booking tickets for others where plans are not that firm like you say in number 4. But then I value them a little less for me since I also loose out on the earning potential when I fly. And cash is a little more flexible with southwest then it used to be since funds should never expire now if booking or re-booking into the right fare. All these nuances do make it complicated for sure. I really should design a spreadsheet to help me with decision making as it’s easy to get caught up in earning. Just yesterday I was ordering Uber eats for a friend since I’m in Norway at the moment and I almost ordered more food for him to get Marriott points but in the end I’m like too much hassle to earn points that really don’t add that much value to the transaction. It’s easy to see why companies make things so complicated tho!