Southwest announced this week that it’ll soon be launching the Southwest Rapid Rewards Debit Card.
The landing page for the announcement provides very sparse details, simply stating that you’ll be able to earn Rapid Rewards points on purchases and that the card will be issued by Sunrise Banks. Sunrise Banks is the company that issues the Wyndham Rewards debit card that launched six months ago.
Although that landing page doesn’t provide any other details about the card, I did manage to discover a different landing page which provides far more of the card details.
Based on what’s listed there, when the card launches it will:
- Have a 2,500 Rapid Rewards point welcome bonus after you have two recurring deposits and spend $100 in the first 90 days
- Earn up to 7,500 bonus points per cardmember anniversary (rather than calendar year) based on your annual spend
- Earn 1 Rapid Rewards point per dollar on:
- Southwest Airlines purchases
- Dining
- Subscriptions
- Earn 1 Rapid Rewards point per $2 dollars on:
- Everything else
It doesn’t seem like the card has been officially launched yet because when clicking on links such as ‘Account Agreement’ or ‘Points Earning Terms’, those are blocked from viewing. However, clicking on ‘Open Account’ does start taking you through the process of applying for the card. I only went through the first couple of pages, so I’ve no idea if you can fully submit an application, but I’d hold off for now anyway just in case the bonus doesn’t get applied correctly to accounts applied for before a certain date, if that’s even possible in the first place.
Similar to the Wyndham debit card, this isn’t the most compelling of cards. 2,500 Rapid Rewards points are worth ~$32.50, while the earning rates for spend are fairly poor too.
Seeing as the full account terms are – as of right now – blocked from viewing, we don’t know if there’ll be some kind of monthly account fee, if there’s a way to waive the account fee (if there is indeed one in the first place), how much spend is required to earn the different thresholds of anniversary bonus points (I’m assuming there’ll be thresholds based on the ‘up to 7,500 points’ wording), if the card will be eligible for some kind of Companion Pass qualifying points boost, etc.
With regards to that latter point, Southwest credit cards offer a 10,000 Companion Pass qualifying point boost each year. That means that rather than having to earn 135,000 qualifying points to get a Companion Pass, you only have to earn 125,000. I’m assuming the debit card won’t be as generous as that, so if it does come with some kind of boost it’ll more likely be for 2,500 or 5,000 qualifying points, although I imagine it’ll much more likely not come with any kind of boost whatsoever.
If that’s true, it means you’d need to conduct $135,000 of spending on the card in the 1x categories (Southwest, dining, and subscriptions), or a whopping $270,000 of spend anywhere else, to earn a Companion Pass.
This would therefore be an extremely laborious method of earning a Companion Pass. While it wouldn’t be recommended for most people, I can see as few potential scenarios where this might be the route someone goes.
A key one is for someone who can generate a lot of debit card spending for transactions where credit cards aren’t accepted, or where debit card payments attract significantly lower fees. For example, someone with an extremely high tax bill could pay a ~$2 debit card fee rather than a 1.75%-1.85% credit card fee. Most people would benefit far more from opening one or more new credit cards and earning the welcome bonuses on those through the tax spend, but there are people out there who won’t want to do that.
Along similar lines, people who simply don’t want to hold credit cards might appreciate being able to earn Southwest Rapid Rewards points through spend on a debit card. It’s also an avenue for people to earn additional Rapid Rewards points who are frozen out of obtaining new Chase Southwest cards due to the 5/24 rule.
To determine your 5/24 status, see: Easy Ways to Count Your 5/24 Status. The easiest option is to track all of your cards for free with Travel Freely.
Overall though, once launched this Southwest debit card will be a fairly niche product with few use cases for people who want to earn any significant number of Rapid Rewards points.
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FWIW, my experience with the Wyndham debit card by Sunrise has been terrible:
-They constantly charge me the $6 monthly fee, even when I’ve kept the $2,500 minimum in the entire time.
-No non-signature transactions earn anything.
-Nothing but everyday signature purchases have worked–i.e. purchases that would earn much better with a regular 2% credit card.
I’d recommend passing on this unless multiple early data points are very promising.
My car loan is now accepting debit cards with a 3% fee. Don’t know if this would be worth it to earn some extra southwest points for paying my car note.
Definitely not worth it. You’d earn half a Southwest point per dollar worth ~0.65%, while paying a 3% fee.
Regarding the large tax payment strategy, a debit card typically has a transaction dollar limit. $5k or $10k at most.