Southwest Airlines Credit Card Revamp: New Fees & Benefit Changes

Southwest Airlines is making significant changes to its credit card lineup, raising annual fees by an average of 50% while promoting “enhanced benefits”, some of which were free for all passengers just months ago. The timing of these increases coincides with Southwest’s broader transformation away from its traditional low-cost model, including the end of its iconic “Bags Fly Free” policy and the introduction of assigned seating.

While Southwest markets these as improvements, the reality is that travelers are now paying significantly more for perks that used to be included with every ticket.

Personal and Business Credit Card Annual Fee Increases

Southwest’s credit card annual fee increases are substantial across all cards in the lineup:

These increases far exceed typical inflation rates, which have averaged around 3% annually. New applicants face these higher fees immediately, while existing cardholders get a reprieve until their 2026 renewal dates. The scale of these increases suggests Southwest is banking on cardholders accepting higher costs rather than shopping around for alternatives.

New Card Benefits That Aren’t Really New

Southwest is promoting several “enhanced benefits” to justify the higher annual fees, but a closer look reveals these aren’t as valuable as they appear. The marquee benefit is free checked bags for cardholders and up to eight companions, which is a substantial companion checked bag allowance compared to most airline credit cards. However, this was a universal Southwest perk until May 28, 2025, when the airline began charging $35 for the first bag and $45 for the second bag.

Essentially, Southwest eliminated a 50-year policy that made it unique among major airlines, then repackaged that same benefit as a premium credit card perk. What was once included in a $79 ticket now requires a $99+ annual fee to access.

The cards also offer priority boarding, but this benefit loses some luster when you consider Southwest is abandoning its beloved (by some, at least) open seating system in January 2026. For over 50 years, Southwest passengers could choose any available seat, making early boarding genuinely valuable. With assigned seating, priority boarding becomes a more modest perk similar to what other airlines offer. Every level of Southwest Rapid Rewards credit card, no matter the annual fee, gets the same priority boarding group.

Enhanced earning rates of 2x points at gas stations and grocery stores are average at best and somewhat standard across the credit card industry. Many competitors offer similar or better earning rates in these categories on no-annual-fee cards. The 100,000-point welcome bonuses on the personal cards are generous, but these temporary promotions don’t offset the long-term cost of increased annual fees. For most cardholders, aside from the first-year sign-up bonus (valued over $1,400 according to our first year value calculator), these cards will be a question mark on renewal.

Terms apply. Offers subject to change. Refer to card issuer for full details.

Southwest Airlines’ Onslaught of Recent Changes

These credit card changes are part of Southwest’s broader shift away from its traditional low-cost, customer-friendly model. The airline ended its “Bags Fly Free” policy after more than five decades, joining every other major U.S. airline in charging for checked luggage. This move alone represents a significant revenue opportunity that Southwest previously left on the table.

Starting January 27, 2026, Southwest will replace its iconic open seating system with assigned seats, eliminating another of its most distinctive features. The airline is also introducing new fare types, including a restrictive basic economy option that strips away even more previously included services.

These airline changes transform Southwest credit cards from nice-to-have rewards cards into niche products for frequent Southwest travelers. The problem is, the airline isn’t doing much in general to attract loyal customers. Where cardholders once enjoyed enhanced benefits on top of an already generous core experience, they now need cards to access what used to be standard service. 

The cumulative effect is that Southwest is becoming more like its traditional competitors while charging premium prices for the privilege of avoiding fees that didn’t exist until recently.

Getting Value From Credit Card Benefits

From a pure numbers perspective, the math on Southwest credit cards has become less favorable. A traveler would need to check at least three bags annually to break even on the Premier Card’s $149 fee, assuming they would otherwise pay Southwest’s $35 bag fee. This is after factoring in the 6,000 annual bonus points for holding the card. For families or frequent travelers, this calculation might work out more easily, but casual travelers will find it harder to break even. 

When compared to other airline credit cards, Southwest’s value proposition has diminished. Many competing cards offer similar benefits at lower annual fees, and some provide more generous earning rates or valuable perks like lounge access.

Strategy for Earning Companion Pass

The Southwest Companion Pass remains one of the most valuable Southwest benefits available, so it will likely be the next to go. This program allows you to fly a guest with you for free all year (just pay a couple of bucks in taxes and fees). Nick at Frequent Miler dug in on these card refreshes and his theory that the companion pass benefit is next to be gutted. It’s a solid argument and reason to go after the companion pass now.

To earn a companion pass without the traditional heavy rotation flying requirements, you need to accumulate 135,000 qualifying points in a calendar year. Many will time their Southwest point earnings to credit in bulk at the beginning of a new year to unlock the companion pass, because it’s issued for the current year and the following year, which nets nearly two years. And a Southwest card welcome bonus, plus the 10,000 point companion pass boost, qualify toward the required points. 

If Southwest announces changes to the companion pass eligibility this year, the strategy outlined won’t work, because they will likely change the terms starting in 2026. Acting on this benefit now may prove the best option, and you’ll still be getting over a year of companion pass (remainder of 2025 and all of 2026). 

Bottom Line

Southwest’s credit card changes reflect a broader industry trend of airlines monetizing previously free services while positioning premium cards as the solution. Whether these changes represent good value depends mainly on your travel patterns, loyalty to the airline, and using a card wisely to offset the annual fees. If nothing else, it’s an exceptional welcome bonus for the first year and is worth applying for anyone who qualifies.

Southwest Credit Card FAQs

When do existing cardholders see the fee increases?
Existing Southwest credit cardholders will see the new annual fees on their 2026 renewal date. New applicants pay the higher fees immediately.

If I had a Southwest card in the past, can I get it again and earn the bonus?
You’re not eligible for a Southwest personal credit card bonus if you’ve received one within the past 24 months, even if you’ve closed the account. If you’re past the 24-month mark from your last bonus, you can reapply and earn the welcome offer again. However, this 24-month rule doesn’t apply to business cards. You can hold both a personal and business Southwest card simultaneously and earn bonuses on both. 

Are the new benefits worth the higher costs?
For travelers who check bags frequently on Southwest, the free bag benefit may justify the cost. However, casual travelers will likely find better value with other airline credit cards or by paying bag fees when needed.

How do Southwest cards compare to other airline cards now?
Southwest cards are now priced similarly to or higher than many competing airline credit cards, but often offer fewer premium benefits like lounge access or statement credits.

Can you still get a Southwest Companion Pass with card bonuses?
Southwest’s recent trend of eliminating customer-friendly policies suggests the Companion Pass could be modified or become more expensive to earn. The airline sent out a survey in 2025, which hinted that the companion pass would become an elite status benefit. If this happens, 2025 may be the final year to earn the Companion Pass under the current system. 

Should I cancel my Southwest card?
Consider your Southwest travel frequency, bag-checking habits, and whether you’re working toward Companion Pass status. Many cardholders may find better value elsewhere, especially if they don’t fly Southwest exclusively. 

Editor’s note: Opinions shared in this article are solely the author’s and do not represent the views of any bank, credit card issuer, hotel, airline, or other organization. The content has not been evaluated, approved, or endorsed by any of the mentioned entities. These are our recommendations but it isn’t financial advice. We may receive a commission if you click through any of the links in this article.

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