🔥 Hot Take: Southwest's new Cash + Points option is...

Estimated read time: 4 minutes and 31 seconds

Good morning and welcome back to the world’s happiest travel newsletter. 🙋🏻‍♀️ Like Coldplay once said, here at Daily Drop, it’s all yellow.  

Here's what we've got for today:  

• 🔥 Hot take: Southwest’s Cash + Points option is… meh

• ✈️ How do you get HOME using miles and points

• 🎙️ Catch up on the Daily Drop podcast

🔥 Hot take: Southwest’s Cash + Points option is… meh

Southwest actually introduced this as an option a few weeks ago, but it was quite limited.

They’ve now expanded this to all Rapid Rewards members, but… I don’t think it’s a very good deal 😬

Before I give you my hot take on the whole thing, let’s just review what it actually is.

As the name Cash + Points suggests, you will now have the option to use a combination of cash and points to book a flight.

Previously, if you didn’t have enough [[ southwest-rapid-rewards-plus-credit-card.points-program-override.points-currency ]] to cover the entire redemption, you were just out of luck.

Now, when you get to the booking page, you’ll see where you can select the “Apply Cash + Points” option as well as a few different combinations for how many points you’d like to use 👇

Okay, here’s my take. Historically, [[ southwest-rapid-rewards-plus-credit-card.points-program-override.points-currency ]] typically have a value between 1.2 - 1.5 cents a piece.

Now, if using the Cash + Points option (and almost no matter how you spin it), it appears you’re only getting about .6 cents per point in value.

Just look at Southwest’s own example above! They’re valuing 3,320 points at $20 all the way up to 15,771 points at $95.

Doing the math yields a value of just .6 cents. Which is half the typical value of [[ southwest-rapid-rewards-plus-credit-card.points-program-override.points-currency ]]. I have two words… 👇

The other thing to keep in mind is that by booking with the Cash + Points option, you will not earn Rapid Rewards points, nor will you earn qualifying points toward A-List, A-List Preferred, or Companion Pass 😡

Not even on the cash portion of the ticket. Nothing. Nada.

Okay BUT… Let me walk back here just a tad.

This new option does create opportunities for those travelers who might only have a few thousand points in their accounts and otherwise wouldn’t be able to redeem them at all.

But honestly, I would still wait until you accrue enough points to book an entire award redemption and forego the Cash + Points option altogether.

And speaking of… one way you can get enough points for an entire Southwest redemption is through a little transfer action.

As many of you may know, UR points are the only points that transfer to Southwest. 

This is just ANOTHER reason to take advantage of the limited-time 75,000-point welcome offer on the [[ chase-sapphire-preferred-card.name ]].

And maybe you don’t want to (and probably shouldn’t) move all 75k points over to Southwest at once, but let me tell you…

Moving a few thousand points over to make an excellent award redemption will give you SO MUCH MORE VALUE than using Southwest’s new Cash + Points option. 😎

✈️ How do you get HOME using miles and points??

I asked for some general feedback and ideas from you all yesterday, and a lot of you wanted to know how the heck you fly home using miles and points—because oftentimes, redemptions going back to the U.S. (or Canada) aren’t great.

And then I realized… yes, you are right. We mainly write about one-way tickets to amazing, far-away destinations because the DD team is often traveling for extended periods of time.

But I do eventually return home, and I have to do that somehow. 🤔

I have some initial thoughts if you are truly only finding horrible redemptions when trying to return home:

1. You are only looking at round-trip award flights.

2. You don’t factor in a day of flexibility with your travel.

I pretty much only ever look at one-way award flights. I rarely (if ever) book round-trip tickets.

Historically, you are more likely to score a better deal (e.g. use fewer points) by searching in this way.

And the key words here are you are more likely to—this doesn’t mean that 100% of the time you will ALWAYS find a better deal.

But in my experience, this is how I search and how I typically book an award flight to work in my favor.

Now… the flexibility topic can be a heated one for many, because if you only have two weeks of PTO a year and very specific dates, that’s a challenge.

And I get it. I used to have a typical “9-5 job” that only allowed for very restrictive travel.

But here’s what I mean by having flexibility. You don’t need to try and change your actual travel dates… just your travel within those dates.

🤨

Let me explain…

Maybe you’re ending your trip in Amsterdam, or maybe you spent the entire two weeks there, but flights back home to Chicago are showing nearly 100,000 points no matter where you look (gag) 👇

But what if… the DAY BEFORE your international flight home, you chose to take a relatively cheap train or cheap flight from Amsterdam to Paris to position yourself for a cheaper and more epic award flight?

Because magically, when you do a one-way search from Paris to Chicago, you’re presented with this 👇

And remember! There are still two 30% transfer bonuses from [[ chase-sapphire-preferred-card.points-program-override.points-currency ]] and [[ american-express-gold-card.points-program-override.points-currency ]] to Virgin Atlantic! So you’d need just 17,000 points or 45,000 points, respectively, for either the economy or business class option.

I realize we’ve been using Virgin a lot lately in our examples (thanks to the current bonuses), but you can make these same changes to your itinerary and do similar searches on any other airline.

🎙️ Catch up on the Daily Drop Podcast

Check out our weekly Daily Drop Podcast, where Mike and Megan give us a deep dive on all things miles and points, credit cards, and more!

And if you’d rather follow along on YouTube, we’ve also got you covered.

Thanks for joining us for another wonderful day in the world of travel! I hope you found today’s newsletter helpful, and with that, I’ll say…

✌️Peace out.

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