Frequent Miler on the Air - The Southwest Debit Card Is Actually Interesting Coffee Break Ep81 12 9 25

Episode Date: January 11, 2026

To our surprise, the Southwest Debit Card is more interesting than we expected! It's been uncommon for debit cards to make waves in points-earning efforts, but this one is proving intriguing. (00:17) - Southwest Debit card is more interesting than we thought! Read more about the Southwest Debit Card here.(00:51) - Some basic details about the Southwest Debit Card(07:09) - Why is this interestingVisit https://frequentmiler.com/subscribe to get updated on in-depth points and miles content like this, and don’t forget to like and follow us on social media.Music Credit – Beach Walk by Unicorn HeadsMentioned in this episode:Check out this month's sponsor and support our showJoin the loyalty program for renters at joinbilt.com/mileshttps://joinbilt.com/miles

This is a Voyescape podcast. You can find all of our travel podcasts from around the world at voyescape.com. Welcome to Freakimilers Coffee Break, where we focus on a single topic related to miles and points. And each coffee break is limited to 20 minutes or less or your money back. Today's coffee break. The Southwest debit card is actually interesting. Who knew that Southwest would come out with a debit card and we would find it interesting. For years, debit cards have not been interesting in the rewards game

because they can't earn a lot in transaction fees the way credit cards can, unless there are sometimes loopholes where they can earn more. And those kind of loopholes have been getting more and more significant as banks have figured out ways to take advantage of them. And I think Southwest has done something that's really worth paying attention to. Yeah, so let's talk about some of the basic details about this debit card, and then we'll get into why we find it pretty interesting. So at first glance, it might not seem wildly exciting because it comes with a small welcome bonus, but it does come with a small welcome bonus more than nothing. $2,500 points after you spend $100 and have two recurring direct deposits in the first 90 days. So, I mean, not a wildly exciting bonus, but something.

It's got a monthly fee, $7 a month, which will be waived if you keep a minimum monthly balance of $2,500. dollars. The earning rates are not terribly exciting. At best, you'll earn 1X and Southwest dining and subscriptions, but subscriptions doesn't include utilities and streaming services. And you get some annual spend bonuses. So if you spend $5,000 or $15,000 a year, you'll get a spending bonus on top that'll work out to earning about one and a half points per dollar if you were spending only in those 1X categories. You get another 50%. so to speak, you'll have to take a look at the details within our post. I should mention, though, that you're limited to $7,500 per day in card purchases. And I mention that because

some people might hear a debit card and think, oh, well, I'll pay taxes and earn a little bit of rewards with a very low fee for using a debit card. And that's true. You can do that, but you won't be able to make a huge tax payment. $7,500 is not a small one necessarily, but it's, it is the cap. Yeah, let me just jump in and say, unless I missed it, I think you, Miss saying that for spend outside of the categories you mentioned, you get half a point per dollar. So for most debit purchases, for example, you'll just get half a point per dollar. But that's pretty typical with debit cards. Yeah, so not terribly rewarding for everywhere else spend at all, but it gives you something anyway.

But speaking of things that it gives you, it also gives you a 20% off promotion code that's awarded annually by January 31st. You have to have the card open by December 31st of the previous year. So if you listen to this episode and you're like, oh, I'm kind of interested in this. You might want to jump on the card before the end of December so that you can get that promotion code in January. And we'll talk more about the promotion code in a bit. Also a $35 statement credit each calendar year for Southwest purchases. So that's kind of nice if you're buying a cheap airfare. You could use that.

Unfortunately, it doesn't work on things like upgraded boarding and in-flight purchases, although upgraded boarding is going away soon anyway, so I don't think that'll make a big difference, but it won't work on in-flight purchases, and that's worth knowing. 7,500 bonus companion pass qualifying points come with this card each year, and that's interesting because it stacks with the companion pass qualifying points that you get as a Southwest credit card holder. Now, to be clear, these are not redeemable points. It's basically a shortcut to the companion pass.

So if you have the debit card, you need 7,500 fewer. points in order to get the companion pass and sort of like a boost to get you part of the way there. And if you have one of the Southwest credit cards, you also get a 10,000 point boost. So if you've got both the Southwest credit card and the debit card, that's 17,500 points off of what you need to earn in order to get the companion pass. So that might be interesting. You officially get that bonus within 30 days of opening your card. I don't know how soon that within 30 days is.

So we'll talk more about that probably later, but that might influence when you decide. to try to open this card, depending on whether you want the companion pass qualifying points to post sooner or later. In practice, they seem to post faster from what we've heard. Katie's travel tricks says five days after opening the card. So we'll talk about what that means for strategy in a few minutes. But all right, so half a point per dollar spent on most purchases, one point in a few bonus categories. Why is this interesting, Greg? Yeah. I mean, the big eye-opening thing is the fact that all points earned on this card are companion pass eligible, plus it gives you that 7,500 point companion pass boost. So if you're actively going after a companion pass, I mean, this is an almost

free way of getting at least 7,500 points, but also, you know, if you consider that the debit card spend also earns companion pass qualifying points and that they have a bonus at $15,000 spend of 7,500 points that it means that even if you're earning, you know, even though you're earning half a point per dollar for debit purchases, thanks to that big spend bonus, if you spend exactly $15,000 a year, it'll actually become a 1x spent on spend in the number of points you earn that are both redeemable and companion pass eligible. So to me, this is like a really, really easy way to get at least 22,500 total points towards your companion pass each year.

Yeah. And in the first year, when you open it, the welcome bonus, the intro bonus here, the 2,500 points counts also. So that counts. And it's giving you the 7,500 point kind of jump start. So I think actually what makes this particularly interesting, I think, for a lot of people, is that the traditional path to a companion pass is to open two credit cards in order to earn enough points for a companion pass. And you have to open one consumer and one business card.

But some people aren't comfortable opening business cards or don't think they qualify for business cards. Side note, you just need to be more entrepreneurial. You can probably do it. But if you're firmly against opening up a business credit card, I think this is particularly interesting because it reduces the path. You can get one consumer card. And then with the 22,000, 500 points that Greg just mentioned after 15K spend plus the discount or rather the, you know, shortcut, so to speak, the 7500 points and the welcome bonus. You could get yourself up to a companion pass, I think, with just the credit card and the debit card. You won't necessarily need a consumer credit card rather in the debit card.

You won't necessarily need a business card anymore if you have the capacity to do that level of spend on a debit card. And, you know, if you do, then I think that's kind of interesting. That's not the only reason it's interesting, though. Not at all. If you, I mean, if you fly Southwest a fair bit, especially with a family, the 20% off coupon code can be crazy valuable. Welcome to our first ever homemade host red ad. Built is a loyalty program that famously rewards you for paying rent.

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Now back to the show. You know, imagine booking, you know, once a year booking your family to, you know, expensive trip to Hawaii or to Florida during, you know, holiday season when, when prices are through the roof, I mean, if you could get 20% off that for your whole family's round trip travel, that's really, really significant and, you know, would easily just pay for itself, regardless of whether you're getting the monthly fee waived or not. Yeah, living in the Northeast myself and looking at flights to Florida, during school breaks, it's not uncommon for those flights to be five or $600 a person round

trip. And so if you're, you know, you're booking for a family of four, you're talking about saving $100 a person maybe, maybe even more. That could, that alone, the 20% coupon could be great. And it's interesting because the Southwest credit cards also come with a coupon, but the coupon on the credit card is only 15%. There's a 20% off reward travel booked within 14 days, but there's also a 15% off on paid travel that is not limited to the 14 days. So this is actually a better coupon on the debit card, 20% off instead of 15. So I think that's kind of interesting too. I mean, yeah, the debit card does have a monthly fee if you don't keep the minimum balance in there. So you might look at it and say, well, you know, you do have to pay for this. But I think you could easily

save well over the cost, even if you're paying the monthly fee, that just using that one code each year and the $35 credit towards the Southwest purchase. I mean, the card could pay for itself. So I think that's kind of interesting. Now, what about strategy? Like, when would somebody want to open this card? Like, we always talk about the credit card strategy for a companion pass. We always say you should open your Southwest credit cards between October 1st and the end of the year and wait to meet your spending requirements until early in January so that you can earn all of those companion pass qualifying points early in the year and have a companion pass for the rest of that calendar year and all of the next year. So the goal is always to try to earn a companion pass in January if you can,

because then you'll have effectively two years of companion pass. So how does this debit card play into the strategy? Does it matter when you apply? Should people apply soon? Should they wait? Because of when the points are going to post or the sort of head start towards companion pass? I'm interested if you have a different take on this. But I don't I don't think there's that kind of time-baked situation going on here because you don't get a big influx of points the way you do with the credit card welcome offer. So to me, I think the play is to make sure to sign up before the end of December so that you get that 20% off coupon in January. And because your 7,500 points towards the companion pass is going to apply annually. So,

You know, hopefully you'll get it before the end of the year if you're counting on it for this year. But then you'll also get it next year automatically. Yeah, that's what I would expect to. So when I first saw this, I had that thought that, oh, got to get it at the end of December, because then in January, you know, you have to wait a year until you get those 7,500 companion pass qualifying points again. But that's not how it works. That's not how it works with the credit card anyway. So I assume you're right that the companion pass qualifying.

points just come at the beginning of the year, just like they do on the credit card would be my expectation. So, so yes, I think you're, I think you're totally right. You'll get the 7,500, potentially get the 7500 companion pass qualifying points this year, depending on when you open the card. And then in January, I would assume you'll get those 7,500 towards next year's. So, yeah, I think you're right. The only other part to consider about when you're going to open it is when you're going to meet the requirements if you want the 2,500 points from the welcome bonus to count and or, you know, other points from purchases, then you may want to hold off until closer to the end of December, but you want to do it before December 31st. Otherwise, you're going to be waiting until the

following calendar year in order to get some of those benefits. So you wouldn't want to do that ideally. So overall, though, kind of interesting. So are you going to go after this debit card, Greg? I know you're a big Southwest guy, right? Yeah, I mean, I don't fly Southwest, but sometimes I book travel for family members who do fly Southwest. And I am seriously considering. So, you know, I could sign up for the card and just park $2,500 dollars in there to waive the monthly fee and get that 20% off coupon, which is the main thing I'd be looking for. Or I think I could probably sign up in December get the 20% off. coupon loaded to my account and cancel the card and do that every December. I don't know if that

would work or not. And I also don't know for sure. I don't think there's anything requiring that the account holder be on the ticket that's booked with the discount. But I would have to check that first. I'm not sure about that either. I don't think so either. The interesting thing is, okay, is it worth parking the $2,500 there? I mean, I think it's going to depend probably on your next best option in terms of where you put the money. I just use an APY calculator to see $2,500 and the default interest rate that it gave me was $4.22. I have no idea right now what the general high yield rate is. But if at that assumption that the APY first APY calculator on Google gave me, you earn about $107.75 in interest over the course of the year. So you'd probably

be better off just paying the $7 monthly fee if you would keep that money. parked in a high yield account otherwise. If you wouldn't keep it in a high yield account otherwise, well, then it doesn't make a difference. And if you're going to be spending on the card a bunch in order to meet those spending bonuses and whatnot, well, then probably will make sense for you to have money in there. But anyway, you got to consider that opportunity cost. But overall, yeah, I mean, I think I could see us getting this card for those 20% off

coupons. I got a bunch of Southwest credit to use. I've got a bunch of the old credit that doesn't expire yet. But being able to get a discount and use some of my Southwest credits at the same time, seems like a great stack. So I probably will open this one up myself. Do you think you and your wife will get it? Probably. Why not have a couple of 20% off coupons? I think we could easily save more than the cost of having these, whether you figure that cost in terms of the monthly fee or in the opportunity cost of the interest you're not earning by keeping money in the account either

way. Whether or not we'll make those spending thresholds in order to earn bonus points, I don't know whether we'll bother with that, but I could certainly see where it could be appealing. And maybe I'd consider it because I certainly am interested in a companion pass. And I've been waiting to get under 524. And I think actually today as we record this is my under 524 day. So I've got it in mind. So yeah, maybe. I think it's highly possible.

We'll both get it. There you go. Nick is a, yeah, maybe on two debit cards. Definitely maybe. Don't forget. If you've enjoyed this and you'd like to get on our email list, you want to go to Frequentmyler.com slash subscribe to join our email list, follow us on all the various social media, and check out our frequent mile around the air episodes dropping every Friday.

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