Southwest Airlines almost feels unrecognizable in 2025 and will change even more in 2026. But I'm not abandoning it yet. I'm just tweaking my strategy to adapt to the changes and want to help you do the same. Today we'll talk about what's changing in 2025 through 2026 with specific action steps on how to shift your strategy to continue to get better value with Southwest, especially when it comes to trips with points. I'll also go into changes you need to know for the credit cards and what you need to do before 2025 ends. Welcome back to Points for Normal People. I'm Katie and I'm here because I know that travel costs add up, especially for a family. But I believe travel isn't just for the rich. That's why on Points for Normal People I share the tips and tricks that my family has been using for over a decade to help you use your everyday expenses and credit card welcome offers to supercharge your travel points so that you can pay for entire vacations every year. For years, I was proudly loyal to Southwest Airlines. My loyalty probably started due to familiarity. Very early on in my points journey, I latched onto a domestic flight strategy that revolved around perpetually earning companion passes for our family. We earned our first companion pass in 2016 and have loved it. Some years we've flown Southwest every month all year. And while I know that's not a lot compared to a business person, for a family of four it was a lot. And through that time, I gained a lot of appreciation for the high quality of customer service and the genial nature of the employees. Now, the employees are still doing their darndest, and I want to give them a shout out. But on a corporate level, Southwest has lost my trust. I think a lot of people listening already are familiar with the fact that Elliott Investment Management acquired a very big, but still a minority stake in Southwest in June 2024, and has been using that to pressure Southwest to change policies. Now, to be clear, I'm not always opposed to change, but in this case, some of the changes don't even make sense on paper. The biggest example is that Southwest ended the bags fly free policy that they had touted for years as their selling point. In fact, as long as I can remember. As recently as September 2024, the CEO of Southwest said that this would never change. And a few months later it did, due to this pressure from this investment firm. The bags issue set me off, not because it really affects me personally. Personally, we almost always carry on, and if we don't, we don't check more than one to two bags for our family, and I figured this would be covered through a credit card benefit. But what really got to me was the fact that Southwest's own analysts
had run this possibility time and again and decided that while they could garner up to $1.5 billion from baggage fees, that they'd lose $1.8 billion in market share from people who flew the airline just because of this perk. So that's a net loss. So that's when they lost my trust on a corporate level. Because they made a decision that's bad for business and bad for customers, which leads me to be suspect. And yet, I still love deals, and the companion pass remains a great deal. And for me personally, I still have a lot of flight options from our home airports. So it's not like I'm boycotting. But I did double down in my effort to stay in the know and to get the best possible deal on Southwest that I can. That's a long intro into today's topics of what's changing with Southwest and what you should do about it. First, I want to talk about the changes to Southwest in general and how to adjust your strategy to mitigate these changes and keep getting good deals, and then we'll go into specifics for the Southwest credit cards.
The first big change is, of course, the loss of the two free bags when you fly Southwest. Honestly, I find this even more annoying because every flight I've been on since this change, they've been requiring almost everyone in group C to gate check their bags, which just adds more time at the gate. And if you're in group C is really frustrating if you didn't want to check your bag. If they had let people check bags for free in the first place, it wouldn't have come to this. The easiest way to get a free checked bag is to hold one of Southwest's credit cards. There are actually five total credit card options, and they all have the same benefit when it comes to checked bags. If you hold a Southwest credit card and you are on a reservation, you will get a free checked bag, just one for yourself, plus up to eight people on that same reservation. If you're a cardholder and have a companion, your companion isn't technically on your reservation, but they do get the same benefit, a free checked bag. Here's some important tips for this. First of all, if you need multiple checked bags for your group, you need to be booking your family or friends on the same reservation as a cardholder. Previously it didn't really matter if you booked separately, but now it does. Remember that you can use rapid rewards points to book a ticket for anyone. So that might mean you book one way with one person's points and one way with another person's points. But the important thing is to put everyone together on the same reservation with a cardholder if you want everyone to have a free checked bag. When you're checking in and indicating that you have multiple checked bags, you also need to allot one per person. Even if you have eight people on your reservation, you can't select two bags for one person and none for anyone else. You have to assign one bag per person or you'll be charged. And finally, if you're the cardholder, it is essential that your rapid rewards number is correctly listed on your booking. Otherwise, it won't recognize this benefit for you and your party. You don't have to book with your credit card at all to get this benefit. You just have to have the card in your name associated with your rapid rewards number at the time when you take your flight that also has your rapid rewards number attached to it. So if you book while you're a cardholder and then you cancel your card and then take your flight, you won't have a free checked bag anymore. You can also get two free check bags if you book a full package of a Southwest getaway, which combines a flight with either a car rental or hotel or both. If you find a deal, this might make sense, but you can only pay for these with cash, not with points. You also get free check bags if you have A-list, but I'm not really going to dive into A-List benefits in this episode since it is so few of my listeners. Southwest is also dropping its open seating policy and switching to assigned seating. This change takes place in late January 2026. As part of this change, Southwest is also changing up the seating so that the front of the plane will have a few rows with extra legroom, and unfortunately, everyone else in the back is losing an inch or so of legroom. I will talk about how assigned seating will work when it comes to fare classes and credit card benefits throughout this episode. But just note that again, it doesn't start until January 2026. You can already book flights with assigned seats for dates after that, but until January 27th, 2026, Southwest still has the same open seating. There are a few strategy shifts here due to the loss of the open seating policy. One is for families, another is for people traveling with disabilities, and another is for companion pass holders. Previously, because of Southwest's family boarding time, anyone who had at least one child who was six or younger was able to board between A and B groups, which guaranteed that they could find a seat together. Similarly, if you traveled with someone with disabilities, you could pre-board and be able to find a seat that worked for that person and one companion. This will no longer be true. If you're traveling with children under 12, Southwest is saying they will make every effort to seat kids with at least one adult, but they aren't guaranteeing it, and it still could mean that your family ends up separated. If you want to be sure your family is seated together, you will need to either use your credit card benefits to make sure this happens or pay for a fair class that includes assigned seats. I personally do not recommend that you rely on Southwest to make this happen for you. Same goes if you travel with someone with disabilities. For companion pass travel, previously I recommended that you could wait until about two to four weeks before your flight to add your companion. That's because waiting to add your companion makes it easier to reprice your flight if the flight goes down in price. If you
want to sit with your companion, I now recommend that you need to book your ticket and then immediately book your companion in the seat next to you. Southwest doesn't even make this easy, to be honest. You have to make a note of what seat you're booking, and then in your separate companion booking, you have to make sure to select the seat next to it. Yes, this will create an extra step for you if you want to change your flight, if your flight drops in price. You will have to cancel your companion's booking, change your flight, add your seat, rebook your companion, and then select your companion seat. But it's what you need to do if you want to sit together. Throughout the episode, I will go into detail on how to get access to selecting seats. The next big change is the fare categories have changed, and the new policies for the fare categories affect strategies for booking flights. The cheapest fare class is no longer one a get away. It's now called basic, and it has really been downgraded as far as flexibility. You can no longer change a basic fare. If your price drops on your ticket and you want to rebook at the cheaper price, you need to cancel your basic fare and then rebook. If you're booking with points, this is not a big deal because you can get your points back and then you can just go back and rebook with the points again. But if you're booking basic fares with points, I highly recommend that you book one-way instead of round trip. That's because of this new policy. If you have a round trip fare booked in basic and only half of it drops in price, you're forced to cancel the whole reservation if you want to make any changes. So if half has dropped, but the other half has gone up in price, you're out of luck. If you book one-way tickets, you'll have more flexibility to adapt and to cancel and rebook if prices drop. If you aren't booking with points, but with cash, basic fare is so bad it's almost never worth booking. That's because if you have to make any cancellations, you get a flight credit that is only good for six months from when you booked the ticket. So you might not even be able to use that flight credit to rebook a flight the same day as your original flight if you had booked that more than six months in advance. The only time I think you could consider booking a basic fare with cash would be if you are 100% sure, or maybe 95% sure, that you're going to take the flight and you really don't think the flight will drop in price. Now the next fair class up is now called Choice. The Choice Fair Class does allow for changes to be made, so you're able to change just one half of a ticket if the price goes down, or you just need to change the schedule. If you book with cash, it gives you flight credits that expire one year after you originally booked. So that doubles the length of time over the basic fare. Your flight credits are also transferable, so even if you can't use it, you could transfer it to a family member or a friend who could use it. It also lets you do free same-day changes or same-day standby if it's available. So all of that is a lot more flexible than the basic fares. And then the last thing that really sets it apart from basic is that the choice fare allows you to select your seat for free. Whereas the basic fare just assigns you a seat at check-in. Now I'll talk about credit card benefits that also give this ability later, but with choice you are able to select a standard seat, which is basically the seats in the back half of the plane. But you do get to select them in advance. And if you book choice and also have a companion, when you go ahead and add your companion to the booking, you'll also get the ability to select a seat for them as well. Again, to review, I only generally recommend booking basic if you're using points. Even with points, you might choose to book choice for the added flexibility and the ability to choose seats. If you're booking with cash, I highly recommend booking choice over basic. And then if you're booking basic with points, I'd recommend booking one-way tickets so that you can easily cancel and rebook if prices drop either direction for you. Related to those changes with flight credits now having an expiration date, it no longer makes sense to convert love vouchers into flight credits like I used to recommend. That isn't a way to extend the expiration date. Now, the one reason you might choose to do this is if you convert it to a travel credit, you could use it to pay for taxes and fees, like if you're flying internationally where taxes and fees might be a $100 round trip. So in that case, it could still make sense. But it doesn't help extend the expiration date. We are seeing though that agents have been willing to extend a love voucher expiration date by six months if you call to ask. If you have a flight credit expiring, there are a few exceptions for a loophole, and I will explain them here. If you're watching via video, you might be confused for a minute since I'm wearing different clothes all of a sudden.
So I actually recorded this whole episode and then found out and tested some more of these loopholes and then wanted to make sure that this episode was as complete as possible. First, if you have booked a basic fare with cash and you need to make a cancellation, this is tricky, as I have stated, because the flight credit you get is only valid for six months from when you booked it, not from when you cancel it. But Southwest will allow you to upgrade to a choice fare to make a change. Then you can cancel that choice flight and your flight credits will be valid for 12 months instead of six. This still isn't ideal as you'll be putting more money in to get the choice fare, and then your credits still expire after a year, but it still might help some people. You have to do this by changing your basic fare to choice before canceling. If you cancel a basic fare, you'll be stuck with a six-month expiration date. So I ran some tests this weekend to confirm that process. But if that happens, if you have a six-month expiration date, there are still two more loopholes that you can try. The first is due to some fine print about how you get travel credits if you use a gift card and book a choice preferred fare. I don't think this loophole is intended to work this way, but it is currently working like this. The policy is that if you book a choice preferred fare with a gift card and you cancel the flight, you get a flight credit that doesn't expire. Now, this is just for the choice preferred fare, which is the third most expensive fare class, and only if you're booking with a gift card. But people have found a way to use this policy to extend a flight credit indefinitely. Hat tip to my friend Beth from the Family Travels on this. So this could end at any time, but right now it's working. If you have a flight credit that is expiring, what you can do is use that flight credit to book a new flight. Specifically, you need to book the choice preferred fare class. Then you can pay the remainder with a Southwest gift card. It can be as little as $1 with the gift card. Then, when you go to cancel that new choice preferred flight, what we're seeing is that you will receive a new flight credit that has no expiration date. So this is happening because it's taking the more generous gift card flight credit policy and overriding the original expiration of the flight credits. Now, this might stick around long term, just like we used to have some loopholes that existed for love vouchers, or it might disappear with an IT update. But either way, I wanted to let you know the full story here. I did test this myself as well over the weekend and confirm that it is still working. And then the last loophole takes more luck, but I think it will be around long term. Now I haven't been able to test this last one myself, but it is clearly laid out in the terms. Earlier in season two, we talked about the schedule change trick for Southwest. And this still exists. I'll link the episode in the show notes if you want to review. This is basically booking a cheap flight and hoping that Southwest changes flight schedules on you. Because if they do, they allow you to change to any flight within 14 days. And so you can change to an expensive flight. This trick is still alive and well. But when I was reviewing the terms, I saw that if you have booked a flight and Southwest changes the schedule, you have one other option besides changing your flight within 14 days. If you've booked with a flight credit, you can ask to cancel your flight and you will be given a flight credit that is valid for five years. Now, it's hard to predict when Southwest is going to have schedule changes, but if I had a flight credit that was expiring and I couldn't find a way to use it, personally, I would book a flight with a couple connections for a date close to my expiration date for the amount of my voucher and just hope for a schedule change. And if I got one, I would request the cancellation and then the five-year flight credit. I will link to these terms in the show notes if you want to read them for yourself. There are also a few positive changes we're seeing, like Southwest is trying to partner with more international airlines like Iceland Air. As of now, you can't redeem rapid rewards points for flights on Iceland Air, but we're hoping to see this roll out eventually. Southwest has also been adding some new routes. Most recently, they said they're adding routes to Anchorage, Alaska in 2026. So it's not all bad. And I know even the assigned seating is a relief to some people. Honestly, the assigned seating is a relief to me because my kids are teenagers
and I want to be sure that I sit with them. Southwest is also adding free Wi-Fi to flights, but I'm honestly pretty skeptical of the utility of this because I often pay for Wi-Fi to work on flights, and it's been spotty at best. Now, with everyone having the ability to use it, it seems like it might just get worse. Maybe they'll get better equipment, I don't know. I'm going to move on to talking about changes to the Southwest credit cards. Because all of these cards adapted their benefits to the changing landscape within Southwest. My absolute least favorite part of the card changes is that I think the marketing of the cards is very disingenuous in one way. That's because all of these cards raise their annual fee. And then they're all claiming that they raise their annual fee because they're adding all these new benefits. But the fact is that the only reason they're adding these benefits is because Southwest took away these same things from customers. You will not immediately have to pay the higher annual fees. If you have a card renewal before January 1st, 2026, you're lucky. That's because your card will renew one more time at the annual fee you currently have, which means you get an additional year at a lower annual fee. Starting in 2026, the change to benefits and annual fees means that some people will want to evaluate which card they have, if they want to change to a new card, or if they want to cancel. To make this easier, we've added card benefit calculators for all of the Southwest cards to our Southwest card guide on my blog, which is linked in the show notes, so that you can go through really quickly and do it yourself. But I'm still going to go through the highlights here. I'm not going to run through every benefit on every card because that's a bit tedious and hard to track. If you want every single detail, head to my Southwest card guide on my blog. That's what that detailed article is for. All of the cards have the same checked bag benefit. So you get your first checked bag free for up to eight people traveling on the same reservation. And again, this also extends to your companion. I used to think that the Southwest Rapid Rewards Priority Credit Card was a great value overall and a great keeper card. It used to have a $149 annual fee, but that's now been increased to $229. But I think the worst change here is that it used to have a $75 Southwest.com credit each card member year, and that benefit is being discontinued in 2026. This was a key part that made the value proposition good on this card. And I was pretty surprised to see them end that benefit and then also raise the annual fee by $70. So it feels like almost a $150 loss to the consumer. The way they're justifying this fee increase is through the benefits you get on this card for picking seats. If you hold this card, you'll be able to pick standard or preferred seats at booking for free for yourself and up to eight people on your reservation. You'd also get to pick a seat for your companion. Preferred seats are regular seats just closer to the front. This is a great benefit, obviously, but you're paying $229 a year for it. But if you have this benefit and you're booking with points, you can definitely book those cheap basic fares and you'll still be able to pick a seat for everyone on your reservation. Now, personally, this is the card that we're keeping, but I'm not happy about it because the annual fee hike really annoys me. And I don't like benefits that I can't put a straight value on. But I'm picking this one because I don't want to have to worry about getting seats together, and I like to be able to book the cheapest flights, and I'd rather pay the $229 fee to make our life easier. This card also gives you the ability to upgrade to the extra legroom seats 48 hours before departure, if those are available. It's hard to say if those will be booked in advance, so it's too soon to know if this benefit is actually valuable. The lower annual fee personal cards are the Southwest Rapid Rewards Premier Credit Card and the Southwest Rapid Rewards Plus credit card. If you use the card benefit calculators on our sites, you'll find that the cards are somewhat similar in the cost-benefit analysis. I think the Premier, which has a $149 annual fee now, comes out slightly ahead due to the extra value of the anniversary points that you get. In an odd twist, these lower annual fee cards are now getting annual promo codes. The Premier is getting a 15% promo code, and the Plus is getting a 10% promo code. These codes can't be used on basic fares. I just think it's odd that the highest annual fee card, the priority card, doesn't have any comparable benefit here. And these promo codes can actually be pretty valuable. They apply for all tickets on your reservation, and in a lot of instances, they're for even more than 10 to 15%. I've had people show me times when they're giving up to a 30% discount when they apply these codes. For a high-priced itinerary, that can be a huge savings. But what these lower annual fee cards lack is the benefit of picking your seat at the time of booking. They both let you pick some seats 48 hours before your flight
departs. But again, I just don't have a good sense of how many seats are left at that point. Likely it will be fine and it will be easy to find seats for a family at that 48 hours before booking, but on peak travel dates like Thanksgiving or Christmas, it might be harder. You could also choose to book choice fares for peak dates so that you can choose those seats at booking, and other flights that are more off-peak, you could just use those card benefits to choose seats 48 hours before your flight. The business cards also saw a few changes. One that was kind of a niche benefit, but I'm sad to see go is the $500 a year fee credit for points transfers. This benefit would give you a statement credit to help reimburse you for rapid rewards point transfers. And some people were able to use this benefit to earn an extra 2,000 points to help qualify for the companion pass, because the cost of transferring points earned bonus points, and then they were reimbursed for the cost. This benefit had some other practical uses, like I used my benefit to pay for a points transfer for a friend. When her dad passed away, he had some Southwest points in his account, and thanks to the fee credit, I was able to help transfer them to her mom so that her mom could use them. Like the personal cards, the business cards have raised their annual fees. The Southwest Rapid Rewards Premier Business Credit Card pretty closely mirrors the personal card and now has a $149 annual fee, up from $99. It added that 15% promo code and the ability to pick seats 48 hours before departure. The Southwest Rapid Rewards Performance Business Credit Card now has a whopping $299 annual fee. Even back at $249, I felt like it was a stretch. Like the high annual fee priority card, this doesn't have much except the ability to choose seats when you book. And that can be really valuable to some people. And this one still has the highest standard offer of all the Southwest cards, so a lot of people do get it to kickstart their companion pass earnings. So what do all of these changes mean as far as which cards to get and keep? I think a big
change is that if you're trying to reduce your out-of-pocket spending, it might not make sense for both adults in a household to have their own Southwest cards, unless they travel independently from each other a lot. If you always travel as a couple or a family, you really only need one Southwest card, because otherwise most of the benefits become redundant. This is different than before, where the benefits on the cards were different and could stack up. Like you could use upgraded boarding on some trips and early bird check-in on others. That also means most people won't find a use in holding a personal and a business card from Southwest long term. The benefits before would stack up, but again, now they're redundant. I think the only reason for a person to keep both a personal and a business card would be if you think you're going to be maxing out your referrals. As of now, each card can earn five referrals per year for a total of 100,000 points per year. Another loss is that if you have a teenage or college-age kid who travels on their own, you won't be able to confer your card benefits to them. Previously, you could use your early bird check-in or upgraded boarding benefits for other people. But now if you book a ticket for a college kid, they won't get free bags, they won't get your seating benefits. If they are 18 and going to be flying Southwest a few times a year, it might be worth trying to get them their own Southwest card for those perks. As far as what cards to keep, it depends on what's important to you. Again, we've tried to make this an easy calculation with our benefits calculators. Let's talk action steps. First, if you are a Southwest cardholder, make sure you understand your new benefits. Head to my Southwest card guide, find your card, use the calculator, and make sure that's the card you want to keep. If you were already a cardholder before these changes, remember that you won't pay the higher annual fee until your card renews in 2026. So you don't have to decide quite yet. Next, again for Southwest cardholders. There are a number of benefits that are being discontinued at the end of 2025. Make sure you use them before they expire. That includes the credits for early bird check-in and upgraded boarding. Of course, these are being phased out due to the start of assigned seating, but use them this fall and winter before December 31st. If you have the priority card, use your $75 credit. You can even buy a gift card at Southwest.com per the terms. That credit resets when your annual fee hits. So for me, my annual fee hits in mid-November. So you can bet I'm going to be going straight to Southwest.com in December to buy a $75 gift card and use my final credit. In the Southwest card guide, I did add a section with screenshots on how to check if you've used your benefits so you can double check. Chase does not make it super easy to find this out. Next time you book a flight on Southwest, if you haven't already, give yourself some extra time to get through booking and to understand some of the seating changes. If you're booking with points, you're fine to book basic, but with cash, I recommend choice. And note that Southwest has changed the order the fair classes appear, so the cheapest ones are now all the way on the right. My other methods for saving on Southwest flights are still valid, so go back and review that episode earlier in season two if you haven't listened. And then lastly, I do want to mention that we've added some new companion pass resources to my site, including a digital tracker. You can find those in the show notes. Click on the article for the timelines for the companion pass and they're within there. Thanks so much for being with me today, and I look forward to seeing you next time where we will continue to unlock these secrets of travel points together.