Southwest Raises Card Fees While Cutting Perks…
Southwest has announced (as of July 24, 2025) substantial annual fee hikes across its entire suite of Rapid Rewards credit cards, ranging from roughly 43% to 54% increases. For example, the Premier card moves from $99 to $149, while the Priority card jumps from $149 to $229, and the Performance Business card from $199 to $299 annually.
These increases accompany newly introduced perks: free checked bags for the cardholder plus up to eight companions, standard or preferred seat selection even on basic fares (once assigned seating begins), priority boarding access, and extra‑legroom seat upgrades for holders of higher‑tier cards.
Southwest has hiked the annual fees across its entire credit card lineup:
Rapid Rewards Plus: $69 → $99
Rapid Rewards Premier: $99 → $149
Rapid Rewards Priority: $149 → $229
Premier Business: $99 → $149
Performance Business: $199 → $299
That’s a 40–50% jump in fees—without a matching increase in real value.
But Does This Really Replace What Was Lost?
These “new” card benefits are themselves largely a reaction to Southwest’s earlier removal of its hallmark perks: free checked bags for everyone and open, first‑come, first‑served seating. Those once‑defining features have been eliminated for most flyers: as of May 28, 2025, only some loyalty or fare categories still include bag perks, and the beloved open seating system will be replaced by assigned seats beginning January 27, 2026.
Southwest is our go-to for interisland flights.
In other words, the cards are increasingly designed not to provide extra value, but merely to restore what the airline already removed at a higher cost.
A Business Model in Transformation—At Customer Expense
Southwest’s revamp reflects a broader strategy shift driven by activist investor pressures: introducing bag fees, basic economy fares, assigned seating, and share buybacks. Loyalty and credit cards now serve as the linchpin of a new, revenue‑focused business model rather than delivering exceptional value to travelers.
The refresh of the credit cards aligns neatly with this: new perks are tailored to the new revenue streams: bag fees, paid seat selection, boarding upgrades, rather than enhancing overall traveler experience.
Why Caution Is Warranted
Higher fees, less freedom: As Southwest sheds its distinctive free baggage and open seating model, consumers now must pay more just to maintain those benefits—if they’re eligible at all.
Locked‑in loyalty: The cards are clearly designed to favor those tied to Southwest’s Rapid Rewards ecosystem, but if you're following a philosophy of earning transferable points and avoiding brand‑locked programs, this refresh is unappealing—even more so given the fee increases.
More complications, same cost: With tiered fare classes, declining complimentary services, and added complexity (seat types, boarding groups, fees), the experience now resembles other legacy carriers, yet comes with fewer original strengths.
Our Take at Hawaii Reward Travel:
Southwest has long been our go-to for interisland flights, thanks to their simple pricing, point transfer options, and two free checked bags. And while a lot of those benefits are disappearing on mainland and international routes, they’ve thrown Hawaiʻi a small bone:
They’re continuing to honor two free checked bags for kamaʻāina on interisland flights.
But let’s not get distracted, this card refresh is clearly part of a bigger pivot away from the customer-first model that many of us in Hawaiʻi appreciated.
The value proposition is no longer about simplicity, but upselling. And that’s a tough pill to swallow when:
We’re seeing higher fees
Benefits are getting carved up by fare class
And there’s still no clear interisland companion pass option
At Hawaii Reward Travel, our philosophy has always been this:
Don’t get locked into a single airline’s loyalty program, especially when that program is shifting under your feet.
That’s why we focus on earning transferable point currencies that let you book with a variety of airlines, not just one that's constantly moving the goalposts. If you’re a Hawaii-based traveler who values flexibility, real perks, and smarter redemptions, don’t get swept up in this refresh. The better play? Stick with transferable currencies and let the airlines compete for your loyalty.
Mahalo,
Scottie | Hawaii Reward Travel
