Southwest Airlines has raised the annual fee for its Rapid Rewards Performance Business Card from $199 to $299. The move is part of the carrier’s overall plan to increase the value of its premium credit card products. The increase in the fee is due to additional benefits to be added — including access to extra-legroom seating, priority boarding, and an easier way to earn points for everyday spending. And while some customers may scratch their head at the increase, Southwest is hoping to drive home added value from these added perks, namely for frequent flyers and business travelers hunting for more generous rewards and premium services.
Southwest Airlines has launched a significant update to its credit card offerings, bringing new perks while introducing notable hikes in annual fees. Announced on Thursday, the changes aim to offer cardholders enhanced benefits such as complimentary seat selection, priority boarding, and new ways to earn bonus points on everyday expenses like dining, groceries, and fuel. These modifications are part of a broader strategy to reshape Southwest’s business model and enhance the overall customer experience.
This move comes on the heels of Southwest’s ongoing transformation, which includes scrapping its open seating policy, instituting checked baggage fees, and revamping its Rapid Rewards loyalty program. While some of these changes have received mixed feedback, the airline hopes to offset customer concerns by introducing additional value through its updated credit card benefits. A highlight of the new benefits is that premium cardholders will gain access to Southwest’s new extra-legroom seats when available, within 48 hours of their flight departure, at no extra charge. While these benefits represent an upgrade for frequent flyers, they come with a substantial price increase, with annual fees rising across the board by up to 50%.
Fee Increases and Premium Features: What Cardholders Should Know
The revised credit card portfolio includes substantial increases in annual fees for Southwest’s five card options. For example, the Southwest Rapid Rewards Plus Card, the entry-level option, now comes with a \$99 annual fee, up from \$69. The Southwest Rapid Rewards Performance Business Card experiences a significant increase in its annual fee, rising from \$199 to \$299. These new fees will apply to existing cardholders starting from their 2026 anniversary date.
One of the most popular benefits, free checked luggage, remains intact for all Southwest cardholders. This benefit extends to up to eight passengers on the same reservation, which becomes increasingly valuable now that Southwest has introduced a \$35 fee for the first checked bag. The airline’s decision to charge for checked luggage, after years of offering it free of charge, was a major shift in policy, but the continued offering of this benefit adds an element of value for cardholders.
Additionally, Southwest has revamped its seating policies for various card levels. Holders of the Priority and Performance Business cards can choose standard or preferred seating when booking their flights and will have access to extra-legroom seats, subject to availability, within 48 hours of departure at no additional cost. Premier and Premier Business cardholders can select seats in the same 48-hour window, but access to extra-legroom seating is limited to availability. Plus cardholders can select standard seats, but only within the 48-hour period prior to departure.
Enhanced Earning Opportunities with Focus on Everyday Spending
In addition to changes in benefits, Southwest’s revamped credit card program introduces new earning categories aimed at rewarding everyday purchases rather than just travel-related expenses. The Priority Card now allows cardholders to earn 4 points for every dollar spent on Southwest purchases (an increase from the previous 3 points), as well as 2 points per dollar at restaurants and gas stations, with no limit on the number of points that can be accumulated.
The Premier Card allows cardholders to earn 2 points per dollar on groceries and restaurant purchases, while the Plus Card earns 2 points per dollar at grocery stores and gas stations. This shift in earning categories makes it easier for customers to accumulate Rapid Rewards points through regular purchases, making the program more attractive even for those who don’t fly frequently. This change highlights Southwest’s effort to attract a broader customer base by offering rewards for routine spending.
For new cardholders, Southwest is offering a substantial sign-up bonus of 100,000 Rapid Rewards points if they spend \$4,000 within the first five months of card membership. This bonus serves as an incentive for customers to sign up for Southwest’s cards and begin taking advantage of the revamped earning structure right away.
Strategic Shifts Align with Southwest’s Business Transformation
This credit card overhaul is part of Southwest’s ongoing effort to adapt its business model to changing market conditions and customer preferences. Southwest has already made major changes to its service offerings, including ending its long-time open seating policy and implementing checked baggage fees in May. The airline’s Rapid Rewards program has also been restructured to give members more flexibility in how they earn and redeem points. These shifts reflect Southwest’s strategy to move away from its traditional low-cost, no-frills model and toward a more competitive, premium-oriented business.
The changes to the credit card offerings are in line with this transformation, as the airline seeks to cater to frequent travelers who value added perks like priority boarding, better seating options, and more lucrative rewards for everyday spending. By raising the annual fees and enhancing the benefits, Southwest aims to appeal to a more premium audience while still offering value for casual flyers through its revamped earning structure.
Southwest Airlines has raised the annual fee for its Rapid Rewards Performance Business Card from $199 to $299, reflecting new benefits like extra-legroom seating and expanded earning opportunities. This fee hike is aimed at offering enhanced value for frequent flyers and business travelers.
This credit card refresh is further evidence that Southwest is committed to growing with the industry and along with its customer base. The airline is reacting to a trend in which loyalty programs are giving consumers more benefits and flexibility. It is also following the industry trend to reward customers for more than just travel-related spending. Only time will tell whether or not customers will warm up to the fee hikes in exchange for the value of the new perks, but one thing’s for sure: By virtue of all the extra rewards and benefits it’s bringing to the traveler’s table, it’s clear that Southwest is banking on its credit card lineup to help shape its growth strategy moving forward.
