The DEBIT Card That Earns POINTS - My Review

In this video, I want to take you through a new debit card that allows you to earn airline miles. This is the Southwest Airlines debit card. The advantage of a debit card is that it requires no credit check to sign up for and there's no risk of you getting into debt using it. So, this is a video where we are going to go through all of the features and I'm going to give you my thoughts on if this is a really good alternative option to earning Southwest Miles through their credit cards and who exactly this debit card is best suited for. Hey, credit warriors. Welcome to the show. My name is Ben Hedges, aka the credit shifu. And on this channel, I cover US credit cards, personal finance, and travel hacking. If you like the sound of that, please subscribe. But let's get into the video. So, Southwest just came out with this debit card, which is issued by Sunrise Bank and runs on the Visa network. It gives you the chance to earn Southwest points on your spending, although with smaller multipliers and a smaller welcome bonus than you would see on a credit card. But yes, there is actually a welcome bonus. I bet you thought there wouldn't be. All right, let's now go through all the features. Starting with that bonus. The welcome bonus is $2,500 points for getting two direct deposits into the checking account linked to the card and spending $100 in the first 90 days. If you look in the small print, those must be recurring deposits. So, I'm guessing they are hoping that you get your monthly income paid into the account. Not sure how strict that's going to be or how they even check that. Okay. I'm guessing they think that those two deposits must be from the same uh you know vendor or whatever. I they don't say that, but the fact that they say recurring makes me think that. Probably best to do it that way. Uh you know, switch your paycheck to being paid into that card into that account uh for the first 90 days. The points guy values Southwest points at 1.4 cents per point. So, if we use that valuation, that gives us $35 in value for the bonus, which would be laughable if this was a credit card, but it's not. This is a debit card, and most debit cards offer nothing. So, it's actually not bad. Like, this is literally the definition of the saying, it's better than nothing. Now, let's look at the points that you can earn on the card. So, debit cards have way lower merchant fees than credit cards, okay? That's the fees that are charged to stores and websites when you buy things. and thus you can expect the points earning multipliers to be lower. Here's what the card offers. One point per dollar on Southwest Airlines purchases, dining, and subscriptions like cable, internet, phone, streaming, utilities, and insurance premiums. Then one point for every $2 spent on everything else. And that one point for every $2 spent sounds bad, but remember this is a debit card. Anything better than zero is pretty good. Let's now look at some of the other benefits of the card because it isn't just about earning points on your spending. There are actually a few other perks, too. There is an anniversary spend bonus of up to 7,500 points depending on how much money you spend on the card in a year. There is a table of the amounts here. So, if you spend over $5,000 on the card, you get 2,500 points. If you spend over 10,000 on the card, you get 5,000 points. And if you spend over $15,000 on the card, you get that full 7,500 points. You get that starting at the beginning of the second year of membership based on your previous 12 months spending. Then the next thing is we have a promotion code that gets you 20% off Southwest flights each year. This one is based on calendar year. So it appears in your account by the latest January 31st each year, and you enter it at checkout when you are booking a flight. This code is valid for one year, so if you don't use it, you lose it. Then we have a statement credit of $35 for Southwest Spending. The crazy thing about this one is though that they say that you have to wait up to 140 days to receive it in your account. Like, what is the point? Okay, it's only $35 to begin with. After 140 days, I will have forgotten about it. All right, it's just going to get lost in my account. Like, oh, I paid $35 less this month. Like, what what's that about? I guess you're still getting the value out of it, but it just seems like such a long time that you have to be out of pocket for that you probably won't even feel like you saved any money when you finally get the credit. The next thing is that you can get a companion pass qualifying bonus of 7,500 points in your account. And again, this one is every January 31st. This is in addition to the up to 7,500 points that you can get for a spending bonus. So that's actually 15,000 points up for grabs. This is similar to the Southwest credit cards that offer a 10,000 points bonus every January 31st. And all points, you know, even though they say that that bonus is a companion pass points qualifying bonus, actually all points earned on this card do count towards the companion pass. And that's just like with the Southwest credit cards. The companion pass requires you to earn 135,000 points in a calendar year. And then you get two for one flights for you and the same companion for the rest of that year and the whole of the next year. Then what about fees? Does this debit card charge a fee? Well, surprisingly it does. Okay, it has a $6.99 monthly fee, but you can have it waved if you maintain a monthly average balance of $2,500 in your account. But that is kind of a high requirement. I'd personally prefer to see a minimum direct deposit requirement. Like if you get a direct deposit of $1,000 per month, then you have no fees. So basically, if you get paid your wages into the account, no matter how low or high they are, you're probably going to be good to go. Now, in total though, what do I think about this card? Well, basically, I see it as a good option for someone who isn't in a position to apply for a Southwest credit card. The Southwest credit cards are issued by Chase, and Chase typically likes to see a year of credit history. So, you can't get one of their cards if you're straight out the gate. You need to build credit with starter cards first. So, maybe for a student or an 18-year-old in their first job or someone who can't get credit cards anymore because of bankruptcy, it could make sense. Also, if you have a lot of spending in a category that would charge you a fee to use a credit card, but not a debit card, like maybe some utility companies or you've got school fees that you're able to pay with a debit card, for example. it could be worth it to get this card just so that you can get extra points on spending that you are forced to put on a debit card instead of a credit card. But a lot of the benefits that you get on Southwest credit cards like early boarding and things like that will not be present on this debit card. Not to mention the Southwest credit cards offer massive bonuses. Like right now all of the personal Southwest cards are offering 85,000 points welcome bonuses. So, it isn't really a substitute for the Southwest credit cards, but something that you could consider in some situations. All right, guys. That is the video for today. Please subscribe if you're new, and we'll see you in the next one. Bye-bye.