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Yesterday I wrote a post explaining whether or not purchasing Southwest points with a bonus is a good idea. Ultimately, even with the bonus you are buying points for more than what you’ll redeem them for. So no, purchasing points is not a good “deal” even with a high bonus.
With that being said, I had a few folks comment on the blog stating that it is a good idea if you like the flexibility of utilizing Southwest points. For those not too familiar with Southwest, if you use Southwest points to book your flight, you have up to 10 minutes prior to the flights departure to cancel with NO PENALTY. The points go back directly into the account they were taken from and that is that. No loss of points, no fees paid – nothing! Of course if you purchase a flight using a credit card, you still aren’t charged any fees, but you get the money back in a voucher that has some restrictions – has to be used (flown) within a year from when the flight was purchased and it is not transferable.
Purchasing Points Could be a Cheaper “Insurance” Policy
If you are one that loves flexibility and like to have an insurance plan on your flights just in case, then purchasing points for slightly more than what they are worth can actually be a cheaper way to insure your flights.
For example, I looked up a random flight from Baltimore to Los Angeles that cost $268. This same flight requires 17,949 points. Assuming you have a zero balance in your Southwest account, this would require you to purchase a total of 18,000 points to redeem for the “free”flight. With this promotion, that will cost you $330, plus the taxes on the flight which was $5.60, for a total of $335.60. That means you are paying an extra $68 to have full flexibility. It also allows you to purchase many flights speculatively if you aren’t 100% sure of your travel plans. And if you are looking to travel during a peak time period, purchasing flights early could be a lot cheaper.
I personally would not pay that premium and for most people would not advise it. But, I know for some it could ultimately save them money in the long run. For those interested, the 50% bonus lasts until May 30, 2016 and is most likely the highest bonus you’ll see from Southwest – you can purchase points here.