Frequent flyers on Southwest LUV, -0.65% now have a new option when paying for their flights.
Chase JPM, +1.26% and Southwest Airlines on Thursday announced a new credit card, the Southwest Rapid Rewards Priority Credit Card.
This comes in addition to the Southwest Rapid Rewards Plus card and the Southwest Rapid Rewards Premier card.
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The new Priority card has an introductory offer of 65,000 points, compared to the 40,000 the other Chase Southwest cards offer. (Southwest points are worth 1.5 cents each, according to the travel website The Points Guy).
But it also has a higher annual fee: $149, compared to $69 for the Plus card and $99 for the Premier card. Chase and Southwest will face competition from many other travel cards on the market, which increasingly have no annual fee.
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Chase developed the card after Southwest cardholders told the bank they wanted faster boarding and in-flight benefits, Leslie Gillin, Chase’s co-brand cards president, said in a statement.
To that end, the card comes with several perks:
• A $75 annual Southwest travel credit
• 20% back on inflight purchases including drinks, Wi-Fi, messages and movies
• Up to four upgraded boardings per year
• 7,500 points on the anniversary of owning the card
It also comes with many of the same features as the Premier credit card:
• Two points per $1 spent on Southwest Airlines and Southwest Rapid Rewards hotel and car rental partners. Those partners include Hertz, Thrifty, Alamo, Radisson, MGM Resorts and Marriott)
• One point per $1 spent on all other purchases
• “Tier” qualifying points, which contribute to A-list and A-list preferred status on Southwest flights
The card has no foreign transaction fees and points don’t expire as long as the account is open.
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Still, these types of travel credit cards can be limiting for travelers who don’t want to fly with just one airline, said Matt Schulz, chief industry analyst at CompareCards.com, a credit card website owned by LendingTree. “There’s now much more of a premium on flexibility,” he said. “People don’t want to work that hard for credit-card rewards.”
There are several, well-regarded travel cards that don’t require customers to redeem their points at certain airlines and their partners, including American Express’s AXP, -0.02% Platinum, Chase’s own Sapphire Reserve and Citi’s C, +0.33% Prestige card. But those cards also come with high annual fees.
Chase and Southwest also have travel “partners” cardholders can book with, broadening their options.
The card also an interest rate of 17.74% to 24.74%. The average rate for all credit cards now is 17.15%, according to personal-finance website Bankrate.
The company is joining several other companies, including Barclays for its Arrival Premier card, that rewards customers for keeping their cards longer. “We’re starting to see more issuers focus on rewarding people for loyalty, which is ultimately a good thing for consumers,” he said.