Original Post
Written by
Edited May 25, 2024
at 06:33 AM
by
Southwest Airlines: $500 eGift Card $430 from Costco.
HERE [costco.com]
Valid Only For Southwest Airlines® Flights
Redeem Online, At Ticket Counter Or Call 1-800-I-FLY-SWA®
Limit of 1 Transaction, with a Maximum of 5 Units Per Membership
Item is Non-Refundable
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Not saying you'll never use these card benefits, but through all my business and personal travels, I've had zero instances of needing any credit card travel benefits. When you account for the immediate 14% savings, the expected value of travel loss is less. So it's a better deal to "gamble" and gain a guaranteed 14% savings vs. the <1% chance of drawing a credit card travel insurance claim, which are pretty limited. You also subtract from the benefit the 14% savings here, further lowering the CC benefit.
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You will be the mercy of Southwest decisions.
You will be the mercy of Southwest decisions.
Very true. This is one of the great reason I don't buy any airline gift cards as I have Chase sapphire reserve anyways to avail all great travel benefits!!!
You will be the mercy of Southwest decisions.
I mean, how often are you drawing those card benefits? Southwest scans your bags and you can track them via the app. So bag loss is pretty rare/corrected quickly.
Not saying you'll never use these card benefits, but through all my business and personal travels, I've had zero instances of needing any credit card travel benefits. When you account for the immediate 14% savings, the expected value of travel loss is less. So it's a better deal to "gamble" and gain a guaranteed 14% savings vs. the <1% chance of drawing a credit card travel insurance claim, which are pretty limited. You also subtract from the benefit the 14% savings here, further lowering the CC benefit.
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$500 @5% yields $25 after 12 months. I can save up to $70 on my flight this year. That method works if savings rates stay high AND you can wait almost 3 years to fly. In addition, I get 2% back from my credit card anyways for this gift card purchase AND your always at the mercy of the airlines!
Buying a $500 gc is an immediate $70 gain if you were planning on flying with them soon. Plus the 2% return on the credit card you used to purchase the gc applies here too for the $430 value.
It would take around 3 years to get the equivalent of $70 gain in a HYSA at 5% if you invest $430.
If you have the Costco Executive Membership, you get 2% back on this purchase, plus the standard credit card reward you get from shopping at Costco.
A high yield savings/money market account may yield 5%. This is 14% savings. So even after a year, this deal is still a 9% better deal than a high yield savings account whose interest rate may go down (or up) anywhere from now until anytime in the future.
Not saying you'll never use these card benefits, but through all my business and personal travels, I've had zero instances of needing any credit card travel benefits. When you account for the immediate 14% savings, the expected value of travel loss is less. So it's a better deal to "gamble" and gain a guaranteed 14% savings vs. the
I don't understand the concern.