How I Got The Government To Give Me 60,000 Southwest Points

As a financially independent semi-retired blogger, you probably assume I’m also an ace travel hacker. By all appearances most in the FI blogosphere seem to be.

Well, you’d be wrong. I’ve had a great rewards credit card for many years from US Bank that has done me well.  But until recently I’d been reluctant to dive into the game of opening up cards specifically to bank points.

It sounds silly but I didn’t want the hassle of tracking another card, having another online site and password to keep, and changing all my automatic payments over to a card that I was only going to keep for a while.

So after reading post after post from blogging friends about how they’re killing it in the travel hacking game, I caved.  It was actually a detailed post from Dr. McFrugal that helped push me over the edge. He laid the whole signup process out in a very detailed way, which is exactly what my lazy ass needed. 

When I want to do something but am not totally psyched about it, I need my hand held.  Else I might just keep kicking the can down the alley.

The Choice

The main decision I had to make was what kind of points I wanted, and I didn’t want to overthink it. 

I decided I wanted Southwest points. 

I fly Southwest for almost all of my climbing and cycling adventures these days, mainly because I’m usually hauling a ton of gear.  And Southwest doesn’t charge for bags. 

Not only do other airlines charge for bags, many then charge an extra fee if the bag is a bike.  It’s robbery.  Because Southwest is luggage friendly they’re the best and cheapest option for 90% of my adventures, by far.

And the Chase Southwest Business VISA card gives you 60,000 Southwest points as long as you spend $3,000 in the first 3 months.

Taxes As Leverage

Here’s the key to my strategy.  Regular AF readers know that I purposely underpay my taxes during the year.  It’s much smarter financially to take an interest free loan from Uncle Sam during the year than to give him one.

If you’re someone who gets a big tax refund every year, you should alter your W4 dependents to get more of your money now.  Check out my previous post on the subject to find out how much money you’re actually losing by getting a refund.  You’re missing out on investment gains by not having your money in the market, and you’re money is getting further eroded by inflation.

So for tax year 2018 I owed Uncle Sam about $1,900, and I owed my state another $850. Knowing that I would have these two bills coming due in April I applied for the Southwest card in late February. I had the card in hand by mid March. Then all I did was file my taxes and pay the two bills with the new card.

Boom – $2750 spent in two simple charges right off the bat!

That put me within $250 of the required spending to get the points. Then all it took was a trip or two to Aldi and paying my electric bill and I was done. 

In a little more than a month after getting the card Southwest deposited 60,000 points in my account.

In short, I used my taxes as leverage in two ways. 

• I’m keeping money that I know I’ll owe in taxes to myself for an extra year and investing it.  That way it makes more.  It still blows me away that everyone doesn’t do this.
• When the bills come due for those taxes I then use that money to cover virtually all of the spending requirement to get my signup points on my new credit card.

So Uncle Sam and my state basically “paid for” almost all of my 60,000 Southwest points.

The card has a $99 annual fee which you have to pay up front when opening.  So in the end the 60,000 miles cost $99 plus about $30 in fees to pay my taxes online.  That’s one hell of a deal.  Plus I get 1 Southwest point for every dollar spent, or 2 points per dollar on Southwest purchases.

To avoid paying the $99 annual fee a second time I plan to cancel the card before it’s charged.  I actually plan on doing this every year, so after I cancel this card next March Ill open a new one and pay my 2019 taxes with it. 

The sign up miles must be used before I cancel the card or they will be forfeited, but I shouldn’t have a problem doing that. Correction:  I was told this on the phone by a Chase representative but apparently it’s not true as my trusty blogger buddies have informed me 🙂

I always have outdoor adventures planned, and they will be used.  I didn’t semi-retire early to sit on my ass and watch Netflix.

Your Turn Readers – Have you travel hacked before?  If not why not?