When you bought your breakfast this morning, how did you pay for it?
If you used cash or NETS (at a merchant that accepts credit card payment), you need to stop it immediately because you got $0 back in rebates.
If you used a credit card that earned you a 1.5% rebate or 1.2 miles per dollar, it’s marginally better than using cash, but you also need to stop it immediately.
Why?
Banks are handing out generous cash rebates and rewards points for purchases you’re making every day, so you should totally get in on some of them sweet dollar dollar bills. Because who doesn’t like free money?
The most common reason why people don’t consider their credit card strategy is because it all seems too complicated, with all these categories and spending limits and MCC codes.
Well, we’re here to help. At the end of reading this, you should be able to level up your credit card game quite significantly.
Are you Team Cashback or Team Miles?
This choice is not mutually exclusive, but unless you’re spending in excess of $5,000 a month, it would make more sense to consolidate one or the other.
To make an informed decision, we must first establish the value of a mile. (Okay, so we are writing this in the middle of a pandemic-driven travel halt, but Gen Xers here have faith our favourite destinations will be ours to visit again soon enough. And it never hurts to plan ahead.)
Depending on your travel redemption needs, each mile can be worth somewhere between 1.5 and 6.6 cents.
For example, a return saver award of Singapore Airlines from Singapore to New York on Suites would require 264,000 miles. At a revenue rate of $17,500, it would be valued at 6.6 cents a mile.
On the lower end of the redemption scale, a $230 economy return award to Bali redeemed at 15,000 miles is worth about 1.5 cents a mile.
As a general rule, business and first class Trans-Pacific tickets would present the best value for miles earners. So if you’re planning to fly your large family on economy to Bali for a weekend, you might be better off gunning for cashback.
Team Cashback:
The obvious benefit of using a cashback card is that you’re getting a rebate for every dollar you spend, which is cash right back in your wallet within a month.
However, the drawback is that most cashback cards with high rebates are typically designed to have rigid spending requirements of hitting a minimum spend and staying within the spending caps.
In order of preference, these are my favourite cashback cards that hit that sweet spot between value and flexibility.
1. Maybank Family and Friends:
8% rebate on groceries, dining, transport and petrol, telcos and selected retail stores
Requirement: Minimum spend of $800 in any category, capping out at $1,000 per month
Maybank tops my list of favourite cashback cards with a generous 8% rebate on essential spend. What I like about this is the flexibility to spend all $800 on any category, which makes it easy to hit the minimum spend with a last minute grocery run or dinner with the family.
2. Citibank Citi Cashback:
8% rebate on groceries, dining, and petrol
Requirement: Minimum spend of $888, with each category capping out at $300 per month
Citibank offers a similarly generous 8% rebate but the requirements are more rigid, making it necessary to spend almost exactly $300 per category each month. This card would be great for most families with a car, but the need to keep a close eye on spending limits is a bit of a hassle.
3. UOB One:
5% rebate on all spend
Requirement: Minimum spend of $2,000 per month (with exclusions)
While UOB’s best cashback card offers only a 5% rebate, this is a solid card to have in your arsenal because it comes in very handy for spending that isn’t covered by the other cards, such as the occasional medical bill, car repair, and utilities.
4a. CIMB Visa Signature:
10% rebate on groceries, beauty and wellness, online shopping, pet shops and services, and cruises
Requirement: Minimum spend of $888, with each category capping out at $200 per month
4b: CIMB Platinum Mastercard:
10% rebate on dining, transport and petrol, travel in foreign currency, health and medical, selected electronic and furnishing retail
Requirement: Minimum spend of $888, with each category capping out at $200 per month
CIMB’s aggressive 10% rebate on both cards is attractive, but the spending limits are prohibitively strict, with the categories that are rather obscure. It would be perfect if the categories for both cards could be combined into one card, but as it stands, the average person would have difficulty spending $200 on categories like cruises and foreign currency every month.
5. DBS Live Fresh:
5% rebate on Online and Contactless transactions
Requirement: Minimum spend of $600 per month, with each category capping out at $400 per month
The 5% rebate on online and contactless spend is decent but this works only if you are able to spend between $200-$400 per category and hit the total minimum spend of $600.
Team Miles:
Miles credit cards are less restrictive in minimum spend requirements, but you’ll naturally be playing the long game in accumulating enough miles for redemption. There are also considerations like the ability to pool points across different cards; miles transfer fees, point expiry, and finding redemption sweet spots like the Spontaneous Escapes promotions.
With that in mind, here are the five best credit cards for miles chasers.
1. UOB Preferred Platinum Visa:
4 miles per dollar on online and mobile payments (Apple Pay, Google Pay, Samsung Pay)
Requirement: No minimum spend but a cap of $1,110 per month, minimum earning blocks of $5
UOB has nailed it with an excellent card that gives you 4mpd (miles per dollar) for all spend using mobile payment. As long as you’re able to whip out your phone for payment via a contactless terminal (usual exclusions like government services & education), you’re guaranteed the rewards points. The only snag is that UOB rounds down the total spend to a minimum block of $5, so that $4.95 salad for lunch will unfortunately get you zero miles.
2. HSBC Revolution:
4 miles per dollar on online and contactless payments
Requirement: No minimum spend but a cap of $1,000 per month, minimum earning blocks of $1
The HSBC Revolution is a good backup for general spend via contactless terminals if you regularly hit your cap for the UOB Preferred Platinum. There are more excluded categories, but on the bright side, a minimum earning block of $1 makes it a good option for small purchases like that kopi-c on the way to work.
3. UOB Lady’s Solitaire:
4 miles per dollar on 2 categories (beauty and wellness, dining, entertainment, family, fashion, transport, travel)
Requirement: No minimum spend but a cap of $3,000 per month, minimum earning blocks of $5
I’ve always maintained that being a woman is advantageous, and it’s clear that UOB agrees. The Lady’s Solitaire, which is only available for women (sorry guys!), has a very generous cap of $3,000 per month. Select two categories every quarter—I recommend dining and transport—with the possibility of a swap to travel where required.
4. DBS Woman’s World:
4 miles per dollar on online transactions
Requirement: No minimum spend but a cap of $2,000 per month, minimum earning blocks of $5
While marketed as a card for ladies, here’s a secret: men can get it too, and they should. This covers online purchases on merchants like Amazon, Lazada, Shopee and Taobao. It’s also a fantastic option for online travel bookings, Grab rides and entertainment subscriptions.
5. Citibank Rewards:
4 miles per dollar on Online and Offline retail transactions (except travel)
Requirement: No minimum spend but a cap of $1,000 per month, minimum earning blocks of $1
The last card you should have to round up your credit card game is the Citibank Rewards, which takes care of your online and in-store retail purchases. Whether you’re picking up some new clothes at Zara or make up at Sephora, this card will give you 4mpd for all your shopping needs.
Summary:
Regardless of whether you prefer to have cash back immediately or have more aspirational travel plans, knowing which card to use for different purchases is the key to getting the most back for every dollar you spend.
Say you’re the kind of person who puts your entire monthly expenditure on a general spend card that gives you 1.2 mpd across the board on all spend because of convenience.
Just making a small adjustment of using a different card that gives you 4 mpd would mean that in the time you’d normally take to earn enough points for an economy ticket for a ski trip to Zurich, you could be sipping a Taittinger Comtes de Champagne Blanc de Blancs in Suites instead.
And I’ve never known anyone to turn down a triple upgrade to the most luxurious flying experience ever.
