Category Archives: Credit Cards

ANZ points to be converted to DBS points

It was announced in October 2016 that ANZ would be ceasing its consumer banking operations in Singapore and transferring its assets to DBS.

At the time, I mentioned that you might consider cashing out your ANZ Travel $, given that we didn’t know what would happen with the bank’s credit card program post the merger. I myself cashed out 10K of my ~13K ANZ Travel $, assuming that ANZ would eventually ask all cardmembers to convert their points by a certain date or lose them. I took the remainder 3K as a write off.

Well, perhaps I didn’t have to do anything, because the following notice has popped up on ANZ’s website.

In case you can’t read that, it says

Important Notice
Your unused Rewards Points will be transferred to DBS for future usage if you choose not to redeem via the ANZ Rewards Programme before the latest dates specified below:

  • 19 June 2017: For Redemption of KrisFlyer Miles or Cash Credits
  • 06 June 2017: For Redemption of all other Rewards including Travel Cash

You will receive more information prior to the transfer to DBS, or if you require immediate assistance, please call 1800 269 2269 or +65 6269 2269 (overseas).

No further information is given about the mechanics of the transfer (what does it mean for customers who don’t have DBS cards?) or the ratio (1 DBS point to 2 Travel $ would be the “fair” amount).

The lack of a ratio does worry me slightly, Because think about it from a business point of view- Travel $ are a liability on the balance sheet of ANZ. ANZ got the benefit of merchant fees etc when customers used their ANZ cards to pay for things. ANZ then incurred a liability in the form of the Travel $, which represent a commitment to deliver miles to the customer at some future point in time (and to incur an expense buying the miles from SQ/CX).

DBS is now taking over ANZ, and assuming those liabilities on their balance sheet by converting Travel $ to DBS points. But DBS didn’t get the benefit of those ANZ customers spending money on their cards (well, ok in some abstract way they did, because when they paid for ANZ I imagine that got priced in). So will they be willing to assume the liability at the full rate? Or will this be an opportunity for a devaluation in the transfer process?

For the record, I don’t think DBS will pull a dick move or anything (because that would be a super dick move), but I’d rather they come out and clarify this sooner rather than later. Whatever the case, I certainly hope they announce more details before 19 June, because this will let people decide whether they want to cash out their Travel$ or let them be converted to DBS points.

(HT: The Shutterwhale)

What do you make of the new Standard Chartered Visa Infinite sign up offer?

I received a nice glossy mailer from Standard Chartered (getting snail mail makes me feel alive) advertising a new sign up offer for their Visa Infinite card.

Image result for standard chartered visa infinite

For successful applications approved before 17 June 2017, SCB is offering a choice of two promotions (T&C here)-

  • 86,000 miles with S$12,000 spending within 60 days of approval OR
  • 66,000 miles + 28 inch Samsonite bag with S$12,000 spending within 60 days of approval

The 35,000 mile welcome gift was always available with the payment of the $588.50 annual fee (SCB used to disclose the annual fee before GST but now includes it, as per their obligations under the income tax act. Sorry, but this always bugged the accountant in me), and the 36,000 base miles would have been yours anyway had you spent $12,000 overseas under the regular T&C of the card. Therefore, the real carrot they’re offering is the 15,000 miles you get when you spend S$12,000 within 60 days of approval.

I’ll have a fair amount of overseas spending on my upcoming RTW trip, and gave some serious thought as to whether I could make this work.

If I were to bring along my UOB Visa Signature card for my overseas spending, I’d be able to get 4 mpd on $2,000 a statement cycle for the 2 cycles I’ll be overseas for. That’s a total of 16,000 miles.

Assuming I spent the other $8,000 on my UOB PRVI Miles at 2.4 mpd, I’d end up with a total of 16,000 + 2.4 * 8,000=35,200 miles for $12,000 of overseas spending.

If I went with the SCB Visa Infinite, I’d end up with 86,000 miles but would be out of pocket $588.50 for the annual fee. So conceptually speaking, I’d be paying $588.50 for the ability to acquire 50,800 more miles than my best alternative. This is about 1.16 cpm, a fairly decent amount.

My actual outlay would be less than $588.50, however, given that SCB is running a rebate promotion with Uber until 30 Sept 2017 that gives you 20% cashback on your Uber (Eats + regular Uber) spending each month, up to $50. You need to spend at least $600 a month on your SCB card to qualify.

After this promotion ends, the SCB VI card still offers 10% cashback on Uber spending capped at $100 a calendar quarter and $400 a year.

I use Uber a lot for work, so assuming I could max out this promotion, I’d get $50*5 (May-Sept, 20% rebate promotion)+ $100 (Oct-Dec, 10% rebate regular) + $100 (Jan-Mar, 10% regular rebate) and a bit more for April to May before my annual fee is due again. That’s about $450 in value, which sounds so generous I’m starting to think I’ve not done this calculation properly*.  And I’d need to spend upwards of $3,250 on Uber in under a year. Which means I’d need to order dinner for quite a few people in the office…

*The T&C of the 20% Uber rebate promotion doesn’t specify how it interacts with the usual 10% rebate granted to the SCB VI card, but I think it’s safe to assume they don’t stack. Likewise, I’m not sure if the bonus cashback earned on the 20% promotion will count towards the $400 annual cap on the SCB VI. 

But assuming it does, and I max out at $400, that’s an actual outlay of just below $200 which makes the card more palatable.

Benefits of the SCB Visa Infinite Card

I’ve written about the perks of the Standard Chartered Visa Infinite before here, but I believe some additional benefits have been added since then. To recap, you get

  • 1.4 mpd for local spending and 3 mpd for overseas spending, provided you spend a minimum of S$2,000 in a statement cycle. If you don’t, you get 1 mpd for both
  • 6 free lounge visits a year via Priority Pass
  • A free 4 hour yacht charter for 14 people if you spend $75,000 in a year (worryingly, blackout periods and 20% peak period surcharges apply)
  • The Uber credits I mentioned above

But then I asked Jeriel what he thought and he reminded me of what I’ve told many a person- don’t acquire miles speculatively. Thanks to our good friend the HSBC Advance card, I have a sizable amount of unconverted points with no travel plans in the near future. So the more I think about it, the more I can’t really justify paying the annual fee.

What does this mean for your sign up bonus strategy?

However, if you’ve got upcoming big ticket purchases (and meet the minimum income requirement of $150K per annum) you may want to consider this card. Note that if you spent that $12,000 locally instead of overseas, you’d end up with 35,000 (joining gift) + 15,000 (bonus) + 16,800 (base miles @ 1.4 mpd)= 66,800 miles from $12,588.50 of spend.

What other options do you have?

  • If you’re not already a Citibank credit card holder, you can get the Premiermiles card and spend $10,192.60 (including $192.60 annual fee) within 3 months of obtaining the card to get 42,000 miles
  • You could get the AMEX Rewards card, spend $1,535.50 (including $53.50 annual fee) within 3 months to get 13,333 miles
  • You could get the DBS Altitude Visa card, spend $2,000 ($1,000 a month for 2 months) to get 10,000 miles (for new DBS/POSB cardholders. Existing get 7,000)
  • You could get the Krisflyer Ascend card, spend $6,337.50 (including $337.50 annual fee) in the first 3 months after approval and get 20,000 miles (but please, don’t use the card after that)

This means that in theory, someone with an upcoming spend of ~$31,500 (renovation, wedding, paternity suit) could get just over 170,000 miles if they time their sign up bonuses just right (and were willing to pay a total of $1,172.10 in annual fees).

So I’ll probably not go for this sign up offer, but anyone who has upcoming big spending might want to see if they can build a strategy around this.

ST writer prefers cashback to miles, fluffy kittens everywhere die

In today’s Straits Times there’s an article by Yasmine Yahya entitled “Have air miles will…land you on the wait list

The writer’s thesis statement goes as follows:

Seat redemption can be frustrating, whereas cashback cards can get you free ice cream

She argues that cashback cards are preferable to miles given that snagging award seats is difficult, and waitlisting disrupts your vacation planning. Although she acknowledges that cashback cards give inferior rewards value, her stance is that the convenience and certainty of cashback outweighs the loss.

Image result for not sure if serious fry gif

It’s probably no great plot twist that I disagree, and I’m going to explain why in excessively long detail.

But perhaps let’s start with what she got right

Waitlists are a confusing, opaque and stressful process

My guestwriters and I have written extensively about the pains of the Krisflyer waitlist. There’s no two ways about it- the Krisflyer waitlist is a painful, arduous process. People lose sleep over it. They clog up the reservations hotline with requests for chasers. They do pilgrimages to the ION Orchard service centre in the hope that pleading their case in person will unlock new mercies (it doesn’t).

The writer summarises her problem as such-

My husband and I tend to be able to plan our holidays only about six months in advance, because of our work schedules. But then, the available award seats would have been taken up, and everyone else looking to redeem miles would end up on a wait list, which can take ages to clear.

Online forums are rife with stories from people who say they have had to physically show up at the airline’s ticketing office and cause a scene in order to clear the wait list and secure the seats they wanted to redeem. Many manage to do so just two weeks before departure. That’s a nail-biting wait if you have already booked accommodation, restaurants and tours, which, if you’re a control freak and mega planner like me, you would have done months ago.

And I completely agree. As someone who loves planning things in advance, I find the waitlist to be immensely frustrating because it’s limbo.

I personally feel that SQ has a long way to go in managing customer expectations around the award waitlist. Don’t get me wrong- all things equal I’d rather there be a waitlist than no saver availability at all. And of course I know that award seats will necessarily be scarce because they’re not meant to offer last-seat availability (SQ used to have last-seat availability with the Full award level, but you’d need a ridiculous 315K miles for a one way SIN-SFO business ticket).

However, the inconsistency and lack of heuristics involved in clearing the waitlist generates a lot of unnecessary ill-will. Those who write in get the same stock response from the PR department- that award seats are limited and peak periods will have worse availability than off-peak. Imagine how annoyed they must be when they bite the bullet, buy a revenue ticket and see the seat next to them empty.

When asked by a reporter if SIA or any of its partner banks could do something to address the frustrations so many have faced over this demand-supply imbalance, the airline’s senior vice-president of marketing planning Tan Kai Ping said: “We have inventory set aside for redemptions… When you hear about people not being able to get seats, it’s because everybody wants to go to London on a night flight during the school holidays around Christmas. There’s one flight and one plane but that plane always has no seats.”

I think that means I shouldn’t expect the odds of claiming an award seat to tilt in my favour any time soon.

Is she right? In one sense, yes. Based on the example that Tan Kai Ping gave, I went to look at SQ’s saver award availability for 2 tickets to London around the Christmas period.

Here’s what I found-

Avail= Saver awards are available WL= Saver awards are waitlisted N.A= Saver awards are not available, even for waitlisting. Results shown are for 2X saver tickets

To say that’s far from ideal is an understatement. If you want to maximise your leave by flying out/back as early/late as possible, you’re staring at a whole lot of waitlist. And if you don’t have any status with SQ, good luck to you.

So in that sense I understand the frustration of the writer. It seems like a bit of a bait and switch, like Homer buying all those Itchy and Scratchy dollars at Itchy and Scratchy Land, only to find out that he can’t spend them on anything.

But that’s where my agreement with the writer ends.

I want to discuss some of the pointers and implicit assumptions she made and why I feel she’s mistaken.

Krisflyer miles aren’t just for flying with SQ

Image result for singapore airlines star alliance

First, even if you can’t find SIN-LHR direct flights with SQ, there’s nothing stopping you from getting creative with routings. Maybe you can fly to Manchester, then take a short budget flight to London. Or go to Paris/Zurich/Frankfurt/Munich/anywhere sufficiently close. I get that it shouldn’t have to be that way, but the option still exists.

Second, the writer has completely overlooked an important aspect of frequent flyer programs and alliances- the ability to book partner awards.

Unfortunately, many people will go through their entire lives thinking their Krisflyer miles can only be used for travel with SQ. And who can blame them? SQ’s site does not allow searching for partner award space, nor hint that it’s an option. It buries this deep within the submenus.

If you want to redeem any partner award, be it Star Alliance/Virgin Australia/Virgin America/Virgin Atlantic/Vistara, you need to call up membership services to get it done.

Given that most people won’t be savvy enough to do a check of Star Alliance award space before calling in (although it’s super easy to do via the United or Aeroplan websites), they’ll be guessing at dates, airlines and routes in the dark with a customer service officer who can only search airline by airline, date by date. This is an extremely time consuming and soul sapping process.

But it doesn’t have to be this way. Let’s look again at the example of Singapore to London during the Christmas period. Suppose we really want to fly this route, but need instant confirmation.

If we have Krisflyer miles, we can book a round trip Star Alliance (*A) partner award ticket to London for 90/160/215K miles in economy/business/first respectively (vs 76/170/230K with SQ- that’s right, it’s cheaper to book a *A partner business class ticket than an SQ one post the devaluation)

So let’s look at the Star Alliance availability via Aeroplan (you need to create a free account to search for award space, but you do not need any miles in your balance. You can also try United’s search engine which does not require an account). I ran the same search for 2x award tickets during the Christmas period.

You can see that there are one stop options to London with Air India and Asiana on the 9th outbound, and 1 stop options with Asiana on the 16th return. I get that the layover is a bit longer than most people would care for, but if you have more flexibility…

Then you can do a shorter 1 hour layover in Frankfurt on the outbound flight on the 16th

And similarly short layovers on the flight back to Singapore.

If business/first class is more your thing, you have options too as the search result below shows.

Once you get the flight numbers and dates you want, simply call up SQ membership services and feed this to them over the phone. They’ll issue your ticket and take payment for taxes over the phone.

I need to emphasise that none of this is perfect- some routes involve 2 stops, others 1 with a long layover, others mixed cabin bookings. But if getting there is your most important priority and direct flights with SQ aren’t available, then it’s certainly better to lock in one of these while waiting for the waitlist to clear.

Krisflyer isn’t the only option. What about Asiamiles?

And while we’re at it, why are we pretending like Krisflyer is the only option we have in Singapore? All the banks in Singapore also partner with Asiamiles, and your bank points transfer at the same ratio as Krisflyer. This means we can run the same search with Cathay Pacific and its Oneworld award partners.

Image result for oneworld airlines

I see good availability in CX economy for 2X standard seats (Cathay’s cheapest tier of awards is called standard) to London for departures and returns post 16th December.

Same goes for business class, although post Christmas is a bit tighter.

First Class award space is very limited on these dates, so we won’t go into that.

Remember that Asiamiles don’t just get you CX awards, they also open up Oneworld award space. I’d advise you use the Qantas award engine because it offers maximum flexibility, letting you see a range of dates for a range of cabins. Here’s what December looks like, inbound and out. The different seat colors correspond to different award class space (legend at the top)

Return award space is more patchy, but there are definitely options.

My takeaway here is that if Krisflyer is a dead end, there’s nothing stopping you from getting instantly confirmable award flights through Asiamiles instead. If you’re new to Asiamiles, I recommend you have a read of the intro guide I write a month or so ago– it will get you up to speed on the basics.

So the Krisflyer waitlist is terrible, but with a bit more research you can still get the dates and routes you want.

Miles cards do not earn you miles. They earn you points that can be converted into miles

The next mistake the writer has made is confusing the idea of airline miles and bank points.

With the exception of the cobranded Krisflyer AMEX cards, no credit cards give you Krisflyer miles per se. Instead, you earn points with the bank that can be converted into Krisflyer miles.

For example, when you spend with your DBS Altitude Visa card, every $5 spent locally gives you 3 DBS points, which can be converted into 6 Krisflyer miles. Hence the earning rate of 1.2 miles per dollar.

Similarly, spending on the UOB PRVI Miles card gives you UNI$, spending on the Citibank Premermiles card gives you Premiermiles, spending on the HSBC Advance visa gives you Rewards points.

Why am I highlighting this? Because your bank points don’t have to be converted to miles. If you so wished, you could convert your UNI$ or DBS Points to shopping vouchers and cash rebates, albeit at a poor rate.

I went to pull some examples from the DBS rewards catalogue and put them in an ugly looking spreadsheet.

click to enlarge. 

This table is showing various voucher options from the DBS rewards portal, the denomination and the number of points needed to redeem. It also shows you how much you’d have to spend to earn said voucher, depending on the type of card you use.

I want to draw your attention to the last 2 columns, which show how your effective rebate varies depending on card used. In all likelihood, your rebate will be a blended percentage somewhere in the middle.

If you use just the DBS Altitude and only spend locally, you’ll be earning the equivalent of a ~1% rebate when you convert your DBS points to vouchers. If you use the DBS Woman’s card for your online spending and put a bit of foreign spending on your DBS Altitude, you’ll be closer to the ~3-3.5% rebate in the last column.

I know that cashback cards can offer anywhere between 3-8% rebates in their bonus categories. But I want to point out that these are subject to minimum spends and caps, and therefore you need to take some sort of haircut in considering the value*.

(*the equation will be further complicated when you factor in bank accounts like the UOB One which require you to spend a certain amount on their cashback card to fully max out your interest. I’m not going to delve into this, but I’m sure sharper minds than me can)

Now, I don’t want anyone to think I’m endorsing converting DBS points/UNI$ into shopping vouchers. I’m not. It’s a terrible, terrible idea, considering what alternative value you can get. What I’m trying to say is that by opting for a miles card, you get the best of both worlds- if you end up spending more than you envisioned, you can cash out with miles. If not, you can still get some vouchers for your trouble. I’m even going to go out on a limb and say that if you’re not sure whether you can hit the minimum spend on your cashback card, you might be better off putting the spending on a miles card and cashing out via vouchers than risking earning 0.3% cashback.

It is harder to adopt a “best of breed” strategy with cashback cards because of minimum spend requirements

Image result for credit cards

The writer, to her credit, has already stated she knows that cashback cards give inferior value. But I want to dig a bit deeper into why.

Let’s take the example of someone spending $1,000 a month on credit cards, broken down into 30% on dining, 30% on online (shopping, movie tickets, air tickets etc) and 20% on groceries and 20% on everything else.

Suppose he wants to earn cashback. He chooses the Citibank Dividend card, which promises the following

To earn those rates, he needs to spend a minimum of $888 a month. If he spent anything below that, he’d earn a flat 0.25%.

Because of the minimum spending requirement, it is difficult for this person to optimize his spending, that is, to use the “right” card for each category.

What do I mean? Well, in an ideal world, he’d be using the Citibank Dividends card for groceries and dining (8% cashback), the SCB Singpost Visa for online (7%) cashback, and the AMEX True Cashback card for everything else (1.5%). This allows him to optimize within each category.

But he can’t do this, because he’d need to spend at least $600 a month on his SCB Singpost Visa before he can enjoy the 7% cashback on online spend. And he’s already pledged $888 of his $1,000 monthly spending to the Dividend. Therefore, instead of the “ideal” $64, he’ll end up with something like $41.

The major miles earning cards do not require minimum spend requirements to earn the promised headline miles.

DBS Altitude will give you 1.2 mpd from the first dollar of local spend. Citibank Premiermiles will give you 1.2 mpd from the first dollar. UOB PRVI will give you 1.4 mpd from the first dollar. Even specialised spending cards like the Citibank Rewards and DBS Woman’s World card cap upwards, not downwards. You earn 4 mpd on every $1 spent online with the DBS Woman’s World card, up to a maximum of $2,000 per month. This difference in approach allows you to pick and choose best of breed miles cards for each category.

Once you have to pay an annual fee on a cashback card, you’re back to square minus one

I’ve mentioned this before but it bears repeating-  the only way a cashback card can make sense is if the annual fee is waived.

If you pay an annual fee on a cashback card, you’re starting from a net negative position.

Suppose you pay the $171.20 annual fee on the AMEX True Cashback card. At 1.5% cashback, you’d have to spend $11,413 just to get back to where you started! That’s to say, you only start making a net gain from the 11,414th dollar.

With miles cards, you’re hedged against this. If you spend above a certain amount, your annual fee is waived. If you don’t, you get bonus miles for paying the annual fee. An example is the DBS Altitude which waives your annual fee with a minimum annual spend of $25K, or offers you 10,000 miles for paying the annual fee of $192.60.

Therefore, if you use cashback cards you need to be hypervigilant about annual fees, and either get them waived or cancel the card. Paying annual fees on a cashback card does not make sense.


So when the writer says

“When I use my cashback card at Fairprice at the end of a long week and find out from the cashier auntie that I can take home my tub of Haagen Dazs for free, that is just priceless”

I can’t help but die a little bit inside. Because trading your miles for a tub of Haagen Dazs ice cream is like Esau trading his birthright for a bowl of stew.

I get there are common objections to joining the miles game- I don’t spend enough, it’s too complicated, I’ve been taught from young that nothing beats cash. But the only acceptable objection to me is if you don’t travel at all. And in that case, I’d advise you reach out to your friends to see if you can get some quid pro quo arrangement, because I know a lot of people who would pay a small fee to get to spend more on their miles earning cards.

And trust me, Haagen Dazs tastes better like this

Image result for haagen dazs airline