Updated: 13/7/2016 to reflect changes that have happened since the article was originally published (18/4/2015! Amazing)
Although general spending cards are great for day-to-day expenditures, it would take a long time (and a lot of spending) to build up sufficient miles for a nice trip just using them alone. The market leader now is 1.4 miles per S$1. So a one-way business class ticket to the USA would take about S$48,500 to earn!
If you want to accelerate your path to award flights, you need to focus on specialised spending cards. Specialised spending cards usually offer fantastic rewards with 1 category of spend (and crappy, crappy rewards in others).
The UOB Preferred Platinum AMEX card offers 4 miles per S$1 of spending in restaurants. That would cut the amount of spending you need for the aforementioned ticket to S$17,000. Obviously, you’re not going to spend that much on dining. But the point is, where your required spending falls on the spectrum between S$17,000 and $42,500 depends on how religiously you discipline yourself to use the right card in the right situation (and of course, leverage sign up bonuses).
Banks split credit card spending into several different categories based on the Merchant Category Code (MCC). The MCC is a code assigned to each merchant which distinguishes what sort of business it does- groceries, restaurants, fuel, department stores etc.
My recommended plan is as follows
|Recommended Card for 4 Miles per S$1||DBS Woman's World Card, HSBC Advance||UOB Preferred Platinum AMEX, HSBC Advance||Citibank Rewards||UOB Preferred Platinum Visa||UOB Visa Signature|
|Fine Print||DBS Woman's caps the 4 miles per S$1 on S$2,000 of online spend per month||N/A||4 miles per S$1 is capped at S$12,000 spend per year||4 miles per S$1 is capped at S$12,000 spend per year||Minimum S$1,000, Maximum S$2,000 spend per statement period, otherwise 0.4miles per S$1. Beware!|
|Also note||If you're buying air tickets or booking hotels (where payment is made in full online), you can also consider the DBS Altitude for 3 miles per S$1||N/A||What is shopping? Any department store, or any place which sells bags, clothes or shoes.||But that said, some people have reported online that the S$12,000 cap doesn't exist in practice||N/A|
As you can see, the cards above are great for use in certain situations but virtually useless for general spend.
Issues with MCCs
My main gripe is the lack of transparency that card issuers have about category spend bonuses. You may think spending with your UOB Preferred Platinum card at a restaurant will get you 4 miles per S$1, but sometimes it turns out that that restaurant is coded as a grocer (Jones the Grocer), or as a bakery (Paris Baguette), or as a hotel (any hotel restaurant) and therefore you get the pathetic 0.8 mile “regular” rate.
Worse still, the onus is on you to reconcile your point balance every month. Because banks don’t give you an itemised split of how your points were earned, ie Transaction A earned me X points, B earned me Y points, you’ll have to manually call up customer service and ask them to do a vouching for you.
There’s no practical way to check MCCs ex-ante. However, the good people at Flyertalk have compiled a list based on their own experiences, which you can refer to here.