Tag Archives: 10x

The HSBC Advance card is no more. What now?

I stopped watching pro wrestling around 2001, so my references are going to be extremely dated. But reading the latest mailer from HSBC evoked memories of Kurt Angle turning heel and joining the Invasion.

Image result for kurt angle invasion

The HSBC Advance card had, for many months, been my go-to for all things online and dining. With unlimited 10X points on both categories, my only regret was waiting so long to apply for it. 10X was never meant to be a permanent feature, but every time the expiry date came up it got renewed again and again, leading to some hope this would continue indefinitely.

Well, not anymore. HSBC Advance cardholders will be receiving the following in the mail (thanks very much to William for sending in these copies).

I’m going to give you the broad strokes for those of you who can’t read that (you can click on the images to enlarge them)

(1) Effective 1 June 2017, the HSBC Advance becomes a cashback card earning 3.5% cashback

Yup. One of the best cards in existence is joining the dark side.

After 31 May 2017, you will no longer receive the promotional 10X points on dining and online spending.

From 1 June 2017, the card earns the regular rate of 1X on everything, or 0.4 mpd. (EDIT: 1X points is only till 30 June)

In addition to this, you will also earn cashback at the following rates-

For those of you with a HSBC Advance banking relationship (and I’m guessing you all do, since you need it to get a HSBC Advance card), you’ll earn 3.5% cashback if you spend more than S$2,000 a month, otherwise you’ll earn 2.5%

3.5% cashback on anything isn’t, in and of itself, a bad thing. The best rate for a “general spending” cashback card (that is, a cashback card that offers a flat rate on all spending) is now 1.5%, offered by the SCB Unlimited Cashback and the AMEX True Cashback cards.

Of course, these have no caps, and the HSBC Advance cashback is capped at S$125 per month. A cap of S$125 a month implies that the cashback is maxed out with a monthly spend of S$3,571.

Fortunately, there continues to be no annual fee payable for the HSBC Advance. Because, like I’ve said many times, it makes completely no sense paying an annual fee for a cashback card.

(2) You need to cash out your available HSBC rewards points by 31 Aug 2017 unless you have another HSBC card that also earns rewards points

If you do not have another HSBC credit card that earns rewards points (eg the HSBC Revolution), you will need to convert your HSBC rewards points to miles by 31 Aug 2017. 

There is some time lag involved in the crediting of the 9X bonus points, but whatever hangovers from your May spending will have posted by 1 Aug 2017.

Remember that the conversion rate from points to miles is 5 points= 2 miles, and HSBC points can transfer either to Krisflyer or Asiamiles at the same rate.

(3) If you don’t cash out your rewards points by 31 Aug 2017, they will be converted to cashback at a rate of 100 points= S$0.25

Again, this assumes you don’t have another HSBC credit card that earns rewards points.

For us consumers, the generally accepted rate for buying miles through annual fees is no more than 2 cents per mile (although there are several credit cards that will let you buy closer to the 1.6-1.7 cpm mark)

But when banks buy miles in bulk from the airlines, they presumably get some sort of discount. How much that discount is, we don’t know, but HSBC’s valuation is perhaps is one of the most explicit statements of how banks value miles.

HSBC will convert your accumulated rewards points at a rate of 100 points= S$0.25. 100 points is 40 miles. This means HSBC is willing to pay you 0.625 cents per mile, and this forms the floor price for what they buy miles at.

Now, here are some questions you might be asking-

Couldn’t they just have imposed a cap on 10X?

I’ve said from the start that awarding 4 mpd without limit is simply unsustainable from a financial point of view. A long time ago I had a sit down with someone in the cards team at a major local bank, and he showed me the math illustrating how they were bleeding money every time they had a 10X type promotion.

10X type promotions cannot exist in a vacuum- they need to drive some other sort of behavior, be it spending on a certain category (dining, shopping online), in a certain way (Paywave) or opening a certain account (Advance).

My guess is that HSBC’s goal with the 10X Advance promotion was to drive enrolments in their Advance program, which is something like entry-level preferred banking. They probably intended to do cross selling of other financial products and build up their customer base. All those funds parked in low interest earning accounts couldn’t have hurt either.

But now that objective has been met (or simply failed to be met for so long that they’ve given up), there’s really no reason to continue 10X-ing, even with a cap. Why leave more money on the table than you have to?

So it would have been nice to see HSBC start to sunset this promotion by imposing a cap, but really the business case didn’t work out for them.

Should I close my HSBC Advance account?

This seems a bit of a no-brainer to me. If HSBC stops the 10X promotion, I’m not going to have my funds sitting around in a virtually zero interest earning account (I mean, who would do that right). I will be transferring my funds out and closing my account once I get back to Singapore.

What card do I now use for online shopping?

Fortunately, there are other cards that can step in to fill the online shopping void. Any of the following should work

  • DBS Woman’s World Card- 4 mpd, maximum S$2,000 per month
  • UOB Preferred Platinum Visa- 4 mpd, maximum S$12,000 a year
  • Citibank Rewards Card- 4 mpd, maximum S$12,000 a year

As with all expenditure, there will be a deluge of “will spending at XXX get 10X?” questions. Please refer to this spreadsheet which has put together a lot of the information you need.

P.S- I know there are some who will advocate using the Singpost Platinum Visa card that earns 7% cashback on online spending, capped at S$720 per year. You need to spend S$600 a month to earn the 7% rate. You already know my feelings on cashback cards, but if you think this works for you then by all means. He said, passive aggressively. 

What card do I now use for dining?

Image result for uob preferred platinum amex

If you’re got a UOB Preferred Platinum AMEX, carry on. If not, there has been a recently verified report of someone successfully applying for the card via the SMS method, so that seems to be your best option. On the other hand, a lot of other people who tried that have already been rejected so I wouldn’t go in expecting to be approved. The Schrodinger’s cat nature of the UOB PP Amex continues to fascinate me, I’ve really got to write something about that soon…

Otherwise, the HSBC Revolution gives 2 mpd for dining, online and entertainment spend, so it’s a plausible choice if you don’t have an alternative dining card and want to continue accumulating points with HSBC. Be sure to open your card before 31 Aug 2017 though, or you could see all your hard earned points get converted to cash…

Alternatively, the Maybank Horizon Visa Signature card will get you 3.2 mpd on dining both locally and overseas, as well as petrol and taxi fares.

Edit: Oh yes, the OCBC Voyage card offers 2.3 mpd on dining as well.

Conclusion

It’s sad to see the HSBC Advance 10X go away, but opportunities come and go all the time. Let’s be thankful for all the miles we earned while it lasted, and look forward to the next big thing.

Chicks were born to give you fever, be it Fahrenheit or Centigrade

I never actually owned a Fevo card, but for those who did, it was always a good way of ensuring you maxed out the 10X on your DBS Woman’s World card for the month.

Image result for fevo card

The plan was simple- you used your DBS Woman’s World card to add $2,000 to your Fevo card each month (well, technically $1,000 at a time, because that was the limit). That counted as an online transaction, earning you the equivalent of 8,000 miles. Then, you used that $2,000 for your day to day expenses, effectively turning regular spending into specialized spending. All it cost you was a nominal top up fee.

The DBS Woman’s card awards you 1X at the time the transaction posts, and the bonus 9X on the 16th of the next calendar month. Many people tended to forget this, though, so every now and then you’d get people on the comments section/HWZ forums saying “guys I think it’s dead, should I call and check” (said person would then be told off with harsh language).

Well, it now appears that the DBS Woman’s FEVO trick is dead, for real. Posters on HWZ are reporting that they did not get the bonus 9X for FEVO transactions done in April. Technically, those who topped up early April reported success, but those who did so in the later half of the month are reporting no dice.

I imagine people will still give this another try next month to see if this month was just a glitch of some sort, but I wouldn’t be too optimistic.

That said, I’d like to echo what laurent_rio says on HWZ-

And that’s as sound advice as I can give anyone playing the miles game.

DBS Woman’s card updates T&C to exclude Cardup & iPayMy

Cardup and iPayMy are two Singapore startups that give you the opportunity to use your credit card to pay for things that you normally can’t use your credit card for, like rental, income tax, condo fees, school fees etc., in exchange for a 2.6% processing fee.

[It may be best practice to point out that The Milelion has previously worked with iPayMy to produce two webinar series on miles earning and miles using, for which all remuneration went to World Vision]

Although both platforms will point to convenience, the ability to schedule payments and their own proprietary rewards program as reasons to use their services, I’ve said from the start that the only thing that justifies paying a 2.6% fee is the ability to earn 10X/ 4 mpd.

I’ve done the working before, but it bears repeating. If you can get 10X points, you pay-

2.6 cents= 4 miles or 0.65 cents per mile

If you’re earning regular spending rates of 1.4 mpd (e.g with the UOB PRVI), your equation becomes-

2.6 cents=1.4 miles or 1.86 cents per mile

1.86 cpm isn’t a terrible price to buy miles at, insofar as it’s below the magical 2 cpm threshold, but remember that you could potentially be buying miles for less through annual fees.

This then leads us to the magic question- do iPayMy and Cardup earn 10x?

If you want some amusement, scroll through the comments section of this article, where it seems every other post is someone asking “does (CARD NAME) earn 10x?”

I mean, it’s perfectly understandable why people would ask this. 10X cards are high risk, high reward. If the bank doesn’t consider the merchant to be a 10x-able category, you earn 0.4 mpd. And if you earn 0.4 mpd you’re the loser because of the 2.6% transaction fee.

The answer is: I don’t know for sure. When I used my DBS Woman’s World card and Cardup to pay my NUSS membership fees back in December last year, I did indeed get 10X points. But each month the game can change without notice, and just because something worked last month doesn’t mean it will work this month.

Whatever the case, it now seems confirmed that it won’t work for the DBS Woman’s card, as (someone pointed this out on the comments on 5th May, and I only got around to seeing it now),  DBS’s T&C for the Woman’s card have been updated to explicitly exclude payments made to Cardup and iPayMy

Bummer. Why would the banks take this away?

To understand the answer to that question, we need to understand why banks give 10X.

Why do banks give 10X?

Two words: discretionary spend.

Let’s think about all the 10X opportunities that exist right now.

  • Citibank Rewards (online and offline shopping)
  • HSBC Advance (online and dining)
  • UOB Pref Plat Visa (online and Paywave)
  • DBS Woman’s World (online)
  • UOB Visa Signature (overseas)

Notice anything in common?

Well, all the categories that get 10X are those where banks are trying to drive discretionary consumer spending.

You don’t have to eat out, but the banks hope that by offering you 10X you feel less guilty about swiping your card. You don’t have to indulge in online shopping, but banks give you 10X to encourage you to splurge on Amazon. If you bother to change your money at The Arcade before heading overseas, you don’t have to swipe your credit card overseas, but the banks hope that 10X will change your mind.

(Paywave seems to be less of a discretionary spend category given that you’ll find it at supermarkets, pharmacies and lots of other “utilitarian” places, but I’m guessing that the 10X program was conceptualized when Paywave was relatively new in Singapore and UOB wanted to drive adoption of the technology. Since Paywave transactions are capped at $100 and the overall 10X on the PPV is capped at $12,000 spend per year In any case, UOB doesn’t give UNI$ at merchants that are members of its SMART$ program, which, surprise surprise, is most of the supermarkets + pharmacies)

Banks don’t need to incentivize your non-discretionary spending because they know you’d do it anyway. Groceries need to be bought. Medical bills need to be paid. But they want to encourage you to spend above your baseline, and that’s why 10X opportunities exist.

Now think about what iPayMy and Cardup are offering. They are letting you turn routine, necessary payments into 10X opportunities. That’s great for you, but not so much for the bank, which suddenly realises that it’s having to pay out additional DBS points/UNI $ on payments that were going to happen anyway.

Therefore, from the bank’s point of view, it doesn’t make sense for them to reward this. And I fear that we’re now going to see more and more banks set this out explicitly. I know that HSBC Advance already doesn’t give 10X on iPayMy/Cardup, and to my knowledge only the UOB PPV currently earns 10X.

And that’s a big deal for iPayMy/Cardup, because, looping back to my opening argument, the only way I’ll pay 2.6% is if I get 10X. I’m sure the same goes for a lot of people in the miles community.

(I suspect the platforms themselves aren’t too confident about advertising 10X earning opportunities, because the working on Cardup’s own website illustrates a 1.4 mpd opportunity, not 10X)

The solution? Both iPayMy and Cardup have to go to the banks, sit down with them and say- this is what we offer, this is what people want. How can we make this work?

And whether the answer involves some sort of cost sharing, or joint promotion, or explicit cap on 10X for iPayMy/Cardup, I don’t know. But something needs to happen, because the longer the ambiguity about 10X exists, the fewer miles chasers will use either platform.