Tag Archives: citibank

Putting this 1.2/1.4 mpd and rounding issue to bed

A common objection I get when I recommend UOB cards for miles earning is that these banks round your transaction down to the nearest $5, so a $9.99 transaction earns the same amount of miles as a $5 transaction ($5 @ 1.4 mpd with the UOB PRVI Miles).

Other banks, like Citibank/HSBC, award miles to the nearest $1, so that same $9.99 transaction would earn you 10.8 miles ($9 @ 1.2 mpd.

But the key question you need to ask yourself is this- what is my average/median transaction size? This determines whether or not the enhanced miles earning of a UOB PRVI Miles card (1.4 mpd) can make up for the rounding down effect.

How big a problem is rounding?

Here’s a simple table showing how you end up with transactions ranging from $4.99 to $99.99, comparing a hypothetical 1.2 mpd arrangement (Citibank Premiermiles Visa) with a 1.4 mpd arrangement (UOB PRVI Miles)

Red= you lose out with a the 1.4 mpd, rounding down card. Calculations for 1.4 mpd based on transactions rounded down to the nearest $5, calculations for 1.2 mpd based on transactions rounded down to the nearest $1

What you can see is that once your transaction goes above ~$30, the incremental 0.2 miles you earn with UOB offsets the rounding down effect. The gap only grows bigger the larger the transaction is.

Or fine, let’s take the Citibank Premiermiles AMEX (1.3 mpd) instead and see what happens.

Red= you lose out with a the 1.4 mpd, rounding down card. Calculations for 1.4 mpd based on transactions rounded down to the nearest $5, calculations for 1.2 mpd based on transactions rounded down to the nearest $1

Now, as expected, the “sweet spot” moves upwards in that transactions of ~$55 or above favor the UOB card.

My median transaction size is just under $30, but my average is $270 (it’s skewed because of large business expenses). So although 50% of my transactions are under $30 (and I’m losing out on some miles due to rounding there), I’m still winning overall by using a card like the PRVI because the marginal 0.2 mpd is being earned on some significantly large transactions. 

What you need to realise is that even if you are using the UOB PRVI and have, say, 30 transactions where you’re losing out on 2-3 miles each time, all it takes is a large single transaction of ~$300-450 to put you in the same position as if you were using a 1.2 mpd, no rounding card. And that’s what most people’s transactions will look like, right? You’ll have maybe 30 small transactions in a period and the occasional big ticket purchase.

I mean, sure, if you really wanted to there’s nothing stopping you from swapping between your Citibank Premiermiles and UOB PRVI, depending on the transaction size. But that’s a step too far, even for me.

Other considerations

Moreover, the mpd rate is no doubt important but there are other things you need to consider as well. If you’re comparing the DBS Altitude cards (1.2 mpd, rounding down to nearest $5- for more details on rounding please see the comments where johnnyboy has some excellent analysis. It’s not exactly as simple as I’m making it sound) to Citibank Premiermiles (1.2 mpd, rounding down to nearest $1) then the Premiermiles card seems to be better, but better here is in the context of miles earning potential.

Think about pooling (Citibank has two different currencies (ThankYou points and Premiermiles) that you can’t pool, which forces you to pay two conversion fees), think about transfer partners (Citibank has so many more transfer partners than DBS), think about card and mile earning promotions (like the one currently happening with the DBS Altitude Visa), think about expiry of miles, and the picture becomes a bit different.

So I’d encourage you to do a serious analysis of your own spending patterns in deciding whether the rounding issue will be a hindrance to you.

Support The Milelion when you sign up for credit cards

The Milelion is free and will always be.

Different websites have different ways of staying free. Some websites have annoying autoplay video ads. Others have adblock blockers that obnoxiously take up your whole screen and demand you unblock them. Still others have a big popunder asking them to subscribe to a spammy newsletter.

The Milelion doesn’t go for any of that. All ads are non-obtrusive and on the sidebar. Block them if they annoy you (but if they don’t, consider whitelisting). The newsletter is yours to subscribe to via the small box on the left. You won’t get a begging signup box blocking your screen. And autoplay video ads? Come the revolution, any website with those will be first against the wall.

But ultimately, The Milelion needs to be sustainable. And I’d prefer to do this in the least intrusive way possible. That’s why we’re going to start putting affiliate links in some articles for ANZ, Citibank and Standard Chartered credit cards. HSBC will follow soon. UOB and DBS, unfortunately, do not partner with the affiliate network I’m using but we might be able to get them through a 3rd party finance site.

How these links work is simple- if you read about a credit card that sounds like something you might like, sign up for it through our link. We’ll earn a referral fee. Signing up this way still makes you eligible for whatever sign up bonus/gifts the banks offer.

For example, if you click on the ANZ credit card link  to sign up for an ANZ Travel Card, you’ll see this

And if you sign up for the Travel Visa Signature Card, you’ll get the 25,000 bonus miles and 28″ luggage, subject to meeting the regular T&C.

Remember- I don’t see any of this money. All costs incurred in running The Milelion (social and otherwise) are borne by me. All revenues earned by the site until 31 July go to support World Vision.

We’re a bit lower than I was expecting at this time in the campaign, but hopefully with the additional revenue from affiliate sign ups we’ll meet the $5K goal.

Final point: I understand people might be concerned about how this affects content objectivity. That’s fair enough. The last thing I want is this becoming the kind of website that can say with a straight face that the Krisflyer Ascend card is a good option(I swear, they updated the headline to add “Or the worst?” since I last read it).

Let me put it this way- over the past 2 years The Milelion has been in existence I’ve made it clear I’d rather die than recommend a crappy card to someone. And although there are some great affiliate offers for crappy cards, including a particular mall-related AMEX that I have described, rather charitably, as possibly the worst card in Singapore, I’m not going to put those links here. I trust you have the right resources here to know which cards you should and shouldn’t be applying for, if you want to play the miles game.

I’m going to put some links below, but I will progressively populate older articles (like my good friend the Milelion Credit Card Omnibus) with these as well.

Thanks to everyone for your support

Aaron


ANZ

Travel Visa Signature

UPDATE: I’d advise against applying for this card given the recent cuts to benefits. No more 10k miles when paying the annual fee. 

Despite the recent devaluation of the lounge access benefit, the ANZ Travel Visa Signature remains a solid card to have assuming you travel frequently to Australia/NZ. You can get up to 25,000 miles if you’re willing to pay the first year annual fee and spend $3,000 in the first month.

Get more air miles with every dollar

Citibank

If you’re a new Citibank cardholder, you can get $120 cashback when you sign up here. I wrote a short article on how this can be a potential avenue to MS, if you’re into that sort of thing…

Citibank Rewards Card

Apply here

The old stalwart of the rewards card portfolio, the Citibank Rewards may have lost some utility ever since bill payment via AXS was taken away, but regular promotions like the one with Amazon make it a solid card to have in my book.

Citibank Premiermiles Visa

Apply here

I don’t love Citibank’s policy of having separate redemption fees for ThankYou points and Premiermiles, but I do love that they have the most useful transfer partners of any SG based bank.

For the full runthrough you can refer to the Citibank entry in the credit card omnibus.

Standard Chartered

Standard Chartered Visa Infinite

Image result for standard chartered visa infinite

Apply here

The SC Visa Infinite (S$30,000 income requirement (!) if you’re a priority/private banking customer, S$150,000 if not) has an a choice of 2 welcome gifts in exchange for a S$588.50 annual fee

  1. 35,000 miles
  2. 25,000 miles plus S$100 Uber Credit

If you opt for (1), you are essentially buying miles at 1.68 cents each. This is one of the lowest rates I’ve ever seen for sign up/renewal bonuses. There are some decent card related bonuses too, and if you’re the sort who puts at least S$2K spend on your card each month you can earn 3 mpd on overseas spending.


We’ll add more links once HSBC comes through, hopefully there’ll be another extension to the 10X points on the Advance Card?

Citibank increases minimum points/miles redemption to 10,000

Continuing with variations on a theme…

ALEXANDER TERRIBLE HORRIBLE.jpg

Citibank is revising the T&C of their rewards program effective 30 March 2017 to increase the minimum number of points that need to be transferred. The screen capture below says it all really.

I’ve got mixed feelings about Citibank. They don’t pool your points together (people have reported getting CSOs to combine ThankYou points from different cards but have been less successful getting ThankYou points combined with Premiermiles) which means you need to pay two redemption fees to redeem points from two different cards.

However, they made up for that a little bit with their flexibility. You could transfer a minimum of 500 miles/points to an airline frequent flyer program, making it a great rewards program to use if you just needed to top up your account a little bit but wanted to put the rest of your miles elsewhere (and didn’t mind paying a one time S$25 fee for that privilege)

Now that the minimum transfer amount is 10,000 miles, you lose that nimbleness. That said, Citibank does have some of the most useful partners of any Singapore bank. In addition to the usual Asia Miles and Krisflyer, you can transfer to Thai, Delta, MAS, BA, Etihad, EVA and of course, everyone’s favourite Indonesian airline Garuda.

With this change, the minimum cashout amounts by bank are as follows

  • DBS- 10,000 miles
  • UOB- 10,000 miles
  • Citibank- 10,000 miles
  • HSBC- 2,000 miles
  • ANZ- 2,000 (Asiamiles), 5,000 (Krisflyer)
  • OCBC- 10,000 miles
  • Maybank- 2,000 miles

I’m generally ambivalent about minimum transfer amounts and transfer fees because I’m in the habit of cashing out a large chunk at one go, which makes the fees more of a rounding error in the grand scheme of things. But it does seem that banks are moving towards less flexibility (see DBS’s switch from an unlimited transfer model to a per transfer model)