The Krisflyer UOB account needs no further introduction for frequent readers of the site (but for those of you who are new here, take a walk down memory lane…).
The account hasn’t changed since it launched- it still offers 0 interest, it still requires you to park a ridiculous amount of money to earn anything more than 1.4 mpd (which you could just as easily earn with a regular miles card), it still caps the bonus miles you earn at a ridiculously low threshold and it’s still shelling out for influencer Instagram ads (which at least are properly tagged with #ad now, with the exception of a certain ferrous female…)
What’s new is that UOB is currently running a sign up offer of 5,000 miles with $500 of spend on the Krisflyer UOB debit card. You need to open an account and maintain a minimum monthly average balance of $5,000.
Now, don’t get too excited- this is a UOB-style sign up promotion so as you might expect there’s all sorts of caveats. Here are the main conditions (T&C here):
Note that although you have until 31 August to sign up for an account, you need to be among the first 5,000 people to register for the promotion via SMS. The T&C suggest this promotion has been live since 8 August. How many people have registered so far? How many have hit the $500 requirement already? Who knows!
The terms state that if you’re among the first 5,000 to register, keep $5,000 MAB in your account and spend $500 on the debit card by 30 Sept, you get
1,000 miles within 3 months of spending the $500
4,000 miles within 3 months of 30 Sept
But there’s more. Reading the fine print reveals this additional term-
If you close your account within 9 months from the time of opening, UOB reserves the right to claw back the 5,000 miles. There’s nothing stopping you from withdrawing your $5,000 after 30 Sept, but remember that you’ll incur a $2 fall below fee if your MAB is below $1,000 and a $30 fee if you close the account within 6 months.
I value miles at 2 cents each so 5,000 miles is about $100 of value. Is that a decent return for tying up $5,000 for a month and a half (and $1,000 for 7.5 more months, assuming you don’t want to incur $18 worth of fall below fees)? Depends what your alternative is. If that money would have sat in a savings account then you’re not losing much, but that money could obviously be put to much more fruitful purposes. For the record, I’m not a fan of the 3 month timeline given in the T&C either- it seems like a long time for your miles to credit given that one of the professed perks of the account is “faster miles crediting through direct deposit”.
The main problem I have with the promotions that UOB runs is uncertainty. The way they’ve structured this (and other sign up promotions like those for the UOB PRVI Miles card) is that you have no way of knowing ex-ante whether or not the promotion has been exhausted. You have to apply for the account, spend the $500 and pray that you’re still within the first 5,000. If not, the only way you’ll know is when nothing happens. The information asymmetry is not customer-friendly. I understand UOB’s want to cap the liability incurred with each promotion, but surely there’s got to be a better way of doing it than making customers guess in the dark.
Personally I can think of much better and faster ways of earning 5,000 miles, so this one is a pass for me. But if you really need the miles and are willing to bear both the risk (of missing out on the first 5,000 registrations) and the wait (3 months for miles crediting, 9 months for account closure), well…
We could start with the lack of proper sponsored post disclosure. Yes. I realise that at the bottom of the post, there’s this line-
This sponsored post is brought to you by UOB. We also want to be able to spend $500 a month on our debit cards to accumulate miles.
But that’s my point. It’s at the bottom. I’ve called out this problem before, but I’ll say it again: I fervently believe that such disclosures obey the letter but not the spirit of the law. Disclosure needs to be full, frank, and upfront. Because that can be the difference between someone choosing to read an article or not.
By only telling people at the end that a post was sponsored, you’re leading them up the garden path. They read an article with the lens that whatever is being said is a personal, objective opinion. Then you say, oh, by the way, this is sponsored. That’s just bad faith. You’re denying them an important piece of information that might affect whether they want to read it in the first place.
Does it really make a difference? Of course it does, and advertisers know it. I’ve seen sponsored post briefs that (if they mention disclosure at all) ask for disclosure to be at the end, rather than upfront. Because people don’t like being bs-ed, and the tendency is to switch off once you see a post is sponsored. And evidently Mothership’s writers know that it makes a difference too. Because why else would you bury the disclosure at the bottom if you felt otherwise?
I want to spend the bulk of this post talking about the content of Mothership’s article. You might be shocked to know that I don’t agree with their findings.
I know, I’m a bit like this-
But Mothership is big. Like, register with MDA big. That blue line in the graph below is Mothership. That orange line below is The Milelion, for comparison. I get size anxiety.
If 2 million people read Mothership each month, that’s 2 million people who could potentially be misled. And some of those 2 million people could be chiobus. So I must do something, because everyone loves an internets hero.
Once more unto the breach…
Analyzing Mothership’s post
Let’s first set the rules of engagement. I’ll let Mothership do that
For the sake of this article, let’s assume you are a millennial who has been in the workforce for a couple of years and are considering getting the KrisFlyer UOB account. Since that’s UOB’s target audience anyway.
Hold on, lemme fix a typo
For the sake of this sponsored article, let’s assume you are a millennial who has been in the workforce for a couple of years and are considering getting the KrisFlyer UOB account. Since that’s UOB’s target audience anyway.
Ah. Better. OK, go on.
Mothership considers the 3 potential tiers of miles earning that the Krisflyer UOB account offers, based on account balance. To recap- that’s
$3K-$100K: 1.4 miles per dollar (mpd)
$100K-$350K: 3.4 mpd
>$350K: 5.4 mpd
They rule out the >$350K and $100-350K tiers, thankfully, because that’s just plain unrealistic, and settle on the third.
That leaves the third tier, which starts at $3,000. Plenty of financial sites widely advocate having 3 – 6 months’ salary in savings stashed away in case of emergency. This tier seems more achievable for most people.
Fine. Now one assumption from me: I’m going to assume this millennial (there’s that word again!) grad earns at least $30K per annum.
I don’t think that’s too far a stretch, because I’ve shown previously that the average poly or uni grad should be earning at least $30K per annum, once the 13th month bonus is taken into account.
So here’s how this will work. Mothership will make the case for using the UOB Krisflyer account. I’m going to make the case for using the DBS Altitude Visa card (minimum income required: $30K).
And I’m going to give Mothership 3 major handicaps.
I’m going to assume that this fresh grad doesn’t spend anything on foreign currency transactions (2.0 mpd) or air tickets (3.0 mpd), instead earning 1.2 mpd everywhere. That’s unrealistic, but I’m feeling generous.
And I’m going to assume that our fresh grad just uses this one card. Yup, I’m not going to suggest any of my multiple card strategies. That’s a big problem for anyone pursuing a miles strategy, but I read that chiobu like cocky guys
Mothership shows the working from the Krisflyer UOB miles calculator- with $500 monthly spending and a $3K monthly account balance (MAB) you’ll end up with 4,200 miles at the end of the year.
You might be wondering- $6,000 of annual spending at 1.4 mpd, isn’t that 8,400 miles? Yes, it is. Except that the bonus miles you can earn each month is capped at 5% of your MAB. In this case, that’s 0.05*$3,000=150 miles.
Which means that each month, your first $150 of spending earns 1.4 mpd. Your next $350 is earning 0.4 mpd!
Mothership notes this restriction, but apart from this caption above, they don’t mention it anywhere in their calculations. Don’t you think it’s a pretty crucial point?
My turn: if our fresh grad spends $500 a month at 1.2 mpd for a year, he’ll have 7,200 miles. Boom. He doesn’t even need to put that $3,000 in a 0 interest earning account, and he’ll have 3,000 more miles than if he followed the Mothership option.
Mothership then presents some suggestions as to how you should spend this veritable bounty. They note, correctly, that you can’t go anywhere.
Well, to be fair, neither can my fresh grad who has 7,200 miles. But my guy is 300 miles shy of a one way economy class ticket to Bali. Their guy is 3,300 short.
No worries, Mothership has another suggestion-
An alternative option here is for you to redeem the Scoot voucher to offset your budget travel. The KrisFlyer UOB account also gives you perks with Scoot such as priority check-in and boarding, additional 5kg luggage when you purchase of 20kg baggage, and free seat selection.
An alternative option here is for you to redeem the Scoot voucher to offset your budget travel.
redeem the Scoot voucher to offset your budget travel
redeem the Scoot voucher
I hate myself for what I’m about to say.
If you’re going to use the miles you earned from your Krisflyer UOB account for Scoot vouchers, you might as well be using a cashback card.
There. I said it. Are you happy now, Mothership? You made me recommend a cashback card.
I feel so dirty right now. But it’s true. With $500 a month spending on a 1.5% cashback card (eg. AMEX True Cashback Card/ SCB Unlimited Cashback Card), you’d earn $90 cashback in a year. That’s $60 more than a $30 Scoot voucher, and it’s not in a captive currency.
Redeeming Scoot vouchers with your Krisflyer miles is a terrible, terrible option that values them at just under 1 cent each. Mothership writers, you can club baby seals. You can play keepaway with an orphan’s bindle. You can unilaterally pull out of the Paris climate accords. But whatever you do, for the love of all things bright and beautiful please don’t redeem Scoot vouchers.
Mothership’s article goes on to helpfully point out-
A quick comparison here: if you kept your $3,000 in a savings account that gives you 0.05% interest on your savings, you would be getting $1.50 in interest a year – which doesn’t quite compare to $30 in Scoot or Tigerair vouchers to go travelling.
But that’s a false dichotomy. Our fresh grad’s alternative option is not just to put $3,000 in a savings account and earn 0.05% interest. As I’ve shown, our fresh grad can get an entry-level DBS Altitude card and outearn the Krisflyer UOB account. Hell, our fresh grad can get an entry-level cashback card and still end up better off than with the Krisflyer UOB account (based on a valuation of 2 cents per mile)
Because ending their example with a $30 Scoot voucher would be a bit of a damp squib, Mothership shows the position you’d be in after 3 years too
If you spent $500 per month for three years and have $3,000 in the account, you would be able to accumulate 12,600 KrisFlyer miles.
Great. My fresh grad? He’s got 21,600 miles ($500*12 months*3 years*1.2mpd). He’s jetting off to Shanghai, Beijing, Hong Kong, Taipei, Male, Perth, while the furthest Mothership’s fresh grad can get to is Bangkok.
2. 20s in their second job: $10,000 monthly account balance, $750 monthly spend
Mothership proposes a second scenario. Crunch a $10,000 MAB with a $750 monthly spend into the trusty miles calculator, and 9,600 miles is the outcome.
But again, this person using the Krisflyer UOB account has triggered his monthly bonus cap with his $750 spending. That $9,600 annual spend at 1.4 mpd should have given him 13,440 miles. Remember though, his bonus miles are capped at 500 per month (0.05*$10,000 MAB). He earns 1.4 mpd on the first $500, and 0.4 mpd on the next $250.
What about my guy? $750 a month at 1.2 mpd=10,800 miles in a year. He’s ahead by 1,200 miles. And he didn’t have to put $10,000 in a 0 interest earning account.
Again, if you kept your $10,000 in a savings account that offers 0.05% interest, you would be rewarded with $5 interest a year – would you rather have that or a ticket to one of the above destinations?
False dichotomy alert #2. I mean, I could paraphrase that and say “Again, if you kept your $10,000 in the UOB Krisflyer account that offers 0% interest, you would be rewarded with 9,600 miles a year- would you rather have that or 10,800 miles plus 0.05% interest?”
Here’s Mothership’s 3 year scenario
And the end of three years of spending $750 per month, you’ll accumulate 28,000 KrisFlyer miles – which is enough to visit most of SIA’s locations.
Cute. My guy is now on 32,400 miles ($750*12 months* 3 years * 1.2 mpd) and feelin’ fine.
What’s that, you say? I’m forgetting annual fees? Yes, it’s true. The DBS Altitude Visa has a $192.60 annual fee, waived for the first year. The UOB Krisflyer debit card has no annual fee.
Here, our guy has two options. First, he can try to apply for an annual fee waiver when it comes due. Banks are usually quite generous with this. Second, if the bank does not waive his annual fee, he will end up with 10,000 miles for each year he renews his DBS Altitude card. So by the end of the third year, he will have 20,000 bonus miles for $385.
If the second option comes to pass, the two propositions after 3 years are
Mothership: Spent $27,000, got 28,000 miles
Mine: Spent $27,000 + $385 on annual fees, got 52,400 miles
I don’t know about you, but I think I’d pay $385 to earn an additional 24,400 miles. My guy can now fly one-way business class to Cape Town, the destination that Mothership recommends we redeem our miles for.
Basically: Mothership’s seat on the Capetown flight
I think we’ll have to agree to disagree.
Does Mothership adequately point out the drawbacks to the account?
Mothership provides two caveats at the bottom of their article. They point out that the account doesn’t earn interest, and they point out that all Krisflyer miles expire after three years.
Fair enough, but this doesn’t anywhere near adequately explain one of the biggest problems with the Krisflyer UOB account: the 5% cap on bonus miles earning. This is the deal killer for me, and for a lot of people in the miles game.
If wanderlust is in your blood and you want your daily spend and savings to help you satisfy that wanderlust, the KrisFlyer UOB account is something for you to consider.
No. It’s not. If wanderlust is in your blood and you want your daily spend to help you satisfy that wanderlust, drop me a note. We’ll talk.
Wrapping it up
I’m confused as to what UOB’s social engagement strategy is. Their influencer campaign backfired, not just for want of disclosure, but also because it was painfully clear these influencers hadn’t the faintest idea what miles were about. They laid low for a while to let things die down, and then they went to Mothership with a sponsored post proposal.
I mean, what was the endgame here? Damage control? The hope that by presenting a few scenarios where the account might make sense, people would change their minds (if so they should have asked Mothership to write about a student or retiree who doesn’t qualify for any credit cards at all, period. But even then, the retiree could probably get a secured DBS Altitude card with a fixed deposit…)?
What was this sponsored article supposed to achieve? I don’t know. I’m as puzzled as you are.
What irks me is that I’ve always considered Mothership to be one of the good guys. I mean, they’re not batshit crazy like All Singapore Stuff. They’re not xenophobic racemongers like TRE (favourite TRE headline: Jollibee discriminates against Singaporean staff. Reason given in article–> Jollibee writes on Facebook “we welcome all Jollibee fans to apply for a job at Jollibee!–> Jollibee has never been in Singapore before–> Only Filipinos could be fans of Jolibee–> Jollibee only wants to hire Filipinos. No, this really happened). They don’t have the existential, prepubescent angst of Amos Yee.
Mothership is a perfectly decent editorial platform. So why are they taking advertiser money to encourage people to sign up for a bad deal?
“Where can a regular twenty-something realistically travel to with the KrisFlyer UOB account?” Mothership asks in their article title. The answer: nowhere great. But fortunately, that’s why we have miles cards. Proper ones.
“This sponsored post is brought to you by UOB. We also want to be able to spend $500 a month on our debit cards to accumulate miles.” Mothership concludes.
Guys, reach out to me. We’ll have coffee. On me. And I’ll show you a better way.
If I could summarize my problem with the product in one sentence, it’d be that the upside to you is capped (in the form of the 5% cap on bonus miles) while the downside to you is unlimited (in the form of 0% interest on your entire balance).
So I’ve made my stance on the matter pretty clear. Still, I’d encourage those of you who are undecided to have a read of some of the coverage on other sites like Dollars and Sense, Moneysmart and even this one piece on Bank Bazaar that tries to take an alternative viewpoint. Read up, understand the product, do your sums and come to your own conclusion.
Financial Alternatives to the UOB Krisflyer account
The only thing I want to add to this is the one piece that was missing from all my analysis- what the opportunity cost of putting your money in a 0 interest account is. I mean, I did talk about it in terms of miles, but I didn’t talk about alternative investments like fixed deposits, equities and the like.
This is because I’m terrible at investments. I mean, I collect miles for goodness sake. They don’t earn interest, they’re not insured and they can only ever be devalued. But man, the experiences you have…
Fortunately, Fiona from SG Budget Babe is better at such things, and she’s kindly prepared some alternative investment options for your consideration (for the record, she was the one who gave me the heads up about the influencer posts that were going around Instagram).
I’d encourage you to have a full read over on her site, but here are the key tables for your reference. The investment options here aren’t exhaustive, of course, but they’re common financial instruments available to most investors.
I’ll discuss the 1 year investment horizon scenario here (she’s prepared a 3 year scenario on her site as well), because we’re not clear what will happen to the UOB Krisflyer earning rates after the first year promotional period, and where equities are concerned we need to make significant assumptions the further out we go.
For a 1 year investment horizon
For a 1 year investment horizon, assuming a $30K deposit and $500 card spending a month, you’d have 8,400 miles with your UOB Krisflyer account. Assuming a 2 cpm value, that’s about $168 of interest. This is slightly over half what you would get if you put it in 0 or virtually 0 risk investments like Fixed Deposits or SSBs. If you were willing to put it in a REIT, you could get significantly more (assuming, of course, you pick the right one) not just from dividends, but capital gains as well.
Even if you spend $1,000 a month, you’d be on 16,800 miles or roughly $336 of value. I realise that’s on par with the 0 risk investments, but you need to factor in the fact that miles are a non-liquid currency. In any case, I’m going to fall back on my thesis statement made elsewhere that if you’re after miles, there are better cards for getting them.
Reflections on a crash
On another note, The Milelion had a server outage that started intermittently around 9 or 10pm last night and escalated into a full website crash all the way until 10.45am this morning.
I am clueless about IT issues (I’ve barely poked around my back end, fnar fnar) and in the space of time between I woke up at 6am to full restoration, I had to learn a lot of acronyms I’d rather not know like CDN, DDOS, TOS, DNS…
Suffice to say, the diagnostics showed the crash was due to a spike in CPU usage beyond which my hosting plan allowed. This caused the hosting platform to suspend access to the site until it was optimized. This has since been done and regular services resumed. I’ve also upgraded the site’s security to prevent a future recurrence.
I don’t have enough technical knowledge to say whether this spike was because of the sheer number of visitors (we crossed 50K yesterday (and imagine what that would have been without the outage!), compared to the usual 3-4K) or whether it was caused by something malicious, and it would be irresponsible to speculate (Russians!).
But I do thank all of you who reached out to let me know something was up, and the others who offered to put me in touch with IT people/other hosting services who could help me resolve it. It means a lot to me that you’d go out of your way to render help to someone you met on the interweb.
But let’s face it- this will eventually fade. UOB will have future product launches. Some will be good, some will be bad. Influencers will continue to promote products. Some will be good, some will be bad.
What is important to me is that The Milelion and its guestwriters continue to call things as we see them, and maintain the highest standards of ethics in our writing. I was very moved by the support in the comments section of the influencer article, and will work tirelessly to keep the trust you guys have placed in this site.
Group hug again.
So keep reading, keep questioning, and keep taking part in the comments and FB discussions. Let’s make this a place where anyone can learn to travel better for less.
I’m glad you’re all as excited about the new Krisflyer UOB account as I am. I mean, why else would you all have, in a coordinated and synchronized manner, simultaneously posted Instantgram posts on the very day the UOB Krisflyer account was launched?
I have to admit, I feel really noob reading all your posts. After all, you guys take better photos than me, have more aesthetically pleasing bodies than me and also got more followers than me. Staring at your followers list makes me feel like proverbial urchin staring through shop window on cold Christmas eve.
Now, because none of these posts were tagged #sponsored, #ad, #advertorial, or #theypaidmeinsmallunmarkedbills, I must assume that these are all impartial reviews based on your personal experiences with the product. Therefore, I am genuinely concerned that you guys are missing out on some of the best opportunities to earn miles.
Fortunately, I can help you here! I’ve done some research on the account and while I feel that the overall idea is definitely innovative, there are things that could potentially be improved on. I really hope that UOB takes notice of these and makes some changes so that a great idea doesn’t get let down by poor execution.
Hope this helps!
I love your food porny posts and the way you introduce to me new restaurants all the time. You’re the reason I haven’t seen my feet in years and have the turning radius of a small van. And am currently going to die alone.
However, it seems like you are paying for your restaurant expenses with the UOB Krisflyer debit card. I think this is a mistake. You see, you could easily be earning 4 mpd on all your local dining and online expenses with the HSBC Advance card, without cap, all the way until 31 May 2017!
Yes, I know the card is a bit of a pain in the butt to get, but trust me, when you’re earning unlimited 4 mpd without an arbitrary 5% cap and a chunk of money earning 0 interest in the bank, it is the most shiok feeling ever. More shiok than when the Sin Huat crab beehoon uncle actually treated me with dignity and respect and never try to upsell me. Happy days man.
But what happens after 31 May, you ask? Well, we can hope that HSBC, from the kindness of their hearts, decides to extend this promotion again as they have done time and time again in the past. But if they don’t, you might fancy gambling and applying for the UOB Preferred Platinum AMEX and hope they take your application, failing which you could get the Maybank Horizon Visa Signature card which gives 3.2 mpd on dining. Not as good as 4 mpd, of course, but might be better than parking funds in a 0 interest account.
I love your posts because your photo skills really zai. Every time I see your posts I wonder why I must use Blackberry camera to take all my photos. Then I remember that blur out of focus bokeh is the new black(berry). Ha ha ha!
In your post you implied your trip to Sydney was made possible thanks to the UOB Krisflyer account. I am excited because I also want to go Sydney and see koalas boxing wallabies, which I hear is on the national flag.
Now, it takes 56,000 Krisflyer miles for a round trip Economy saver award between Singapore and Sydney.
If you have $3K-$100K in your Krisflyer UOB account (let’s take $51.5K as the middle value), you’d be earning 1.4 mpd, the bonus component of which (1 mpd) is capped at 2,575 (5% of $51.5K) per month.
To earn those 56,000 miles, you’d need to spend $5,250 a month for a year on your Krisflyer UOB debit card (25,200 base miles, 30,900 bonus miles- remember, bonus is capped at 2,575 a month!) for a total outlay of $63,000
But assuming you spent an average of 30% on dining out, 30% on online shopping and 40% on everything else, with the right card strategy (HSBC Advance + DBS Woman’s World/Citibank Rewards + UOB PRVI Miles) you could get a weighted average of 0.3*4 +0.3*4 +0.4 *1.4= 2.96 mpd! This means you’d only have to spend <$19K in a year to get that Sydney trip!
Plus, you’d be able to put that $51.5K to work for you in koalas boxing wallabies futures. I hear the return on that is non-zero.
Obviously, the equation changes if you have 100k+ in your account, but if you are parking $100K+ without interest in the bank, please let me know who your influencer agency is because mine is clearly not doing its job properly.
BTW, please don’t go to Pancakes on the Rocks. Last time I was in Sydney everyone told me that was THE place to go to, but I thought it was super average. This is why I don’t like people.
I love your travel posts. Super bohemian one. I wish my Bangkok trips could be as awesome as yours but I am scared of new experiences so every time I go it’s Paragon–>Roast–>After You–>Patpong–> Emporium
(EDIT: Posts have since been updated with #ad tags)
In one of your posts, however, you mentioned this-
Here’s a tip, use the #KrisFlyerUOB Account on your fav budget airlines Scoot & Tigerair to get complimentary additional baggage allowance plus FREE seat selection and more ? (got you covered here)
Don’t worry! Bro got you covered too!
You might like to know that your complimentary additional allowance (5kg) only applies if you buy a minimum of 20kg luggage allowance. And you need to buy this 20kg at the time of booking, not after! If you buy after, hard luck.
Also, you talked about complimentary seat selection. I am balding and have bad BO, so no one wants to travel with me. But if you travel with your friends, you need to know that only the principal cardholder gets free seat selection, even if the other travelling parties are on the same booking.
PS- I’m a bit confused, because from the way you’ve written your post…
Scratched this off my bucket list on my trip with #KrisFlyerUOB, the first debit card & account in Singapore.
…it kind of makes it sound like you’ve already been able to travel with the miles you got from this account. Which is quite impressive given that it was only launched a few days ago, and (assuming your situation matches melissackoh’s) you’d have had to have spent ~S$56K to get the 25,000 miles you need for a round trip economy saver (you see your bonus 1 mpd is capped at 2,575 miles each month, meaning you’d have to earn the remainder 22,425 miles at 0.4 mpd)
Moreover, as per the T&C of the UOB Krisflyer debit card, any miles earned only get credited to your Krisflyer account at the end of the month. And it’s only 24th April. If you have lobang for faster miles crediting, please share ok?
Hope you guys are doing well. I liked that quote by Eleanor Roosevelt you shared- “Do one thing every day that scares you.” This morning I tried using 1 ply toilet paper instead of my usual 2. Don’t want to tell you how that went but the important thing is I tried.
You guys mentioned this in one of your posts-
Great travel perks such as free seat selection and convenience fee waiver when booking flights — no more additional charges to deal with while planning your next big adventure
Regarding the free seat selection- see the advice I gave bellywellyjelly. Regarding convenience fee waiver- take care guys. I know it sounds good but you need to spend a minimum of S$250 on a Scoot/Tigerair booking on a single transaction first. Then you’ll get a fee waiver voucher that can be used on your next booking.
So technically, you should be saying “no more additional charges to deal with while planning your next next big adventure”. Also, be aware that you get a maximum of one waiver a year per account yeah?
You guys say the Krisflyer UOB debit card is helping you achieve your travel dreams. Let me see if I can help you out there- it takes 25,000 miles to go to Laos in economy saver on Silkair. Assuming the same figures I gave to melissackoh, you would need to spend $1,500 a month, or $18,000 a year to get the miles you need (7,200 base, 18,000 bonus).
But if you used my recommended card strategy @ 2.96 mpd, you’d only need to spend ~$8.5K! Anyway guys, I recommend you save your Krisflyer miles for long haul redemptions. You could get to Laos for <S$400 return trip with budget airlines.
So that’s my advice!
My fellow influencers, let us continue to maintain the highest standards of transparency and miles earningness. Without us, the public is lost.
When the Krisflyer UOB account was first announced, I, like many other people in the miles and points game, was very excited. The 5.4 mpd figures they were throwing about were head and shoulders above anything currently offered in Singapore. The idea of a bank account that let you earn miles was something new and potentially gamechanging- if they could get it right.
But then the full details came out, and that excitement turned to disappointment. If you wanted to earn that 5.4 mpd, you’d have to park at least $350,000 in a bank account earning no interest. Your miles earning would be capped at 5% of your bank account balance, meaning that once you spent beyond a certain amount, you’d earn 0.4 mpd instead of the headline 5.4. The trumpeted benefits with Scoot and Tigerair came with so many strings attached they might as well not be used. And to top it all off, the headline rates were promotional only, with no guarantee of renewal.
I doubt I was alone in my disappointment, because the post I wrote went on to blow up in a big way- 23K+ impressions on Facebook, which is something of a record for this site. To put it another way, the Krisflyer devaluation was huge, but that only bumped about 7.5K.
And it’s not just me. The laojiaos on HWZ (who know much more about all this than I do) are also cheesed off. Coverage on other sites like The ShutterWhale has similarly been negative.
I guess that’s made UOB sit up and take notice, because it’s come out to defend its product in a Business Times article published today. (I’m quoted in the article but was not contacted directly by the journalist) Unfortunately, the article is behind a paywall, but I’ve purchased a copy that I’ll share as soon as SPH emails it to me.
The sad thing about UOB’s response is that they’ve completely missed the point. The UOB Krisflyer account is supposed to be for those people who want to earn Krisflyer miles. If that’s the case, why is it so bad at what it’s supposed to be doing?
Let’s go through the points that UOB made one by one.
“While UOB did not dispute the calculations in the post, it said that the Krisflyer UOB account combines a debit card and current account to award air miles, designed for millennials and frequent flyers on the insight it has into their lifestyle, spending and savings choices.
“Our consumer insight tells us that this account, which has an accelerated earn-rate for Krisflyer miles, will be attractive to those who would rather have free flights instead of earning interest,” said a UOB Spokeswoman
Ah, millennials. That nebulously defined group of people about whom marketers seems to know so much. I’m a millennial, and I often wonder why every single article I read about me doesn’t seem to describe me at all.
UOB said at the launch of this product that “the account provides millennials in the early stages of their career who may not be eligible for a credit card to accumulate KrisFlyer miles”
If that is an important pillar of the value proposition, we need to examine it closely. First, what exactly is a millennial? I assume in this context they’re talking about a fresh grad, young professional who just entered the workforce. What would that person look like?
The median graduate from SMU/NUS/NTU would be drawing a salary of S$3,360 a month, as per this ST article. That’s well within credit card eligibility territory. Even if you were suay enough to pick the degree that has the lowest starting pay (SIT DigiPen Bachelor of Arts in Game Design – $2,490), after your annual bonus you will almost certainly be able to hit the magic $30K mark that opens up credit cards.
A post-NS poly grad would pull ~S$2.3-2.5K per month, which after a 13th month bonus would still be enough to get a card.
Therefore I can’t understand the claim that this product is somehow opening up the miles earning world to “millennials”, if we define the word that way. Sure, a new graduate would not be able to get a UOB PRVI Miles card (S$80K min income), but as we shall see in the next section there are many other good options available.
With the Krisflyer UOB account, customers with a monthly average balance of S$20,000 and a monthly spend of S$1,000 would, over one year, be able to earn the equivalent of a return trip to Bali on Singapore Airlines”
Let’s look at this hypothetical person that UOB describes, with an MAB of S$20K and monthly spending of S$1K. With UOB’s Krisflyer account, you’d earn 16,800 miles over the course of a year.
But if you spread your S$1K monthly spending intelligently around two DBS cards (just two! I’m not going to propose my usual crazy 5 card strategies here) and spent 30% online (DBS Woman’s Card, $30K min income, 2 mpd online spending) and a weighted equivalent 10% on travel (DBS Altitude, S$30K min income, 3 mpd on travel), you’d have 19,440 miles in a year.
What I’m trying to show is that with a little bit of planning, and only 2 entry-level credit cards, you’d get that trip to Bali, plus you’d be able to put that S$20K to work for you in stocks, bonds, or any other investment that earns a non-0 interest rate. Millennials like planning, right?
Even if you do not qualify for a credit card, a secured credit card is still an option. A secured version of the DBS Altitude card can be obtained by anyone aged 21-70, with a minimum S$10K pledge to the bank.
Your S$10K would not earn interest, but
It’s still better than not earning interest on S$20K
You would earn 1.2 mpd on general spending (2 mpd overseas, 3 mpd on travel max $5K per month) with no limits
That, to me, is head and shoulders better than earning a maximum 1,000 bonus miles each month under the UOB arrangement (5% of $20K)
So the hypothetical person that UOB describes has much, much better options for earning both miles and interest.
“A bigger spender of S$3,000 a month for 12 months and monthly average balance of S$350,000 would earn 194,400 Krisflyer miles in 12 months which can be redeemed for one return business class ticket to New York on SIA (worth about S$6,200 on business saver)”
UOB then gives the example of a bigger spender with S$3K monthly spend and a MAB of S$350K. This guy earns 194,400 miles, enough to get a return business ticket to New York (184K miles)
Ok, big spender. First of all, I find it hard to believe anyone could, in good conscience, put S$350K in an account earning 0 interest. There surely must be some law against that. The scenario just doesn’t seem realistic to me.
But fine, in improv you’ve got to roll with the situation so let’s see what we can propose for him.
It’s clear that if you’re spending S$36K a year, even if you somehow managed to convert all that into 4 mpd spending, you’d only hit 144K miles. I know that if you intelligently use sites like Kaligo (up to 13 mpd!) you could bump that 4 mpd upwards, but, realistically speaking, you wouldn’t be able to get 184K on S$36K of spending.
So all in all I’ve spent about ~S$13K and have 192K miles (vs S$36K and 194.4K with UOB). And I didn’t have to park S$350K in a 0 interest earning account.
This, of course, assumes the person in question meets the income thresholds for both cards (S$120K for the Voyage, S$50K for the Premiermiles). But come on- if you can park S$350K at 0 interest, you’re probably fairly wealthy.
“On the first day alone, hundreds of Krisflyer UOB accounts were opened and more than S$4 million deposited with us,” she said.
That’s great, and congrats to UOB and all, but that doesn’t say anything in and of itself. This is commonly known as argumentum ad populum (thanks, AS profs!), or a fallacious argument that concludes a proposition is true because many or most people believe it.
In any case, let’s examine that claim. She said “hundreds”, so let’s assume 500 accounts were opened (otherwise I’m sure they’d have played it up and said “thousands”). If S$4M was deposited, that means the average account size is S$8,000. Which means that this average guy would be earning 1.4 mpd, assuming he spends a minimum of S$500 a month on the Krisflyer UOB debit card. And the maximum bonus he could earn per month would be 400 miles (5% of $8,000). Which means that once he spends more than S$400, he’d be earning 0.4 mpd. Dude.
“For a customer who prefers to earn interest over air miles, we would recommend they deposit their money into a fixed deposit or savings account to earn interest at the prevailing market rates”
But guys, it’s not a trade off.
On the 12-month promotional period, she said that “this just means that we will review it then to make sure we have a competitive product with competitive miles earn rate for our customers. It does not mean that the bonus miles will end after next year
That’s fair enough. UOB may increase the bonus miles earning rate after a year, they may decrease it, they may do nothing. We don’t know. But that uncertainty is in itself a problem. I guess you could argue that if they change the terms later you could just take your funds out and close the account, and you’d be right, but let’s circle back to a central problem- are you really going to forgo interest altogether?
So that’s my take on UOB’s response. What UOB is missing (deliberately or otherwise) is the fact that if you want to sell this product as a miles churning machine, you cannot have a 5% cap on bonus earning. That’s a complete contradiction.
That said, I am sure the product will be a moderate success because, unfortunately, there are enough people out there who will get giddy about the 5.4 figure and not read the fine print. But to those of you who are reading this, please- there are better ways of racking up the miles. Don’t settle for less.
PS. BT- next time you need a quote call me maybe. I have lots of file photos of myself in speedos you can use too.
UOB launched a new product yesterday, the Krisflyer UOB account that allows you to earn miles through your debit card spending. The rate of miles earning varies depending on your total balance in your account.
The premise sounded intriguing, but there were few details. Would there be a cap on miles earning? Would the account earn any interest? What other terms would be lurking beneath the surface?
Well, the product webpage and T&C have since gone live so I’ve spent some time examining the fine print.
And I cannot begin to tell you how bad this product is.
Here’s the product summary-
Fees & Charges
-Initial opening balance of S$1,000
-Annual fee of S$53.50 for debit card with first year waived
-Minimum balance of S$1,000 must be maintained, otherwise S$2 per month fall-below fee applies
-S$30 early closing penalty (within 6 months of opening)
-S$10 per additional chequebook
-1,000 bonus miles when you apply and charge a min of S$500 to the Krisflyer UOB Debit card within 30 days of approval (first 50,000 applicants- UOB strikes again!) -Base mpd: 0.4 (with min S$500 spending in a calendar month) -Bonus mpd: You earn this additional component depending on your overall account balnace
S$3K to <$100K: 1 mile
S$100K to <S$350K: 3 miles
More than S$350K: 5 miles
-Automatic miles conversion to Krisflyer
Benefits on Scoot & Tiger Airways
– Priority check-in and boarding
– Additional baggage allowance
– Standard seat selection
– Convenience fee waiver
Why is this so bad? Let me count the ways
No interest is earned on this account
I suspected this yesterday, but now it’s confirmed. You gotta spend money to earn miles. Your money will earn ZERO interest in this account.
That is implausibly bad. I mean, I love miles as much as the next dude (correction: way more than the next dude) but I’m not going to have S$100K sitting idle just so I can earn 3.4 mpd on my spending. Besides, if you know how to maximise your 4 mpd opportunities this becomes an even worse deal.
For many people, this will already be a dealbreaker. But it gets better…
Your bonus miles are capped, making your effective mpd lower the more you spend
The T&C alludes to a cap, but doesn’t specify what that cap is. However, if you look at the bottom of the promotional webpage, you’ll see this little line that has a dramatic impact on how you view the product-
In case you can’t read that, it says
Bonus Krisflyer miles earned will be capped at 5% of the Monthly Average Balance in the Krisflyer UOB account
This confused me at first because it was comparing miles to money, something that’s not immediately intuitive. What I understand now is that the maximum number of miles you can earn per month is capped at 5% of your monthly average balance (MAB).
So, if your MAB is $350K, you can earn a maximum of 5% of $350K= 17,500 per month. See why that’s confusing? You’re comparing miles and money.
Assuming something possessed you to put $350K in a 0 interest earning account, your math would look like this-
Can you see that once you get beyond S$3,240 of monthly spending, you’re only earning 0.4 mpd on each incremental dollar? That is insane.
Look at the last column- the more you spend, the lower your effective MPD. For someone spending $8,000 a month (not too far a stretch for someone who can afford to park $350K in the bank at 0 interest), you’re earning an effective mpd of 2.5.
If you opt for a more sane amount of maybe ~$100K, the picture gets worse-
Suppose you spent $5,000 a month. You’d be earning 1.4 mpd, which is something you could get with a UOB PRVI miles card, without having to park $100K in a 0 interest earning account.
Play around with the calculator if you want, but the basic facts don’t change. The presence of the cap means that not only do you lose out on the interest, you lose out on what the product is ostensibly supposed to be good for- miles earning.
The bonus miles are for a promotional period only
If those caps weren’t enough to put you off, do note that the T&C imply that the bonus miles (1/3/5 depending on your MAB) is for a promotional period only. No knowing what will happen after that ends.
The Tigerair/Scoot benefits aren’t real benefits
Even if you’re the type who does a lot of regional travel on budget carriers, I wouldn’t get too excited about these benefits-
Priority Check-in: Your entire party enjoys priority check-in and boarding. This is nice to have, but not something I’d pay for anyway
Complimentary Seat Selection: This would be a fairly decent benefit, but for the fact that it’s limited only to the principal cardholder. So if I’ve booked a party of 3, only I get to select my seat for free. That kind of defeats the purpose, given that I’d want to seat us all together. If anything it sound suspiciously like a way of upselling you to shell out for the other 2
Complimentary Additional Baggage: Pfffft. Not a real benefit because of the strings attached. It requires you to buy a minimum 20kg baggage allowance, after which you’ll get a bonus 5kg. And you only get this benefit if you buy the baggage allowance at the time of booking. If you add baggage after initial purchase, you’re SOL.
Convenience Fee Waiver: This was always a major source of annoyance to me, so I was glad to see a waiver was offered. But once again, it’s not really a benefit. You need to spend S$250 on a Scoot/Tigerair booking in a single transaction, then you’ll get a fee waiver voucher that can be used on your next booking, and here’s the best part. You only get one fee waiver voucher per year
These “benefits” are easily the most ham-fisted and stingy I’ve ever seen (and this from a longtime Krisflyer member). It’s like they really didn’t want to give anything, but finally relented as a favor to you. It’s almost bordering on satire.
I gave OCBC a hard time for its sponsored post, but if I were their marketing team I’d be jumping all over this so called “benefit” as a prime example of how other banks don’t market transparently. If they put front and centre the limitations (most noticeably the fact that the convenience fee waiver is ONCE a year), do you think they’d dare to market this as boldly?
This is actually a decent product to replace the PRVI, provided that you have $3000 lying around and don’t mind locking them in. The advantage of this debit card over the PRVI is that you don’t need to pay anything for points transfers, and they happen automatically every month. The drawback is of course the lack of interest free payment period. Realistically, you would want to put in more than $3k, because charges are debited from the account itself. God knows whether UOB will refuse you your 1.4mpd because ‘your balance fell below $3000 on 21 April, between 10.30pm to 10.35pm’.
(I strongly suggest you read the rest of his/her analysis because it’s spot on)
I agree with him/her. If you’re someone who doesn’t hit the income requirement for a PRVI card (S$80K per annum) but you do spend >S$500 a month, you could put S$3K in this account and ensure that your MAB is above that. It’ll be a bit of micro management, but you’d then have a PRVI card without the conversion fees. Note that you wouldn’t enjoy the 2.4 mpd on overseas spend, of course.
EDIT: As Tim pointed out on the comments below, even if you do this the 5% mileage cap comes back to bite you. A 5% mileage cap on a $3K MAB is 150 bonus miles. 150! Your effective is hence a lot lower than 1.4 mpd.
As per UOB’s own calculator a MAB of $3K with monthly spend of $500 gets you 4.2K miles a year or 0.7 mpd. Wow. The odds keep stacking up against you.
How could they even think this would work?
UOB says it anticipates to draw in S$1.5B from funds deposited into these new accounts. Let me assure you that not a single cent of that S$1.5B will be from me.
I have no idea what was going through the minds of the UOB product team when they came up with this. Who did they think they were targeting?
Students? (But which students spend >$500 a month (cool kids probably))
Retirees? (But can’t they get a secured credit card or simply hold on to the ones they had before retirement?)
Cash rich/miles poor people? (You don’t get cash rich by being investment dumb, and I’m sure this group would have identified the 5% cap as a major barrier to adoption)
Gullible people? (probably)
I’m sure over the next few weeks you’re going to have a friend who knows you’re into miles come up to you and say “wah did you hear about the new UOB thing? 5.4 miles leh!” Your job, nay, your duty, is to correct this poor soul and ensure they do not get anywhere near this product.
Say something nice about this product? Sure. I think the card is damn chio.
UOB Team, whatever you’re smoking, I want lots of it.
I’ve talked about how we could use more innovation in terms of miles earning opportunities in Singapore. To that end, we’ve recently seen banks start to offer customers new ways of earning miles, like Standard Chartered’s miles earning time deposit.
Details are scarce at the moment, but from what I gather your savings don’t earn you miles per se. You have to (1) put money in an account and (2) spend money on the debit card that comes with your account to earn miles.
Here’s the breakdown of how you’ll earn miles on your debit card, depending on your overall account balance
S$3,000- S$100,000: 1.4 mpd
S$100,000- S$350,000: 3.4 mpd
>$350,000: 5.4 mpd
On the surface, this seems great for students and those without a fixed income who want to earn miles. Students just need a minimum of S$3K in their account and they can earn 1.4 mpd for spend on their debit card, which matches the best general spending cards on the market now.
However, there is a catch- you need to spend a minimum of S$500 per month to earn any miles at all. I don’t know about you, but when I was a student I didn’t approach that level.
Besides, we don’t know yet if there are any caps involved or what the fine print reads. Will the 5.4 mpd only be on certain categories of spending (an “up to” type of marketing puffery)? Even if there were no caps, 5.4 mpd may sound great, but are you really willing to tie up $350K in a (potentially) 0 interest earning account just to earn it? Surely you’d be better off investing that $350K across a low to moderate risk portfolio generating 4-5% returns per annum?
Even their wealth premium account ( wealth banking) need 350k above then 0.35% pa.
I think u can bet the interest is at MOST 0.35% p a …
Basically exchanging interest for krisflyer miles at 1.4mpd, which could actually have easily been gotten by using other cc for 4milespd ( 1.4 + 4 = 5.4). And debit fraud you eat. CC fraud your liability is 100 bucks.
Quite smart of UOB. They eradicated totally their risk of fraud, tranferring the risk to you , airmiles are dirt cheap for them and yet earn fees for transactions Master/visa/amex , earn more from redemption of points to krisflyer miles and also expiry of orphan miles.
I’ll wait to see the full details before taking a call on this, but let’s remember 5.4 mpd will only sound unbelievably attractive to people who are not aware of specialized spending cards with 4 mpd earning opportunities (and believe me, there are a lot of them). If you’re already maximising your 4 mpd opportunities, there’s no compelling reason to open one of these accounts and tie up $350K.
Perhaps I’m wrong and UOB will count higher interest earning investments towards the $350K balance (and in that sense the UOB Krisflyer account becomes more like a program unto itself), but let’s see what the T&C say before deciding.
Whatever the case, it’s clear UOB expects this to be big- the Business Times is reporting they expect the UOB Krisflyer accounts to bring in S$1.5B of deposits. They’re targeting 200,000 accounts in the next 5 years, which implies an average deposit size of S$7.5K.