Cardmembers who had already paid the annual fee would be on the “old” scheme until their membership year was up. That is to say, if you paid your $42.80 on October 10 2016, you would have unlimited transactions until October 9 2017, after which you’d pay per conversion.
I had not received anything from DBS, so I proceeded to do a transaction in early April to move some miles to Krisflyer.
On examining my ibanking statement, however, I saw that I had been hit with a $26.75 conversion fee. So I called DBS customer service to ask about it.
They told me that my annual membership expired end March and therefore I was on the new scheme. I reminded her about their FAQs which stated that customers would get a heads up via eDM or SMS.
Her response was that although she could see in their SMS outbox that I had not been sent anything, it was not practice for them to send out alerts about the impending expiry of your annual transfer fee.
They were not able to locate this FAQ on their side, so I’ve since sent this PDF to their customer service team for escalation, in expectation that they will refund me the fee. I will update you when this is resolved.
But in the meantime, if you are part of the old annual scheme you might want to take note that alerts are not going out. So be vigilant, check your account and let DBS know if you are charged without notice.
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.