Tag Archives: scb

What you need to know before you buy miles

On this site we’ve covered a lot of ways that you can earn miles through your everyday spend. But what if you’re still short and need to buy additional miles? Well, there are illegitimate and legitimate ways of going about that, but since we are all law abiding straight shooting citizens, we shall only discuss the legitimate options here (back alley, 10 minutes, trenchcoat and dark glasses)

When analyzing the new UOB PRVI Pay feature, I went a bit overboard and put together every opportunity I could think of to buy miles in order to see how the PRVI Pay measures up. Here’s what I made-

MethodTypeImplied Income ReqCents Per MileAnnual Limit
SCB VI Tax Payment- >$2K p.mPayment Facility1500001.14Tax bill
HSBC VI IRAS Payment- >$50K p.a (1)Payment Facility1200001.2Tax bill
HSBC Premier MC IRAS Payment (2)Payment Facility300001.25Tax bill
HSBC VI- Premier CustomerWelcome Gift1200001.3935000
HSBC VI IRAS Payment- <$50K p.aPayment Facility1200001.5Tax bill
SCB VI Tax Payment- <$2K p.mPayment Facility1500001.6Tax bill
SCB VIWelcome Gift1500001.6835000
HSBC Visa Plat/Revo Tax PaymentPayment Facility300001.75Tax bill
Citibank PM AMEXAnnual Fee800001.7815000
HSBC VI- Regular CustomerWelcome Gift1200001.8635000
iPayMy/Cardup with UOB PRVIPayment Facility500001.86Unlimited
UOB Reserve VI "Pay Anything"Payment FacilityInvitation1.9Unlimited
Citibank PM VisaAnnual Fee500001.9310000
DBS AltitudeAnnual Fee300001.9310000
OCBC Voyage- Option 3Annual Fee1200002500000
UOB PRVI PayPayment Facility50000 2Unlimited
OCBC Voyage- Option 2Annual Fee1200002.14150000
Citibank PrestigeAnnual Fee1200002.1425000
iPayMy/Cardup with DBS Altitude/Citibank PM VisaPayment Facility300002.17Unlimited
DBS Altitude- Tax PaymentPayment Facility300002.5Tax bill
OCBC Voyage- Option 1 (3)Annual Fee1200003.2515000
Buy from Singapore Airlines (4)Stupid05.51Unlimited

(1) The HSBC website says that $1=0.4 miles for tax payment facility, but I have received reports that VI holders have received 1/1.25 mpd as per their relationship bonus
(2)  The income requirement to get a HSBC Premier MC is $30,000, but you need $200K in deposits to open a HSBC Premier account
(3) OCBC Voyage Option 1 involves paying $488 to get 15,000 Voyage miles. These can be converted to Krisflyer miles at a 1:1 ratio but are technically more valuable than Krisflyer miles as they can also be used to pay for revenue fares at a fixed value per mile.
(4) SQ charges US$40 per 1,000 miles purchased. Price shown here is reflective of current exchange rates. The only way I could justify paying this is if I needed the miles right this minute, as SQ will credit them instantly

In the PRVI Pay article I decided to focus more on just PRVI Pay, but I think it’s good to have a separate article where we walk through the different options for buying miles and the pros and cons of each.

Things to consider when choosing among miles buying options

Not all the options in the table will be available to everyone. Therefore, just because a cheaper way of buying miles exists doesn’t imply you should rule out everything that costs more.

Which methods do I qualify for?

Basic, almost stupid question, but still important.

Unfortunately, you will need to command a pretty high income if you want to take advantage of some of the better miles buying deals. The cheapest deal now (if we ignore the bigass Citibank promo that, unfortunately, isn’t open to everyone) is 1.14 cpm via the SCB VI tax payment facility. If you spend more than $2K in a month on your SCB VI and put your tax bill on the card, you’ll earn 1.4 mpd for an admin fee of 1.6%. That requires you to earn a minimum of $150K a year though.

In fact, if I look at all the options available, the cheapest price you can access with an entry-level income is 1.75 cpm via the tax payment facility on the HSBC Visa Platinum/Revolution cards (HSBC Premier Mastercard has a $30K income requirement and lets you buy miles @ 1.25 cpm, but you need $200K in deposits with the bank to qualify for a Premier account). And even then the miles you can buy is limited by the amount of your tax bill.

A Cardup/iPayMy combination with UOB PRVI is probably your best bet if you need to buy a large quantum of miles and don’t earn in the 6 digits. Fortunately, UOB PRVI just reduced its income requirement from $80K to $50K so this method has become more accessible. Unfortunately, as I pointed out before, using Cardup/iPayMy requires a bona fide business expense like a tuition fee bill, condo management fee, tax bill etc. You can’t just send money to yourself.

You can send money to yourself via the UOB PRVI Pay feature, though. UOB doesn’t give two craps what you’re getting the money for- drugs, booze, humanitarian reasons. You just tell them how much and where to deposit the money, they bill your card for that amount + the 2% admin fee, you earn 1 mpd and everyone is happy. Assuming you’re ok with paying 2 cpm (see below)

What’s the limit I can buy/ how often can I exercise this option?

Another key question, because annual fees can only be paid once a year. Once I’ve paid the $192.60 on my DBS Altitude and got my 10K miles, I can’t do it again for another year (I could get the Visa and AMEX versions and pay the annual fee twice, of course, if I were so inclined).

You’ll also note that I’ve distinguished between “welcome gift” and “annual fee” in the table above. A welcome gift is a one time opportunity to purchase miles, which is subsequently not available. An annual fee can be paid each year. To my knowledge, HSBC VI does not give you renewal miles when you pay Year 2’s annual fee. SCB VI apparently offers 20,000 miles for paying Year 2’s annual fee, but that works out to 2.94 cpm which is too high for my liking. This should give people doubts about holding the card beyond the first year, unless you really dig the benefits.

Where tax payment facilities eg HSBC/SCB are concerned, I can’t simply go to them and say “hey, my tax bill is $500K, gimme.” I have to submit copies of my tax bill and they’ll give me miles based on that actual amount. No Citibank Rewards/AXS prepaying the gahmen’s working capital balance here (shhhh)

The only truly “unlimited” options (well, they’re limited by your credit limit) are

  • Buying at 1.9 cpm via UOB RVI’s Pay anything feature (but you need a huge chunk of income to access the UOB RVI…)
  • Buying at 2 cpm via UOB PRVI Pay (but is 2 cpm a good price?)
  • Buying at 1.86/2.17 cpm via Cardup/iPaymy and UOB PRVI/DBS Altitude (but requires a bona fide bill)
  • Buying at 5.51 cpm via SQ (lube up)

Should I be buying miles?

Image result for singapore airlines new first class

Maybe we should have started with this question.

Buying miles can certainly be a much cheaper option of getting business and first class flights. Take Singapore to Sydney, for example. Revenue tickets would cost you

  • Economy- $852 to $1,592
  • Premium Economy- $1,732
  • Business-$4,212
  • First-$8,412

If you use miles, on the other hand, you’d pay

  • Economy-56,000 miles + $162
  • Premium Economy- 90,000 miles + $162
  • Business- 116,000 miles + $162
  • First- 160,000 miles + $162

So depending on what price you pay for miles, there are potentially some sweet deals to be had. Here’s how buying a ticket compares to buying miles and redeeming, in the example of Sydney.

Note: for economy I took the straight average of fares available. Ratio refers to the ratio of the price you’d pay for miles compared to the revenue price

First and most important observation: this chart shows why it is totally not worth it to redeem miles for economy or premium economy. If you pay 2 cpm and redeem those miles for economy, you’re potentially paying even more than you would have if you bought that ticket outright. You can see that buying miles to redeem on business and first class is so much sweeter, even at the 2 cpm mark.

Second, this chart doesn’t reflect the value of certainty. Award flights may not always be available for immediate confirmation on the dates you need and for the number of seats you need. So, depending on how much you value certainty, you’d need to adjust the miles figures to reflect the cost you incur when you can’t get immediate confirmation. Waitlisting is, shall we say, not fun.

Third, you need to account for the value of miles you’d earn had you bought revenue tickets. This effectively acts as a rebate on the revenue ticket price, and will reduce it ever so slightly.

But, assuming you find yourself in a situation where instantly-confirmable award space is available, it absolutely makes sense to go the buying miles route. You’ll need to factor in the time lag between the time you buy the miles and booking the ticket though, during which the space may vanish (SQ doesn’t do award holds).

Should I be buying miles speculatively?

Image result for singapore airlines new business class

The previous question assumed that you had a planned use for miles in mind already. If that’s the case, and if the award space exists, you’d be a fool to pay full price rather than buying miles.

But what if you don’t have an upcoming trip planned? What if you’re pretty well-stocked already? This is a more complicated question.

Most of the miles laojiaos will tell you that you absolutely should not buy miles speculatively. And I’d tend to agree with them. Miles are the worst investment to hold. There is no deposit insurance. They do not earn interest. They can only be devalued, sometimes with short or little notice. Miles are only as valuable as airlines’ willingness to accept them. They’re pretty much a fiat currency. Earn and burn etc etc.

I would nuance that by saying you normally shouldn’t buy miles speculatively, but if an excellent opportunity comes around and you’re quite certain you’ll travel in the next 6 months then I wouldn’t feel too bad for loading up.

Case in point: the current insane Citibank Premiermiles visa offer to buy miles at 0.76 cents each is something I don’t think we’ll see again for a long time, so I’d definitely go for that if it were open to me.

I would also say that you should ideally have a healthy miles balance in your frequent flyer account to give yourself flexibility to make plans on the fly- there’s nothing more annoying (or nail biting) than to see award space on your perfect dates, transfer your points over and have a few nerve wracking days of F5-ing the screen waiting for them to appear. What’s healthy? For me that’s around the 100-150K mark, but I know it will be different for everyone (and that there will be those who believe in keeping even smaller amounts on hand).

Conclusion

For better or worse, SQ hasn’t attempted to monetize Krisflyer by selling miles on the cheap, like the US airlines have done. Therefore the best options for buying miles, at least for now, are offered through the banks. I hope this article gives you a better understanding of what’s out there, and what is (and isn’t) worth springing for.

What do you make of the new Standard Chartered Visa Infinite sign up offer?

I received a nice glossy mailer from Standard Chartered (getting snail mail makes me feel alive) advertising a new sign up offer for their Visa Infinite card.

Image result for standard chartered visa infinite

For successful applications approved before 17 June 2017, SCB is offering a choice of two promotions (T&C here)-

  • 86,000 miles with S$12,000 spending within 60 days of approval OR
  • 66,000 miles + 28 inch Samsonite bag with S$12,000 spending within 60 days of approval

The 35,000 mile welcome gift was always available with the payment of the $588.50 annual fee (SCB used to disclose the annual fee before GST but now includes it, as per their obligations under the income tax act. Sorry, but this always bugged the accountant in me), and the 36,000 base miles would have been yours anyway had you spent $12,000 overseas under the regular T&C of the card. Therefore, the real carrot they’re offering is the 15,000 miles you get when you spend S$12,000 within 60 days of approval.

I’ll have a fair amount of overseas spending on my upcoming RTW trip, and gave some serious thought as to whether I could make this work.

If I were to bring along my UOB Visa Signature card for my overseas spending, I’d be able to get 4 mpd on $2,000 a statement cycle for the 2 cycles I’ll be overseas for. That’s a total of 16,000 miles.

Assuming I spent the other $8,000 on my UOB PRVI Miles at 2.4 mpd, I’d end up with a total of 16,000 + 2.4 * 8,000=35,200 miles for $12,000 of overseas spending.

If I went with the SCB Visa Infinite, I’d end up with 86,000 miles but would be out of pocket $588.50 for the annual fee. So conceptually speaking, I’d be paying $588.50 for the ability to acquire 50,800 more miles than my best alternative. This is about 1.16 cpm, a fairly decent amount.

My actual outlay would be less than $588.50, however, given that SCB is running a rebate promotion with Uber until 30 Sept 2017 that gives you 20% cashback on your Uber (Eats + regular Uber) spending each month, up to $50. You need to spend at least $600 a month on your SCB card to qualify.

After this promotion ends, the SCB VI card still offers 10% cashback on Uber spending capped at $100 a calendar quarter and $400 a year.

I use Uber a lot for work, so assuming I could max out this promotion, I’d get $50*5 (May-Sept, 20% rebate promotion)+ $100 (Oct-Dec, 10% rebate regular) + $100 (Jan-Mar, 10% regular rebate) and a bit more for April to May before my annual fee is due again. That’s about $450 in value, which sounds so generous I’m starting to think I’ve not done this calculation properly*.  And I’d need to spend upwards of $3,250 on Uber in under a year. Which means I’d need to order dinner for quite a few people in the office…

*The T&C of the 20% Uber rebate promotion doesn’t specify how it interacts with the usual 10% rebate granted to the SCB VI card, but I think it’s safe to assume they don’t stack. Likewise, I’m not sure if the bonus cashback earned on the 20% promotion will count towards the $400 annual cap on the SCB VI. 

But assuming it does, and I max out at $400, that’s an actual outlay of just below $200 which makes the card more palatable.

Benefits of the SCB Visa Infinite Card

I’ve written about the perks of the Standard Chartered Visa Infinite before here, but I believe some additional benefits have been added since then. To recap, you get

  • 1.4 mpd for local spending and 3 mpd for overseas spending, provided you spend a minimum of S$2,000 in a statement cycle. If you don’t, you get 1 mpd for both
  • 6 free lounge visits a year via Priority Pass
  • A free 4 hour yacht charter for 14 people if you spend $75,000 in a year (worryingly, blackout periods and 20% peak period surcharges apply)
  • The Uber credits I mentioned above

But then I asked Jeriel what he thought and he reminded me of what I’ve told many a person- don’t acquire miles speculatively. Thanks to our good friend the HSBC Advance card, I have a sizable amount of unconverted points with no travel plans in the near future. So the more I think about it, the more I can’t really justify paying the annual fee.

What does this mean for your sign up bonus strategy?

However, if you’ve got upcoming big ticket purchases (and meet the minimum income requirement of $150K per annum) you may want to consider this card. Note that if you spent that $12,000 locally instead of overseas, you’d end up with 35,000 (joining gift) + 15,000 (bonus) + 16,800 (base miles @ 1.4 mpd)= 66,800 miles from $12,588.50 of spend.

What other options do you have?

  • If you’re not already a Citibank credit card holder, you can get the Premiermiles card and spend $10,192.60 (including $192.60 annual fee) within 3 months of obtaining the card to get 42,000 miles
  • You could get the AMEX Rewards card, spend $1,535.50 (including $53.50 annual fee) within 3 months to get 13,333 miles
  • You could get the DBS Altitude Visa card, spend $2,000 ($1,000 a month for 2 months) to get 10,000 miles (for new DBS/POSB cardholders. Existing get 7,000)
  • You could get the Krisflyer Ascend card, spend $6,337.50 (including $337.50 annual fee) in the first 3 months after approval and get 20,000 miles (but please, don’t use the card after that)

This means that in theory, someone with an upcoming spend of ~$31,500 (renovation, wedding, paternity suit) could get just over 170,000 miles if they time their sign up bonuses just right (and were willing to pay a total of $1,172.10 in annual fees).

So I’ll probably not go for this sign up offer, but anyone who has upcoming big spending might want to see if they can build a strategy around this.

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?