Tag Archives: uob

An open letter to the influencers who promoted the Krisflyer UOB account

Dear fellow influencers,

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!


Dear ladyironchef

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 cardwithout 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.


Dear melissackoh

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.


Dear bellywellyjelly

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?


Dear thetravelintern

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.

Excelsior!
The Milelion

UOB defends the Krisflyer account while missing the point (edit: original article added)

Source: Business Times © Singapore Press Holdings Limited. Permission required for reproduction

[Edit: Here’s the original article for those of you who don’t have a subscription to the BT. Cost me $72.76. You’re welcome]

Download (PDF, 6.23MB)

Well, that escalated quickly.

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.

Suppose you’re a Poly grad- what then? You’d still be well within the income requirement needed for a credit card. Take a look at these MOM-published starting salaries for poly folks

Download (XLSX, 38KB)

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.

If you spent that same S$1K a month on an entry-level credit card like the DBS Altitude (min income: S$30K, 1.2 mpd on general spending), you’d be just 3K miles short of the 15K needed for a return trip to Bali on SQ.

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.

But wait! If I were to sign up for an OCBC Voyage Card and take the S$3,210 annual fee offer, I’d get 150K Krisflyer miles (never thought I’d see the day I used this card as a good example!). Then I could sign up for a Citibank Premiermiles card and, assuming I’m a new customer, get 42K miles for spending S$10K in the first 3 months and paying an annual fee of S$192.60.

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.

The Krisflyer UOB Account is Dead on Arrival (updated)

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

Features
-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-

click to enlarge

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-

click to enlarge

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?

Is there an upside?

It’s really, really hard to think of anything good that can come out of this. But HWZ user dahnoob has a decent idea-

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))
  • Young professionals who can’t get a “proper” miles earning card? (Now that the DBS Altitude income requirement is only $30K this doesn’t hold water)
  • 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.