Why the HSBC Advance card may be worth the hassle

Since discovering the Miles and Points game 3 years ago, Jeriel has now spent a disproportionate amount of time reading the T&Cs of credit cards and frequent flyer programs. His grand plans for round-the-world premium travel has taken a hit since the arrival of his daughter, but he is still determined to fly as far, frequently and luxuriously as possible on Miles and Points. Expect more family-orientated trip reports and travel tips from him!

The HSBC Advance Visa Platinum – Worth the Hassle?

If you are just starting out on this miles and points endeavour, you’d soon realize that juggling a portfolio of >10 active cards (and even more inactive sock drawer cards) may start to get a little confusing. Each card usually has 1 or 2 specific uses, and some of these uses may overlap with each other. Perhaps the most frustrating aspect is trying to explain to and convince your spouse to adhere to the myriad of ‘rules’ of the game.

To be successful, it is essential to have a good game-plan; a streamlined strategy.

The optimum strategy minimizes the number of cards one has to carry on a day to day basis, and limits the decision making process at the point of sale to 2, if not 3 steps maximum. All this, while maximizing the number of miles or points earned.

There is no one-size-fits-all solution, and best strategy for you entirely depends on your spending patterns and habits. However, it is obvious that you should try to find a card which offers the maximum rewards bonus (in Singapore, this will generally be 10x rewards points, usually equivalent to 4 miles per dollar spent) for the most number of spending categories.

Well, the HSBC Advance Visa Platinum (AVP) seems to fit the bill perfectly.

Aaron had briefly touched on this card awhile back in his article on Dining cards in Singapore. Yes, the HSBC AVP does award 10x points for all dining spend (based on merchant coding) in Singapore. However, the 10x point bonus also applies to online spending, and spending on merchants with entertainment listed as their main business.

Features (with the main exclusions) of the HSBC AVP Card.

Of course, they come with certain exclusions, the main ones listed in the extract from HSBC Singapore’s website above. For the exact terms and conditions, they can be found here. But all things considered, this seems pretty generous.

For starters, there is no mention of a spending cap for online spend, which expressively includes airline and hotel purchases, and even insurance payments. EZ-link/Transitlink transactions do have a cap of S$200 a month, but that is the only exception. Buying airfare and accommodation for your whole family, or perhaps an S$20,000 round-the-world business class ticket? No sweat. This is in contrast to the other options – DBS’ Women’s World MasterCard has online spend capped at S$2000 a month, and DBS’ Altitude Series only gives 3 miles / dollar and has a cap of S$5000 a month (from 1 June onwards).

Secondly, the AVP seems to be a potential successor for the now dead (?) UOB Preferred Platinum Amex. It has similar terms to the UOB PPAmex, awarding 10x points based on the MCC of the establishment. Of note, this only applies to local dining, as opposed to worldwide dining for the UOB PPA.

If you are the chiongster kind, or frequent pubs often, the bonus points for entertainment will come in handy as well. No free club entry, 1-for-1 drinks or similar perks, but I’d take more points over rewards-in-kind any day.

To top it off with a cherry on top, annual income requirements are ridiculously low at S$30,000 p.a. for Singaporeans and PRs, and S$40,000 p.a. for foreigners. Not forgetting the perpetual annual fee waiver as well. A bit of a moot point given that an annual fee waiver is usually just a short phone call away, but it does save you that 5 minutes of annual irritation. 😀

Now we get to the interesting part. What is the catch? Simple, you’d have to be a HSBC Advance Account holder first.

The HSBC Advance Account is something like an entry-level preferred banking account with HSBC. The Relationship Balance requirement (bank parlance for amount of money you park with them) is a princely sum of S$30,000. (For home mortgage account holders with HSBC, your initial loan quantum must be at least S$200,000). This is in contrast to other banks’ preferred banking programs (including HSBC’s own Premier Banking) which usually require a Relationship Balance requirement north of S$200,000. In return for maintaining this S$30,000 with them, you get the following perks;

HSBC Advance Account Perks

What you’re done reading that already? Sorry, I must have fell asleep. Yeah, nothing much exciting there.

TL;DR – Park S$30,000 with HSBC and you get the HSBC AVP Card.

Unless you already have a qualifying Relationship Balance with HSBC, the million dollar question (or in this case, the $30k question) naturally will be – is the hassle (going through all that bank admin) and opportunity cost of parking S$30k with HSBC worth getting the card?

The answer, without fail, is that it depends.

I have been eyeing this card for about half a year now, and am still yet to take the plunge. Let me share a few of my reservations.

1. Money, Money, Money

Do you even have S$30k lying around? Obviously not an option if your savings are still non-existent, or if you need the cash eminently for some massive spending.

2. Opportunity Cost

If you have S$30k lying around, why do you have S$30k lying around?! It is certainly not a small sum of money and instead of lying in a bank doing nothing, it could be (and should have been) put to work earning you some interest in a fixed deposit (if you are risk-adverse) or flipping some profits in the stock market.

3. Better Options?

I already have the UOB Preferred Platinum Amex for dining, and between the DBS Women’s World MC, DBS Altitude, UOB Preferred Platinum Visa and Citibank Rewards series, my online purchases are almost completely covered. Do I really need another card?

4. Lack of Good General Spend HSBC Card

A big part of miles and points strategy is trying to consolidate your points earned into as little banks as possible so that you don’t end up with ‘orphan’ miles or points – a negligible balance of points in an obscure bank not worth paying the transfer fee for. Having an equal number of points spread across all 5 to 6 banks isn’t wise as well, as you’d end up paying 5 to 6 different transfer fees to convert them to usable miles. These can add up to a significant amount. Bulk of my points are with DBS and UOB because of their solid general spend cards (the DBS Altitude and UOB Prvimiles Card respectively). Will adding HSBC to the fray complicate matters unnecessarily?

Of late, I’ve found myself running out of excuses to not get this card though. Let me refute my own arguments.

1. Money, Money, Money

S$30k may be hard to come by, but HSBC does provide a grace period to hit the minimum Relationship Balance. If you credit your monthly salary (minimum of S$3750/month) or make a recurring monthly deposit of at least S$2500/month, you will be given a 24 month grace period to hit the required amount.

Even if you don’t want to change the account your salary is credited to now, setting up a recurring transfer isn’t too much of a hassle. Correct me if I’m wrong but I don’t see any clause prohibiting you from transferring that S$2500 right back, so at the very least you get to use the card for 24 months. 😀

2. Opportunity Cost

Most financial planners would advocate you setting aside a sum of money in cash or liquid assets (usually a few months’ worth of expenditure) as an emergency or rainy day fund. In addition, it is also generally prudent to spread your investment portfolio across a spectrum of high to low risk products.

HSBC does have a portfolio of Timed-Deposit products, and also run occasional promotions which are worth taking a look at. The current promo runs till 31^st May and offers a 1.5% p.a. interest for a 7-month timed-deposit for HSBC Advance account holders. These investment options are worth taking a look at.

Disclaimer: I am in no way a qualified or trained financial advisor; the above represents my own personal views on money management and investments, and do not constitute financial advice. I also do not have any vested interest in HSBC in any way.

3. Better Options?

The UOB Preferred Platinum Amex is a great card for dining, but it does irritate me sometimes. It is no secret that in Singapore, Visa is accepted at a greater number of merchants than Amex. Also, the rule which divides points earned on UOB cards into blocks of S$5 is probably negligible in the grand scheme of things, but frustrates me to no end when the bill for my meal ends up being something like S$39.99.

There are many cards for online spend, but in practice, many of them impose many restrictions on what qualifies for the bonus 10x points. The DBS Women’s World MC is well known for being the most inclusive, but it has a monthly cap of S$2000. How inclusive is HSBC’s policy? I do not yet own the card and it is difficult for me to deliver a verdict, but here is where the collective experience of the internet can be very helpful.

4. Lack of Good General Spend HSBC Card

You’d really only need one good general spend card, and if you plan your expenses well, you usually shouldn’t even need to use your general spend card much. If HSBC can replace either DBS or UOB as one of my main points accounts, then this is definitely a card worth getting despite the lack of a good general spending or traditional ‘miles’ card.

In conclusion, I am tending towards replacing UOB with HSBC as one of my 2 main points accounts. The HSBC AVP can very potentially replace both cards in the UOB Preferred Platinum series.

What do you think? Do you already own the HSBC Advance Platinum Visa Card? What is your experience with the inclusions and exclusions of the dining, online and entertainment categories? Do share in the comment section below!