The UOB Payment Facility is a no-questions-asked way to buy miles through your credit card. In theory, you use it to pay expenses like rent, taxes or insurance premiums.
In reality, UOB doesn’t give a hoot about what you’re doing. You could be paying daycare fees or buying weapons grade uranium- so long as it’s within your credit limit, it’s fine by the bank. When they say “pay anything”, they really mean it.
UOB has now launched a limited-time discount on the UOB Payment Facility, lowering the cost of buying miles.
UOB Payment Facility Promotion
From 23 April to 30 June 2021, UOB is offering a discounted admin fee on any amount paid through the UOB Payment Facility in a one-time payment. The fee varies depending on the card you hold:
The full T&Cs of this offer can be found here.
All payments made via the UOB Payment Facility earn a flat rate of UNI$2.5 for every S$5 approved, regardless of card. This works out to 1 mpd, with the usual caveat that your transaction is rounded down to the nearest S$5. In other words, a S$1,009 payment earns the same UNI$ as a S$1,005 payment, so do all your charging in blocks of S$5.
Your cost per mile is basically the admin fee, e.g 1.9% means 1.9 cents per mile.
How does the UOB Payment Facility work?
To illustrate, let’s say you hold a UOB PRVI Miles Card and want to buy 5,000 miles. Here’s how the process works:
- Fill out the online application form for the UOB Payment Facility
- UOB charges your card for S$5,000, plus an admin fee of 1.9% (i.e S$5,095 total)
- UOB deposits S$5,000 cash into your designated bank account. The bank account need not be with UOB; you can choose pretty much any bank in Singapore
- UOB awards you UNI$2,500 (note that the admin fee does not earn UNI$), which is equal to 5,000 miles
- Your net out of pocket cost is the admin fee of S$95, for which you received 5,000 miles. Your cost per mile is therefore 1.9 cents each
Applications are processed within 10-12 working days. For the abovementioned offer, your application must be approved by 30 June 2021, so don’t leave it till the last minute to apply.
Should I use this to pay my taxes?
Nope. If you’re holding on to a UOB credit card, you’d do much better by taking advantage of the CardUp income tax payment promotion, which allows you to pay taxes at just 1.75% (use promo code MLTAX2021)
Hold up, isn’t the fee for UOB Reserve cardholders 1.7%? Yes, but you need to factor in the earn rate too. Remember, all UOB cards earn a flat rate of 1 mpd with the UOB Payment Facility. However, they will earn their regular rate of 1.2-1.6 mpd with CardUp.
Do the math, and you get the following:
Of course, let’s not forget that if you hold a Citi ULTIMA, Prestige or PremierMiles Card, you can earn 2.5 mpd on any kind of Citi PayAll payment with a 2% fee up till 31 August 2021- effectively paying 0.8 cents per mile. That has to be the best offer on the market at the moment, should you have those cards.
The main hitch is that Citi PayAll requires you to make a bona fide payment to a third party; you’re not allowed to pay yourself. Sure, the categories are nebulous, and you could conceivably get a family member to charge you for enrichment services or something like that, but there may be tax consequences arising from such a transaction.
On the other hand, the UOB Payment Facility has no such compunctions. It’s the most straightforward way to buy miles if you don’t have any payments due to third parties.
1.7 to 1.9 cents per mile certainly isn’t the cheapest price on the market; if you have tax payments (or really, any kind of payment) to make, you can buy cheaper miles with CardUp, or Citibank cards and Citi PayAll.
Therefore, the UOB Payment Facility is best thought of as a fallback option, in situations where you’ve already exhausted all the other avenues.