Buying miles through credit cards

MethodIncome RequiredCPMAnnual Miles Limit
SCB Visa Infinite Tax Payment (Spend >$2K p.m)$150K1.14Tax bill
UOB Reserve/DBS Insignia with RentHeroInvitation1.14Rental amount
HSBC Visa Infinite Tax Payment (Spend >$50K p.a in prev year)$120K1.2Tax bill
BOC Elite Miles World Mastercard with RentHero$30K1.21Rental amount
HSBC Premier MC Tax PaymentAUM: $200K1.25Tax bill
Citi PayAll with Citi UltimaInvitation1.25Bill amount
UOB PRVI Miles/SCB Visa Infinite (>$2K p.m)/UOB Visa Infinite Metal with RentHeroUOB PRVI Miles: $30K
SCB Visa Infinite/ UOB Reserve: $150K
1.30Bill amount
HSBC Visa Infinite Welcome Gift- Premier customer$120K + AUM $200K1.3935K
SC EasyBill with SCB Visa Infinite (Spend >$2K p.m)$150K1.43Bill amount
HSBC Visa Infinite Tax Payment (Spend <$50K p.a in prev year)$120K1.5Tax bill
DBS Altitude with RentHero$30K1.51Rental amount
Citi PayAll with Citi Prestige/Citi PremierMiles AMEXCiti Prestige: $120K
Citi PremierMiles AMEX: $80K
1.54Bill amount
SCB Visa Infinite Tax Payment (Spend <$2K p.m)$150K1.6Tax bill
Citi PayAll with Citi PremierMiles Visa$30K1.67Bill amount
SCB Visa Infinite Welcome Gift$150K1.6835K
CardUp with BOC Elite Miles World Mastercard$30K1.69Bill amount
HSBC Visa Plat/Revolution Tax Payment$30K1.75Tax bill
Citibank PremierMiles AMEX Annual Fee$80K1.7815K
Cardup with UOB PRVI Miles$30K1.81Bill amount
HSBC Visa Infinite Welcome Gift- Regular Customer$120K1.8635K
OCBC VOYAGE Tax Payment$120K1.9Tax bill
UOB Reserve VI Payment FacilityInvitation1.9Unlimited
Citibank PremierMiles Visa, DBS Altitude, KrisFlyer UOB Card, OCBC 90N Annual Fee$30K1.9310K
OCBC VOYAGE Payment Facility$120K1.9 or 1.95Unlimited
UOB VI Metal Payment Facility$150K2.0Unlimited
UOB PRVI Pay Facility$30K2.0 (until 31 Dec 19)Unlimited
SC EasyBill with SCB Visa Infinite (Spend <$2K p.m)$150K2.0Bill amount
Cardup with DBS Altitude/Citibank PM Visa$30K2.11Bill amount
OCBC VOYAGE Annual Fee- Option 2$120K2.14150K
Citi Prestige Annual Fee$120K2.1425K
DBS Altitude Tax Payment$30K2.5Tax bill
OCBC VOYAGE Annual Fee- Option 1$120K3.2515K

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.

CardUp 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 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 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?

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.

16 comments

  1. Hi Aaron, can you give your views on the standard chartered visa infinite card? it’s currently giving 35000 miles for $588.50. I dont like paying annual fees but it does sound like a good piece of business? Previously, they were giving first year waiver (without miles) , but now that option is no longer available. I like the 6x/yr priority pass (can use for the whole family) as well as the 2x/mth fullerton spa access. I find the min. $2k spend per month a bit challenging though. My job don’t require me to travel hence I wont have much overseas spend. Maybe the twice a year holiday and yearly overseas conference to attend. Hope to hear your thoughts before I throw in my application though. Thank you.

  2. Just an update – the Citibank PM Amex AF has been revised to $250 ($267.5 with gst) but comes with 15,000 miles. Noticed this in my latest statement when the PM Amex AF was charged.

  3. Hi Aaron,

    The unlimited lounge access for ANZ has been revised and now it is not worth the time.

    it goes by quater and min of 10k spending on the card before a code is given to you for lounge access. Also, they have changed lounge membership. i did not read further, turned off by the 10k min spending.

  4. Hi Aaron,

    Thank you so much for sharing all these info, I benefit greatly from what you share.
    Please continue your great work and hopefully you can update them when you got the time.

    Can you kindly share abit more on your ” No Citibank Rewards/AXS prepaying the gahmen’s working capital balance here (shhhh) ” ?

    Thank you very much , Cheers 🙂

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