Hi Aaron, congratulations on The Milelion hitting the one-year milestone! As a soon-to-be-married couple, we are really excited to get your thoughts on how we can maximise the big spends that come with Weddings (and for most Singaporean couples, house renovation). I’m sure many of our readers would also be interested to know more on how they can potentially score a nice honeymoon trip by spending smartly with credit cards.
Image: View from Conrad Koh Samui
- Tell us a little about The Milelion and why readers should care about accumulating miles? After all, cashback cards have been all the rage these days.
The Milelion is a travel hacking site I set up to help people travel better for less. I’ve written articles teaching people how to maximize credit card sign up bonuses, game airline and hotel loyalty programs and little-known ways of saving money while not compromising on comfort. The The Milelion has unlocked luxury travel experiences for many people, regardless of income.
My philosophy towards credit card rewards is simple: Miles always beat cashback. Always.
Miles are the best reward because banks buy them cheap from the airlines, and it’s the airlines’ problem how you redeem them. Cashback, on the other hand, comes directly out of the bank’s pocket and you can bet they’ll fight you tooth and nail to hold on to it. That’s why cashback cards have so many conditions.
More specifically, cashback cards aren’t a good idea if you have big wedding spend because the amount of cashback you earn is often capped at a very low amount. I mean, suppose you’re spending $10,000 on your wedding. What kind of cashback would you get? AMEX True Cashback? $150. UOB One Card? $120. OCBC 365? $30. And that’s all assuming you’re still within the first year fee waiver period, mind you. If not, you’re in a loss position until you earn back at least your annual fee, and then you’re simply back where you started. It’s crazy, and it’s a bad deal.
Miles cards are a much sweeter deal. Spend above a certain threshold? Great, get an annual fee waiver. Don’t? It’s ok, we’ll give you some miles. The mile to annual fee ratio is equivalent to buying miles at 2 or less than 2 cents each, which is still a lot better than what cashback cards propose. Either way you’re safe.If you spent that $10,000 with a miles earning credit card you’d be looking at at least 14,000 miles. And that’s only the base. With bonuses you could be closer to 25,000 miles. Those miles can get you and your spouse to Bali and back. That’s worth a heck of a lot more than $150.
- Please share: the trip you’re most proud of that you’ve achieved with travel hacking, why, and how you achieved it?
It would probably be the trip to Paris with my girlfriend in August last year. We flew there in SQ Suites,which we redeemed using miles I had earned from business travel and carefully planning my personal spending across many different cards. We stayed in very nice hotels, using the hotel points I had accumulated from doing various challenges and promotions (and elite status from several little-known shortcuts). And we booked the cheapest car class and got upgraded to a Volvo X90 SUV thanks to rental car status I got for free. All in all our cash outflow was about the same amount people pay to backpack.
Image: Mr and Ms Milelion enjoying the fruits of their labour 😉
- This sounds almost too good to be true. What’s the catch?
Well you need to be willing to put in the effort to manage your credit card portfolio. It involves applying for and carrying multiple cards, remembering which cards to use when, remembering what has been spent on which card, setting up GIRO for different cards so as not to miss payments, cancelling unused cards in time to avoid annual fees… It’s not difficult if you’re naturally a disciplined person (and if your partner isn’t disciplined, well, good time to start working on that!)
- What advice do you have for couples just kickstarting miles accumulation with their credit cards?
Each of you should build your own miles portfolio so you can enjoy the same bonus twice. For example, it makes more sense for each of you to get an American Express Rewards card and spend $1,500 within 3 months to get 13,333 miles each than for one of you to get the card and give a supplementary card to his/her spouse. Sit down and talk about anticipated big ticket items that will come out of both your pockets and strategise who spends what to maximize your earnings.
- Is there a minimum combined income level necessary to go down this route of miles accumulation?
Yes and no. If you want to buy miles through annual fees, some of the best credit cards for buying miles through annual fees (such as the Standard Chartered Visa Infinite card or the Citibank Prestige card) require income in excess of $120,000-$150,000. However, there are other great miles earning cards which income requirement is set at the bare minimum as stipulated by MAS, ie $30,000. The DBS Altitude (both the AMEX and Visa versions), the DBS Woman’s Card, the UOB Preferred Platinum AMEX (which contrary to popular belief can still be applied for here) are some examples of this.
Image: View of SQ First Class Lounge
- What should people look out for in a miles earning credit card?
There are 3 things that you should look at when assessing any new miles card
a. Earn Rate and Bonuses
This is the bread and butter of any miles card. The higher the earn rate the better, but don’t forget about sign up bonuses.
The generous promotion on the DBS Altitude AMEX, for example, should convince you to get that over the UOB PRVI Miles card (despite the PRIV’s superior 1.4 miles per S$1 of local spend)
This may also convince you to take up an otherwise crappy card, like the AMEX Rewards card ($1,500 spend over 3 months gets you 13,333 Krisflyer miles), get the bonus and then dump it.
b. Conversion Fee and Blocks
This impacts how quickly you can cash out your miles. DBS and UOB require you to have a minimum equivalent of 10,000 miles in your rewards account before you can transfer, whereas Citibank allows it for as little as 500. All things equal, smaller conversion blocks give your miles more liquidity.
There are 2 main models of conversion fees in Singapore- per annum and per transaction. DBS charges you $42.80 for unlimited conversions for a year. UOB/Citibank charge you a flat fee of $25 every time you convert.
Each model has its own advantages, but some people like to keep their powder dry for one big, occasional transfer.
c. Ancillary Benefits
Does the card provide you with limo transfer? What about lounge access? If lounge access is provided via a third party like Priority Pass, how many free visits do you get in a year? All these can save you some money over the course of a year
Image: Lounging at Conrad Koh Samui
- Do you have a final piece of advice for couples on Miles Accumulation?
Start early, spend often! Miles have no value until they are used. And they are the worst investment to hold- they do not earn interest and they can only ever lose value (through devaluations when airline raise their redemption rates, as SQ did recently)
Don’t spend for the sake of earning miles. Remember that you’re just starting out in life and there will be many major expenses ahead (and opportunities to earn miles along the way). If someone offers you a big discount for paying in cash, do the math and be rational.
And please, please do not carry a balance on your credit card account. Use your credit card as you would a debit card- do not spend more money than you have.
The Milelion is your guide to travelling better for less! Learn which miles cards to get, how to spend those miles and little-known loopholes to get great deals wherever you travel. Read reviews of the great hotel and airline experiences you can have with those miles and points. Can’t find what you need? Just ask them!
The Milelion has been featured in Zaobao and The Straits Times. Find out more about them here!
All pictures in this post are credited to The Milelion.