One of
our goals is to accumulate enough miles to fly to the United States in
Singapore Airlines Suites for our honeymoon - once in a lifetime experience! We have finally turned that dream into a reality after 1.5 years of hard work (having > 10 credit cards and using the right credit card on the right occasion) with a confirmed Suites booking.
The last time we used miles for our flight -
KrisFlyer 50% Redemption Promotion on SilkAir, the cashback equivalent for our return Economy SilkAir flight to Bandung was around
6.5%. What about this time round?
2 one way ticket to New York, John F. Kennedy International Airport can be redeemed for 240,000 KrisFlyer miles + $259.60! Let's take a look at how much it would cost to purchase the exact same ticket/flight for the same day.
Total fare (all in) would have been $23,419.60! We will never pay this amount of money for a flight! The correct way to generate/accumulate miles is to do it through specialized spending (paywave, dining and online) where one will be earning 4 miles per dollar.
As you can see, the miles earned on average till date is about 4 miles per dollar. The reason why UOB and Citi are below 4 is that there are general spending credit cards (UOB PRVI Miles and Citi Premier Miles) giving about 1.2 - 1.4 miles per dollar. SCB is on a different level because we simply signed up for the Visa Infinite card and paid the annual fee without any spending.
With this assumption, the estimated spending would be around $60,000 (240,000 / 4).
Simple maths:
240,000 miles = $23,160 ($23,419.60 - $259.60)
Cashback equivalent: $23,160 / $60,000 =
38.6%
Wahahahaha. Can cashback card beat that? Milelion shifu/master has already written an article about it so I will not go down that path -
The ugly truth of cashback cards banks don’t want you to know.
Our miles journey started March 2016 and our 1st card was AMEX Ascend.
During this period, we had quite a few major expenses such as CZM's ring, wedding banquet, those holidays to London, Iceland, Paris, Hong Kong and Bandung, etc. that gave us the opportunity to accumulate miles at a much faster. We have to thank our parents as well whenever they take out cash to make payment, it will be intercepted by us and replace with our credit card. lol.
The question is should you cancel all your cashback credit card and start accumulating miles? My answer would be nope! Similar to all financial decisions, there is no one/best way to go about doing things. Before we started, we spent hours reading all the articles in Milelion to ensure that we know what we are getting into!
Miles may not be suitable for you due to the following reasons:
1. There is an expiry to it and we know cashback does not expire (but there is a cap/limit). lol. If you cannot generate miles fast enough, it might not be ideal for you. Credit card points expire around 1/2 years so you have to transfer the points out to KrisFlyer miles which has an expiry of 3 years. In total, the lifespan of miles would be around 4-5 years.
2. Devaluation of miles! Collecting miles would mean you will be at the mercy of the airlines. Our initial goal was to get return tickets to the United States but SQ devalued its KrisFlyer earlier this year which I blogged about previously -
Felt Cheated by OCBC & SIA on the Same Day. In the end, we got to change our plan instead to one-way tickets.
3. Big family. First class/business ticket for your child/children does not really make sense.
4. You prefer to have only 1/2 credit cards for whatever reasons (too many cards make the wallet fat, forget to pay bills, etc.) because the common misconception is that people think they can accumulate miles with just 1 credit card. Sure, never say never :)
5. It is your principles in life that you will NEVER EVER pay any credit card annual fee. It is perfectly normal, we used to think that way too. However, playing the miles game would require you to do that because that is the best arbitrage opportunity! KPO simply cannot resist the thought of paying $2 for a $10 service.
The simple maths behind paying for annual fee:
Citi Premier Miles: $192.60 / 10,000 miles = 1.926 cents per mile
SCB Visa Infinite: $538.5 / 35,000 miles = 1.539 cents per mile
Singapore Airlines Suites: $23,160 / 240,000 miles = 9.65 cents per mile
6. Last but not least, "I am not interested in flying First Class/Business, Economy will bring me from point A to B just fine". The choice is obvious then. Stick to your cashback cards :)
Having said that, we do have cashback card where we make sure that we spent at least $500 on our OCBC cards every month to get the additional interest and everything else goes into miles. Who says one cannot have the best of both world? Hahahaha.
Hope that this article will encourage you guys to start playing the miles game or reinforce your plan to continue using cashback cards. No right or wrong :)
Time to research on what are the must do, must eat, must visit places in the US! We also need to look for a cheap economy ticket back... Hahaha.
