How To Maximise Rewards With Grab

This post was originally published on my website at thefrugalstudent.com.

Grab is a big part of our lives here in Singapore and almost every household uses it in some way.

Be it Grab rides, GrabFood, or GrabPay, we will need to make payments via the Grab platform whenever we use it.

Every payment we make is an opportunity to earn rewards, and the method of payment we use will determine how much we earn in rewards from each transaction.

In this post, I will share how you can maximise the rewards earned while using Grab.

Payment Methods

First, I will go over the payment methods that are available on Grab.

GrabPay Wallet

The first method of payment available on Grab is via the GrabPay wallet, Grab's e-wallet.

In order to use the GrabPay wallet, you'll need to fund it with cash.

This can be done via a credit/debit card, PayNow, or a bank transfer.

Typically, you don't earn any rewards for topping up your GrabPay wallet.

However, there are a few cards that do award rewards for GrabPay top-ups, namely:

• AMEX True Cashback Credit Card
• UOB Absolute Credit Card
• Standard Chartered Cashback Debit Card

If you use any of these cards to make top-ups, you'll earn cashback from the top-ups at rates of 1.5%, 1.7%, and 1% respectively.

Both the credit cards are entry-level credit cards that you can apply for if you have an annual income of at least S$30k.

You can check out this post to find out more about these credit cards.

The Standard Chartered Cashback card is the debit card that comes together with the Jumpstart savings account.

This is the only way to earn rewards for topping up your GrabPay wallet - doing so via other cards, PayNow, or bank transfer will not earn any rewards.

Also, note that topping up your GrabPay wallet with a Visa card will incur a fee of $1.

The cards listed above are AMEX and Mastercard cards, so they won't incur this fee.

Regardless of how you top up your GrabPay wallet, when you finally make payments via your GrabPay wallet, you will earn rewards in the form of GrabRewards (GR) points.

But if you use any of the 3 cards mentioned above, you will earn cashback on top of the GR points that you are due.

Payments made via the GrabPay wallet earn the most number of GR points per transaction, ranging from 3 ~ 6 points/$1.

The conversion of GR points to cashback will be explained later.

Credit/Debit Card

If you don't fancy the idea of needing to top-up your GrabPay wallet and paying via GrabPay, you can also pay directly via a credit or debit card.

These transactions qualify as online expenses, so if the card you use to make payments would earn rewards for online transactions, you will earn the respective card rewards.

For example, the HSBC Revolution card earns 4 miles per dollar (mpd) on online transactions.

So paying on Grab with an HSBC Revolution card will earn 4 mpd.

However, if online transactions don't qualify for rewards on the card you use, then you won't earn any card rewards for transactions.

Regardless of the card you use to make payments, you will earn GR points for each transaction, ranging from 1 ~ 2 points/$1.

Cash

Finally, if you're not into cashless payments, you can choose to make payments with cash.

You don't get to earn any rewards for paying with cash - not even GR points.

GrabRewards Membership Tier

Next, your GrabRewards membership tier will determine how many GR points you earn per dollar spent for GrabPay wallet and card payments.

So this is important to consider when trying to find out how to maximise your rewards while spending with Grab.

There are 4 different membership tiers: Member, Silver, Gold, and Platinum.

Your membership tier improves if you accumulate a certain amount of GR points within a specific period of time.

The number of GR points earned by each membership tier and payment method is consolidated below.

GrabPay wallet:

Credit/Debit card:

The earn rate for GR points is the same for Member and Silver tiers, so only 1 is displayed.

The cashback % is calculated based on how much spending is required to earn enough points to redeem a voucher with GR points.

This is calculated from typical earn rates and exchange rates where 2500 GR points can be redeemed for a $5 voucher.

For example, you would need to spend 2500/6 = $416.67 via GrabPay wallet to earn 2500 GR points as a Platinum member.

So the effective cashback rate is $5/$416.67 = 1.2%.

How To Maximise Rewards

Finally, let's get to how you can maximise the rewards you earn while using Grab.

That is, comparing whether you should make payments on Grab via the GrabPay wallet or a credit/debit card.

To do this comparison, I will first assume that you're a Platinum member because the disparity in rewards rate between the 2 payment methods is the highest for Platinum members at 0.8%.

Next, I will also assume that for GrabPay wallet payments, top-ups are made with any of the 3 cards that award cashback for top-ups, which I mentioned earlier in this post.

Depending on which card is used, the effective rewards rate for GrabPay payments for Platinum members ranges from 2.2% - 2.9% (1.2% + (1 - 1.7%)).

This makes the disparity in rewards rate between the payment methods range from 1.8% - 2.5%.

So if the payment method used is a credit/debit card and if the rewards rate of the card is higher than 1.8% - 2.5%, then it will be superior to GrabPay as a payment method.

Otherwise, GrabPay is the preferred method of payment.

To analyse this more thoroughly, I will do separate analyses for students and working adults.

This is because students only have access to debit cards while adults have access to credit cards which often offer higher rewards rates.

Students

Again, students only have access to debit cards.

Even though student credit cards are available, they do not offer better rewards rates than the debit cards that are already available to students, so they will be ignored.

GrabPay Payments

Assuming all GrabPay wallet top-ups are made with the Standard Chartered Cashback debit card that awards 1% cashback, the total rewards rate is 2.2% (1% + 1.2%).

Debit Card Payments

The debit card that offers the highest rewards rate is the DBS Visa debit card.

It awards different rates of cashback on a variety of categories, as stated below:

• 4% for online food delivery
• 3% for online transport (ride-hailing, taxis, SimplyGo)
• 2% for FX spending including online spending

While these rates are fairly high for a debit card, it comes with a monthly spending requirement of $500, which is quite high in my opinion.

Also, the high rates are only for very select categories.

So the amount of cashback you actually earn may be low if the eligible categories only make up a small fraction of the total amount you spend on the card.

To put it in perspective, say you spend $80 on transport and $100 on food delivery every month.

The amount of cashback you'll earn is $6.40.

Assuming you spend exactly $500, the effective cashback rate is 1.28%.

This level of spending is just an estimate, but it gives you an idea of how low the effective cashback rate can be if you're not spending a high amount on the selected categories.

Given this cashback rate, the total rewards rate for paying via the DBS Visa debit card is 1.68% (1.28% + 0.4%).

Winner: GrabPay

Based on the assumptions I made, the better payment method for students is the GrabPay wallet using the Standard Chartered Cashback debit card to make top-ups.

Of course, the conclusion may be different if you spend a lot of money on transport and food delivery every month, so be sure to consider your own situation.

Working Adults

I will assume that working adults have access to regular credit cards, so I will not consider debit cards in this section.

GrabPay Payments

There are 2 credit cards that award cashback for GrabPay wallet top-ups - AMEX True Cashback and UOB Absolute.

Since UOB Absolute offers a higher cashback rate of 1.7% (vs 1.5%), this card shall be used for comparison.

As a result, the total rewards rate for GrabPay payments is 2.9% (1.7% + 1.2%).

Credit Card Payments

It can get a bit tricky here, simply because there are so many different types of credit cards available - miles, cashback, and rewards cards.

For simplicity, I will consider 2 types of credit cards - cashback cards and rewards cards as a proxy for specialised miles.

If you're interested in finding out more about credit cards, do check out my credit card rewards guide or my best credit card guide.

Remember that only cards that earn rewards for online spending should be considered in this section since that is what Grab transactions are registered as.

Miles

Let's start with specialised miles cards.

These are cards that typically earn points at an equivalent rate of 4 mpd.

Examples include HSBC Revolution, UOB Preferred Platinum Visa, and Citi Rewards.

It's hard to quantify the monetary value of 1 mile since it's ultimately dependent on how you end up redeeming it.

But since we need an arbitrary value, I will assume that 1 mile is worth 1.8 cents or $0.018, based on this post written by The MileLion.

So if a card earns 4 mpd, that's equivalent to earning $0.072 with every $1 spent, or a cashback rate of 7.2%.

Coupled with the GR points earned from the transaction, the total rewards rate stands at 7.6% (7.2% + 0.4%).

Note that there is no monthly spending requirement but the specialised earn rate of 4 mpd is capped on the first $1k spending on a monthly basis for most cards.

Cashback

It's slightly harder to calculate the rewards rate with a cashback card because there are many cashback cards with different cashback rates.

DBS Live Fresh awards 5%, OCBC FRANK awards 6%, and UOB EVOL awards 8%.

Even at the lower end of the spectrum of 5%, the total rewards rate earned is 5.4% (5% + 0.4%).

This is quite generous, but note that such cards with high cashback rates have monthly spending requirements of $600 or more.

Also, there is usually a monthly cap on the amount of cashback that can be earned at such high rates.

Winner: Credit Card

Based on the total rewards rates, it's clear that paying with a credit card on Grab is almost always better than paying via the GrabPay wallet.

The rates of 7.6% and 5.4% are much higher than 2.9%.

But I say "almost" because if you want to earn cashback but you can't consistently hit the monthly spending requirement for high cashback cards, then paying via the GrabPay wallet is your best choice.

Failing to meet the monthly spending requirement will result in you not earning the high cashback that you would normally earn and it's not a good idea to spend unnecessarily just to meet that requirement.

In such a case, settling for the 2.9% reward via GrabPay is the best choice.

To summarise,

Students can maximise rewards from Grab by using the GrabPay wallet while working adults can do so by using an appropriate credit card.

These conclusions were drawn based on the various assumptions that I made throughout the post.

When you're trying to evaluate which payment method is better for you, be sure to consider whether these assumptions hold true in your case.

What is your preferred method of payment on Grab and why? Let me know in the comments below!