SG Budget Babe
Asked by Anonymous
Asked on 22 Nov 2019
What are your thoughts on using both cashback and miles credit cards in different scenarios? Is this advisable or should I just focus on one type of reward instead?
Top Contributor (Dec)
Having just flown 2018 RJ, I'm going reaffirm my decision to go with the miles route.
I find that cashback, while simple to understand, is just that. A rebate of some form. Miles actually presents a kind of game that's easy to pick up but difficult to master.
Cashback, you spend, you get cash back. Done. Sometimes, you don't get a lot due to the lack of your minimum spend. Sometimes you get a lot, but then you get capped.
Miles, you spend, you get your miles. No matter how much you spend, a little or a not (I'm not about to go into the finer details here, such as the fact that spending $4.99 on a UOB Priv mile doesn't get you anything). Not only that, you are effectively not capped on how many miles you can earn. If you want to play the game simply, just spend normally and you'll eventually 'farm' enough miles to get a nice business class redemption. If you want to kick the notch up a little, spend time learning and maximizing the rules of the game, and your redemption comes a lot sooner than you think.
So, miles for me. As Aaron has mentioned, focus on one or the other, not both.
Focus on one. I will choose cashback as my spending is not that much per annum which then it is abit slow to accumulate points. Also always depends on your needs, if you are a mile person, just go for it. But focus either one would be good enough. Unless your expenditure is high and make sense split the amount into different cards.
I prefer cashback as it is easier to manage. For me, I use HSBC Advance as it is fuss free too. There is a cashback cap though, so whenever I need to spend past that cap, that's where I will activate my miles card to pay for the excess.
Top Contributor (Dec)
The problem with focus is that you hardly get every situation in life that matches your focus.
I prefer have 1 main milecard and 1 main cashbackcard.
So all large spending and worthwhile spending - miles card for my miles
anything else- cashback card.
Less thinking and more on which one is less taxing to just whip out the card.
You should definitely focus on one or the other.
There are cards on the market that let you earn both (e.g Maybank FC Barcelona card- 1.6% cashback on local spend, 0.8 miles per dollar on overseas spend), but they're few and far between, and generally give you the best of neither world. Cashback cards generally have caps, so you won't want to use them for big ticket expenditure. There are cashback cards without caps (e.g. AMEX True Cashback), but they offer much lower earning rates (e.g. 1.5%). On the other hand, a big ticket expenditure is perfect for a miles strategy. There are numerous sign up bonuses on the market that allow you to turn a one-time expense like a renovation or wedding bill into a big chunk of miles. For example, if you're planning to spend $10,000, you can earn a total of 39,500 miles by putting it on the AMEX KrisFlyer Ascend card.
The other problem with mixing miles and cashback cards is that most cashback cards have a minimum spend to unlock higher cashback. Fail to hit this, and your figures look very miserable. For example, the Citi Cashback card offers you 8% cashback on dining, groceries and petrol, provided you hit $888 minimum spending a month. Otherwise, you earn a puny 0.25%. If you're splitting your spend across miles and cashback cards, it's even more difficult to hit the minimum spend required on a cashback card.
So pick one and stick with it.
I just get a simple cashback card, and have decluttered on my credit cards.
The less cards, the less mind space, and the less I spend ;)
Depending on your spending amount and habits every month, it's best to focus mainly on 1. Otherwise you may not get enough miles to use before they expire, and may not hit the minimum spending to qualify for cashback if you spread across too many cards.
Cashback! Unless you have large spending coming up/want to take business class.
I use both cashback and miles, but for different scenarios of course.
I'm on AMEX KF, so I will usually use my cashback card when the merchant don't accept AMEX or grabpay. :)
Focusing on one reward will help you to nett better gains in one area.
It could be wise(r) to stick to a preferred one, instead of dipping your toes into so many rewards and diluting the miles/cashback in that process. While juggling both, there should be one that you are more focused on and used more frequently. So it could be good to stick with that.
Find one that you resonate with based on your spendings, and maximise the rewards in that segment accordingly.
Definitely focus on one. We only have limited expenditure but unlimited rewards.
However you should evaluate how your types of expenditure and the amount will be rewarded under both scenarios.
Choose the one that gives you the better benefit. To summarise, plan to maximise the reward from your expenditure
For me personally there was a brief moment (a few months) i was chasing miles to accumualte a large amount of miles for the sign up promotions. After i had burn through the credit cards, i switch to cash back (8% uob one card grab rebate).
I think a lot depends on how one values travel and at which class one travels in. One also has to bear in mind the spending habit and quantum.
I think miles is worth it if one spends a lot and plans to use the miles to travel to Europe or USA, ideally on Business Class. That would probably give the best value.
Otherwise, one may be better off getting the cash back. At least you have the savings in your pocket.
Cashback cards are great for everyday spending and if you're good at travelling for cheap eg. airline promos, budget airlines, Airbnb, etc. On the other hand, they're not so good when you have big purchases like a delivery bill, a wedding or renovation to pay for because of the cashback caps per month.
I typically use cashback cards most of the time, but otherwise take out my miles for such big purchases.
It depends on your needs and spending.
If you love travelling and don't mind delayed gratification, then go for miles card. Additionally, some miles cards allow you to pay for your purchases by using the miles (more often than not, it is not worth it). As as result, the card is highly specialised for travel usage.
On the other card, if you prefer money and instant gratification, then go for cashback card. In essence, it works as simply as it should be - you spend money, and you receive a percentage back. As usual, the more you spend, the more cashback you get in return as well (not just limited to miles card).
Personally, I rank cashback over miles (despite the fact that I travel quite a bit). And I own both cards (cashback and miles) as part of my budgeting and accounting - each card serves different purposes.
Here is everything about me and what I do best.