If I spend $500 or less every month, should I opt for a miles or cashback credit card? - Seedly
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Charmaine Lim Xiaomei

Asked on 04 Dec 2019

If I spend $500 or less every month, should I opt for a miles or cashback credit card?

Which would be the most beneficial rewards system in this scenario and which cards should i consider?

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Wallace Chai
Wallace Chai
Level 9. God of Wisdom
Answered on 09 Dec 2019

I feel cashback is to go for. As with less than 500 a month, you need a long time to accumulate the miles to a certain amount before you can use it. Miles do expires in most CC.

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👍 11

Hi Charmaine,

Both will work. Cashback offers instant gratification, but you will have to meet certain spend criteria to unlock the maximum cashback. Any lesser and you'll be getting a very measely amount.

Miles can still work, if you go for cards that earning miles with no expiry. Citi PM, OCBC 90N and DBS Altitude come to mind. Then, maximize opportunities on those cards. They may be general spending cards, but for example, Citi will have tie ups for more mpd on hotel bookings on sites like Kaligo and Agoda. DBS awards more for flight bookings. And OCBC has 4 mpd on overseas spend till Feb 2020. With the right combination of putting the right spend on the right card, you can still rack up quite a few miles. I earned 300K on Citi PM alone over 5-6 years, and I didn't really spend a lot. Just maximized a lot of Kaligo and Agoda hotel bookings (you can book for friends who don't care for these kind of things)

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👍 6
Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 15 Dec 2019

Actually, both works because there are both miles and cashback cards that don't have minimum spend, for example:

Miles: Citi Premiermiles, OCBC 90N (pretty sure there are others but I'm more of a cashback person)

Cashback: HSBC Advance, SC Unlimited, AMEX True Cashback

For cashback, it's instant gratification every month and usually for no min spend, it's quite low @ 1.5%. For miles, you clock up for a (long) period of time and claim it, but take note that miles do expire, except for the 2 listed above which has no expiry. I have an OCBC 90N just for in case purposes as well!

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👍 5
Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 9. God of Wisdom
Updated on 20 Dec 2019

If its me, I will prefer cashback as my spending is below $500 per month.

This allow me to have more consistent rewards, rather than miles that I need to accumulate over a long period of time for a decent redemption.

I will still keep a miles card for large spending.

For big ticket item, such as for travel, wedding, home furnishing etc, then I will use that miles card to earn miles.​​​

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👍 4
Yanisa Koh
Yanisa Koh
Level 6. Master
Answered on 13 Dec 2019

Hello.. I would go for cashback as its a more immediate return.. With less than $500 spend it would take pretty long to accumulate miles..

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👍 1
Eveline Lau
Eveline Lau
Level 6. Master
Updated on 16 Dec 2019

Depends on what do you want out of your spendings. It also depends on your spending pattern too. If you're not even a traveller, I would suggest you don't even bother with miles. Personally I would think that cashback may work out better for you because the credit cards that give high mpd have expiry to the miles (which means you probably should clock sufficient spending in order for the miles to translate into something valuable), the credit cards that have no expiry to the miles have low mpd. So unless you are fine with taking a long time to accumulate your miles, it is more likely that a cashback card gives you a more tangible return.

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👍 1

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 hand, 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.

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Hwee Kian
Hwee Kian
Level 7. Grand Master
Answered on 04 Dec 2019

Hi Charmaine,

I think it's a matter of whether you're in the miles or cashback camp. For myself, I would opt for cashback credit card. You can go for Citi SMRT card, as it's quite generous with 4.7 - 5% interest cashback. ​​​

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👍 1
Keith Ng
Keith Ng
Level 5. Genius
Answered on 19 Dec 2019

UOB One, min spend $500/month - 3.33%

$500 x 3.33% = $16.65

$16.65 x 12 = $199.80

Miles cards at 4mpd, no min spend

$500 x 4mpd = 2,000 miles

2,000 miles x 12 = 24,000 miles

That's a one-way Business Class ticket to Bangkok ($962).

But it's Bangkok.. I can fly Scoot...

Well, using the right card and you can fly Business Class with the same spend.

Travel better for less.​​​

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👍 0
Eunice Yip
Eunice Yip
Level 4. Prodigy
Answered on 18 Dec 2019

Certainly cashback card would be a better option because you can see the cashback rewards and use it after just a few spend.

For miles card, you do have to spend quite a lot to clock a good number of miles.

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👍 0
Angeline Teo
Angeline Teo, Calculator at The Internet
Level 6. Master
Answered on 16 Dec 2019

Cashback!

Take the time to learn about miles, and wait for your income and spending to increase before getting a miles card.

Meanwhile enjoy the rebates from cashback cards!

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👍 0
Isabel Wong
Isabel Wong
Level 6. Master
Answered on 07 Dec 2019

If you like to travel to countries outside of SEA then I would suggest a miles card for now. However, as others have suggested trying to hit the min spend for the UOB one card is good - as phone bills, insurance and taxes are all counted.

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👍 0
SW
Say Wai
Level 5. Genius
Answered on 05 Dec 2019

Note that cashback cards typically require minimum spending, sometimes in specific categories to qualify for the high rebates. On the other hand, miles cards (such as Citibank Rewards, UOB preferred platinum, OCBC titanium rewards) give generous points for spending in certain categories such as online, paywave, shopping, from the first dollar.

And this cannot be emphasised enough - reward points earned from the cards i mentioned above need not be redeemed for miles. They can be redeemed for vouchers, some of which can represent better value than cashback cards.

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👍 0
VC
Vicki Chng
Level 6. Master
Answered on 05 Dec 2019

I'm not a fan of miles because miles tend to be devalued every now and then and airfares are getting cheaper these days.

For cashback cards I recommend the flat cashback rates of 1.5-1.6% for your needs, or the Citi SMRT where the minimum spend is $300.

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👍 0
Jacob
Jacob
Level 6. Master
Answered on 04 Dec 2019

Hi Charmaine,

I think we are very much on the same boat. Using a cashback card initially, DBS Live Fresh has a minimum spend of $600 per month which I hit and miss on many occasions. Hence either I was eligible for the 5% cashback, or the <$600 spending would not enjoy any cashback. Moreover, the 5% is also subjected to various categories of Visa Contactless, Online Spend, etc.

Then I started reading up about miles and how DBS Altitude could be a better fit for me - no minimum spend, no expiry for the miles, etc. Still pretty new to the miles game but I'd say you could be getting more "bang-for-buck" based on my monthly expenditure.

Try doing an analysis of your monthly expenditure, and compare the rewards of miles and cashback cards. While cashback is an immediate reward, the value of your miles redemption (later down the road) is higher than the cashback received. Just my two cents.

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👍 0
Adelyn K
Adelyn K
Level 5. Genius
Answered on 04 Dec 2019

I spend less than $500/month too, and I personally go for miles, as the bulk of my $500 comes from GrabPay and the occasional dining out. So I get more value for my purchases with Citi Rewards and AMEX KF via GrabPay.

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👍 0
Sanchit
Sanchit
Level 6. Master
Answered on 04 Dec 2019

I would suggest you look into accounts which give bonus interests on hitting ~$500 targets. These would be even better than 3-5% cashback based on what your principle in your account is.

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👍 0
Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Answered on 04 Dec 2019

Cashback.

-

Charmaine if you are working, you can start saving up for your income tax due next year by topping up into grabpay. this will help you to hit $500 monthly expenditure and entitles you to earn 3.33% rebates on UOB one card. requries planning

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