Thinking to get a credit card — Cashback or Miles? Currently, I am more geared towards miles but given the situation, I am conflicted. Any advice? - Seedly
Seedly logo
Seedly logo
 

Miles

Cashback

SG Budget Babe

MileLion

Credit Cards

Zachary Teo

Asked 4w ago

Thinking to get a credit card — Cashback or Miles? Currently, I am more geared towards miles but given the situation, I am conflicted. Any advice?

My reason for miles is to accumulate enough points for honeymoon trip down the years, 2 years to be exact.

0 comments

41 answers

Answer Now

Answers (41)

Sort By

Wallace Chai
Wallace Chai
Level 9. God of Wisdom
Answered on 22 Dec 2019

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.

0 comments

👍 16

For a start, go for cashback.

Once you get the hang of managing your income, then you relook at your expenses and see if you can afford not to have the immediate cashback or you can afford to enjoy the miles later.

Generally to be able to redeem for a decent trip can be 5-7 years depending on your spending.

0 comments

👍 11
Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 22 Dec 2019

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.

0 comments

👍 7
Mandy Ng
Mandy Ng
Level 4. Prodigy
Answered on 21 Nov 2019

As someone who had the same question when I first graduated, the simplest way I looked at it (after reading heaps of articles and blogs) was to ask myself this: am I going to make a lot of big purchases in the near future (ie. wedding or house) and will this be recurring for the next few months or year ahead (after wedding then honeymoon, house renovation, etc.)

If your answer to this question is yes and you value travelling, then it makes sense to get a Miles card as you can easily rack up a lot of points with the bonus sign up promos.

If your answer is no and you are mostly spending on adhoc stuff like shopping and dining, then it probably will be better to get a cashback card as the benefit is almost instantaneous and you don't have to wait so long (as a miles card) to accumulate and reap the benefits.

0 comments

👍 6
Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 9. God of Wisdom
Answered on 22 Dec 2019

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.

0 comments

👍 4
Aaron Wong
Aaron Wong, Founder at The Milelion
Level 6. Master
Updated on 25 Nov 2019

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.

0 comments

👍 4

Hi Zachary,

As someone who used miles for my honeymoon, I can tell you that if you wish to accumulate miles, you might as well do so now. Depending on the card you use, you may find that your miles earned and credited on the bank's side (in the form of points or whatever) have no expiry date (which is great), but even if they do have an expiry, transferring them to Krisflyer will extend your expiry by another 3 years.

You'll find that you will take time to accumulate miles. Even spending $2000/mth @ 4 mpd will only net you 96K miles a year, or 192K miles in 2 years, which is just enough to fly you and your wife to be in business class (if not, why are you in the miles game?) to Tokyo and back. If you were thinking of going further, you're out of luck and will have to fly economy. And that's assuming you manage to find award space available on SQ saver instead of the more expensive advantage rates.

So start now. There is no better time.

2 comments

👍 2
Zachary Teo

4w ago

Hey Elijah! Thanks a lot. It's nice to hear from someone who have experience in this. As for the location, it's up to my fiancée but we're frugal so economy class is good for us already. Thanks once again! I will get started haha
Elijah Lee
Elijah Lee

4w ago

Hi Zachary, if you are ok with economy then a cashback card might be better. However, it might be worth to go to business just for that once in a lifetime trip, just to experience it. For most people, business class is just something you would never cough up real cash for.
Junus Eu
Junus Eu
Level 9. God of Wisdom
Answered on 05 Dec 2019

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 ;)

0 comments

👍 2
Sean Ng
Sean Ng
Level 4. Prodigy
Updated on 21 Nov 2019

I would suggest do a comparison of the cashback credit cards you are thinking of, and then follows by the miles cards. Read the terms and understand how each card works.

Some cashbacks have a high minimum spending, some have high cashback % on specific categories, some give you higher returns when use together with its corresponding savings/current account.

Repeat the steps for miles cards (some miles never expire, some give you higher miles for certain spending categories, etc).

Then look at your current spending habits as well as 2-3 years down the road. Also, determine how much effort you willing to keep track your spendings in order to maximise the cashback returns. This would give you a broad idea which card(s) you will fancy.

0 comments

👍 2

Consider evaluating your current lifestyle and behaviors.

  1. Are you the type who consistently check in on available mile points and actively exchange them for rewards?

  2. The milepoints program you are considering; in exchange for the rewards, is it more worth in terms of $ value vs x% direct cash backs? (Comparison of different programs)

  3. What do you usually spend on? Travel? Daily expenses? From this line of thought you can check out available credit cards in market and explore their different types of miles/cashbacks programs.

Lastly, always help yourself by taking up a program that is most applicable to your lifestyle. Say if you're not the type to travel frequently, does it makes sense to have a krisflyer mile card unless your corporate is "SQ-Preferred"? Also avoid any programs that are too inflexible.

Hope this helps!

0 comments

👍 2
KT
Kenny Tan
Level 4. Prodigy
Answered on 22 Nov 2019

Depends on your needs.

I will recommend those credit cards that provide monthly cashback instead of quarterly. It'll be much easier as you do not need to track your spending quarterly, which I find it a hassle.

However, if you are those who travel a lot, either personally or work purpose, do consider miles.

0 comments

👍 1
Tay WenHao
Tay WenHao
Top Contributor

Top Contributor (May)

Level 7. Grand Master
Answered 3w ago

For myself, I go for cashback. More fuss free. Able to 'cashout' upfront.

For miles, you need to research more and calculate the conversion rate, and it differs from airline to airline. Unless you are going for business class, most likely the miles are not worth it. Furthermore, some miles may expire.

In short, the miles could possible 'earn' more but you need to play the miles game. Which is too troublesome for me thus I go for cashback.

0 comments

👍 0

You can get back miles and cashback

looking at current situation, cashback would be ideal as it is liquid and mroe valuable now

I make videos about interesting stuff at youtube here

0 comments

👍 0
Teo Hui Ting
Teo Hui Ting
Level 3. Wonderkid
Answered 4w ago

I am team cashback based on my personality.

Perhaps this will help you to understand yours and ultimately decide: https://milelion.com/2019/12/22/is-it-worth-collecting-miles-if-i-dont-want-to-travel-in-first-business-class/

0 comments

👍 0

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.

I share quality content on estate planning and financial planning here.​​​

0 comments

👍 0
Gareth Seet
Gareth Seet
Level 3. Wonderkid
Answered on 06 Dec 2019

Time to choose your camp, miles vs cashback! Haha. Basically, if you like the thought of saving something all the way and claiming it one shot, that would be miles. Whereas for cashback, it's more of you getting returns every month consistently.

0 comments

👍 0
Jacob
Jacob
Level 6. Master
Answered on 06 Dec 2019

You could determine if you are someone who prefers instant gratification (cashback), or you prefer to gain greater value over time (miles). There isn't any right or wrong option to this, but it boils down to which you prefer.

It would be good to have a cashback card for a start to better study your expenses pattern, followed by applying for a miles card if you prefer.

All the best!

0 comments

👍 0
Yanisa Koh
Yanisa Koh
Level 6. Master
Answered on 06 Dec 2019

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.

0 comments

👍 0
Isabel Wong
Isabel Wong
Level 6. Master
Answered on 06 Dec 2019

Cashback! Unless you have large spending coming up/want to take business class.

0 comments

👍 0
Adelyn K
Adelyn K
Level 5. Genius
Answered on 05 Dec 2019

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.

0 comments

👍 0
Load more answers