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The miles game

Using the right credit cards in the right way can bring your travel dreams closer to reality

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With a lile bit of planning, playing your cards right could get you premium travel on the cheap.

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MARK Chua's most memorable travel experience is a 10-hour flight from Auckland to Singapore in Suites, which gave him more than enough time to sample premium wines and relish the malossol caviar in plush comfort - all for 85,000 KrisFlyer miles. Welcome to miles chasing, where miles earned on your credit cards open doors to a different world. Access, in this case, refers to the hallowed grounds of Business and First Class cabins, where the bubbly is plentiful, flatbeds are de rigueur and meal choices extend beyond just "Chicken or fish?" Arguably, the best part is that you wouldn't have to pay for it (except for taxes and/or fuel surcharges), although technically you could if you wanted to. But where's the fun in that?


First things first - why miles cards?

As Aaron Wong, founder of travel-hacking site The MileLion, puts it, choosing between cashback cards and miles cards is about choosing between value and access. "Value-seekers go for cashback as that's money in the pocket. Miles cards get you access," he says.

And while cashback cards do deliver a payoff in the short term, you have to wait longer with miles cards, albeit for a bigger payoff, Mr Wong adds.

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Racking up miles

While it may seem counter-intuitive, miles chasers typically advocate using a portfolio of cards, as opposed to loading all your spend on just one card.

Mr Chua, founder of luxury travel website The Shutterwhale, says: "Charging the right credit card for the right type of transaction is the surest way to chalk up miles very quickly. While it is definitely a lot more convenient to charge everything to a general spend card, the opportunity cost of that may be highly noticeable after a period of time."

For instance, using a Paywave card might get you four miles per dollar on Paywave transactions, but significantly less - in the region of 0.4 mile per dollar - on anything else, he points out.

Mr Wong banks on a similar strategy. "Some cards are better on certain categories than others," he says. "Every time you use a general spending card at a place where you could have used a specialised spending card, you're leaving money on the table.

"There are bonus categories out there just begging for you to take advantage of them. If you don't, you're shortchanging yourself."

A general spending card might get you 1.2-1.5 miles per dollar, but certain cards will net you up to four miles per dollar for specific categories, such as shopping, dining or Paywave transactions. However, the latter may also be capped at a certain amount of spend, applying to say, only the first S$1,000 or S$2,000 of transactions per month - something to remember before you sign up a storm.

The prevalence of contactless payment has also been something of a game changer. "Many establishments, especially food & beverage (F&B) ones, use contactless payments," says Mark Cheng, media sales lead at financial comparison site MoneySmart. "So even though your card may not give you as much rewards for dining, you can still benefit from these establishments if you get rewarded for contactless payments."

Aside from the headline mileage accrual rates for credit cards, miles chasers look at other aspects, such as sign up bonuses and conversion fees for converting your points into miles, since not all cards are created equally.

Other things to look at are transfer partners and the lifespan of the points. For instance, points on certain cards - such as the OCBC 90°N Card - don't expire, so you don't have to worry about losing them if you don't use them immediately. Meanwhile, the Citi PremierMiles card allows you to redeem miles across various airlines, including Singapore Airlines (SIA), Turkish Airlines, Cathay Pacific, and Qantas. This way, you're not restricted to one frequent flyer programme (FFP).

Certain FFPs also have sweet spots for particular destinations, reminds Mr Wong. While 92,000 miles KrisFlyer miles will snag you a one-way Business Class seat from Singapore to London on SIA, you could also save yourself a significant number of miles by tapping other FFPs. For example, a one-way Business Class ticket to London (via Istanbul) on Turkish Airlines is nearly half that amount at 45,000 miles.

"Personally, the most attractive aspect of a credit card is the mileage accrual rate but I do look at the welcome offer for a new card from time to time if I have major expenses coming up," says Mr Chua, who holds more than 10 credit cards but uses seven cards regularly. "Since I have an entire suite of credit cards to suit my spending needs, I will only apply for a new card if it is attractive enough to switch out an existing one or if it serves a new category of spend which is not currently covered by my cards."

The best strategy to "supercharge" the way you earn miles is leveraging on sign-up bonuses, Mr Cheng reckons. These could be tied to racking up a certain amount of spend within say, the first three months of acquiring the credit card.

Mr Cheng adds: "The miles per dollar tends to be the highest for these sign-up bonuses, probably in a bid to get people to start spending on the card and developing that habit."

But having multiple cards can also put you at risk of overspending, or forgetting to make payments on time, which could lead to getting hit with late payment charges.

One way around not missing payments is automating payments via GIRO, suggests Mr Cheng. He adds: "Some banks allow you to set alerts or lower your credit limit to make sure you don't overspend and this is also something that people should do if they have to manage multiple cards."

Organisation is key, as is sticking to your budget, highlights Mr Wong, who warns against spending beyond your means. "When annual fees come due, ask for a waiver, unless they're giving you miles for paying that fee."

Other tips from seasoned miles chasers include setting your statement dates to a similar payment window by contacting your respective banks. Mr Chua adds: "It is also a good idea to make a list of credit cards that you spend on and set a recurring reminder for those cards so you remember to make payment."

Acquiring miles

Another way to load up on miles is "buying" miles, since certain credit cards will throw in free miles if you pay the annual fee.

Programmes such as Avianca LifeMiles or Alaska Mileage Plan also sell miles, often allowing you to redeem the miles for flights at a fraction of the cost of the full fare. But Mr Wong warns against acquiring miles speculatively as programmes can - and do - devalue miles overnight.

Another route is to leverage on payment facilities such as CardUp, which you can use to pay for bills such as income tax, rent or tuition fees and earn points while doing so. For instance, you can ride on a payment facility to pay your rent with a credit card, although this comes with a service fee. The service fee tacked on is effectively the sum you're paying for the miles you will earn through the amount charged to your credit card.

Finally, other avenues include accruing points via hotel stays or through platforms such as Grab and Chope before converting them to miles, miles chasers say. Some websites - such as Krisflyer's online mall, KrisFlyer Spree - will throw in additional miles if you spend online at participating merchants. This effectively allows you to "double-dip" as you earn miles both through your credit card and through the website.

Now that you have miles,  what do you spend them on?

Any miles enthusiast worth their salt will tell you that you get far better value redeeming your miles for a premium seat as opposed to Economy.

Case in point: A round-trip (saver award) SIA economy class ticket to Sydney on a weekend in mid-February next year will set you back 56,000 Krisflyer miles. Assuming each mile is valued at 1.8 Singapore cents, this works out to a value of S$1,181 in total (including taxes). Alternatively, you can save yourself the miles and actually buy the cheapest economy class fare on SIA for the same weekend for S$1,004 at last check.

(Side note: Krisflyer award tickets typically come in two buckets - saver and advantage. Advantage requires far more miles but is more readily available)

On the other hand, a round-trip (saver award) Business Class ticket on SIA would require 124,000 miles; at 1.8 cents per mile, this works out to a total of S$2,449 (including taxes), giving you better bang for your buck. Actually buying the cheapest Business Class fare available to Sydney on SIA would cost S$4,273 at the time of writing.

"Opting for a premium seat over economy generally offers more value for your miles," says Mr Chua. "At the end of the day, the ideal situation is to cast a gap between the value of mileage acquisition - or cost per mile - and the value of mileage redemption. In most instances, especially on long-haul flights, redeeming your miles for a flight in Business or First Class will give you the most value." Traditionally, miles have been worth two Singapore cents each but the cost per mile has declined over the years, especially with payment facility options that allow for miles to be purchased indirectly at a lower rate, he adds.

For his part, Mr Wong values miles at around 1.8 cents per mile.

Are there instances where it might make sense to squander your hard-earned miles - eked out over months by painstakingly swiping your credit card on everything from a loaf of bread to groceries - on (heaven forbid) cattle class?

Sure. Let's say you're looking to book a last-minute three-day trip to Bali on Christmas Eve in search of sun, sand and nasi goreng. You could cough up the eye-watering several hundred dollars it would set you back for a seat on a full-service carrier at the eleventh hour.

Or you could also choose to redeem 15,000 miles and pay S$71 in taxes for a round-trip economy saver ticket on SIA. That's assuming, of course, there's still availability.

Certain routes which aren't served by too many carriers, such as Singapore-Koh Samui, may also be on the pricey side and that too could warrant using your miles for Economy Class.

Other possible scenarios where it makes sense include redeeming just a one-way ticket (since buying a one-way ticket is almost as expensive as a round-trip), when rewards flights go on sale, or if a FFP offers a "sweet spot" for certain Economy sectors, suggests Mr Wong. British Airways' Avios miles, for example, can get you an intra-Europe Economy seat starting from just 4,000 miles.

Pre-boarding

If you've played your cards right and snagged yourself a Business or First Class ticket, then you will be able to avail yourself of other hedonistic perks on the ground before your flight, such as premium lounge access and (with some carriers) a complimentary ride to the airport in a luxury car.

But if you went the Economy Class route, don't fret. Certain travel cards throw in a number of complimentary lounge visits at airport lounges run by third-party operators. This could range from two free lounge visits a year on cards such as the DBS Altitude card to unlimited lounge access for luxury travel credit cards with a higher annual minimum income threshold, such as the HSBC Visa Infinite. A lounge operator such as Priority Pass, for instance, might otherwise charge US$32 per member visit for its lounges worldwide.

(You can also hold multiple Priority Pass membership across different credit cards, so you could hypothetically end up with four free visits a year from two credit cards)

Lounge access can come in mighty handy, especially while waiting for your flight to depart out of a small(ish) airport and balefully deciding whether to park yourself at a fast food joint or a Starbucks.

Of course, the standard of the lounge varies from airport to airport, but the upside to having a quiet place to grab a bite, a half-way decent glass of Sauvignon Blanc and WiFi to squeeze in an hour's worth of Netflix bingeing cannot be underestimated.

That's just one of the ways you'll find that going the extra mile to get those extra miles will be worth it.