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Top tips for earning air miles

The document provides insights on earning air miles through credit cards and travel hacking strategies. It covers the basics of credit card rewards, frequent flyer programs, and methods to maximize miles, emphasizing the importance of understanding different earning potential and redemption value. The presentation also warns of potential financial pitfalls associated with credit card use and offers practical tips for developing a personalized credit card strategy.

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TOP TIPS FOR EARNING AIR MILESA SPECIAL PRESENTATION 5 DEC 2016 © The Milelion, All Rights Reserved. No portion of the content herein may be used or reproduced without the prior written consent of The Milelion www.milelion.com | admin@milelion.com | Slide design by June Fong 1
PREFACE • The following slides were created for an iPaymy webinar and should not be read in isolation without the accompanying video • The Miles and Points Game is dynamic and information often quickly goes out of date. Future readers of this presentation should take into account the date of creation (5 Dec 2016) of this document. • You should not play the Miles and Points Game if you have reason to believe you will have difficulty paying off your balance in full, on time, every month. Abuse of credit can lead to detrimental consequences for you and your loved ones. • The Miles and Points Game may sometimes require you to engage in rather irregular behavior. Your friends and family may think you mad. Try not to rub it in when you’re sipping Krug at 30,000 ft. 2
WHO ARE YOU AND WHAT ARE YOU DOING ON MY COMPUTER? < DO NOT ADJUST YOUR SCREENS > Aaron Founder of The Milelion Likes walks on the beach, candlelit dinners and you Random Vaguely Impressive Numbers ~400,000 lifetime miles flown 65 airports across 30 countries ~300 nights in hotels Earned 2M+ miles through credit cards, flying and other tricks Foreign women successfully wooed: 0 3
WHAT WILL WE LEARN DURING THIS SESSION? This two-part webinar will cover credit card rewards and airline frequent flyer programs • Basics of Credit Card Reward Programs • Creating a credit card strategy that works for you • A primer on airline frequent flyer programs • How and how not to redeem your miles • How to value the miles that you earn • “Fuel Dumping/ 3X” • Manufactured Spending Strategies • Anything that violates the T&C of banks + airline rewards programs • Hidden City/ Throwaway ticketing • Hotel/Rental Car booking strategies W H AT YO U W I L L L EA RN W H AT YO U W I L L N OT L E A RN 4
WHAT IS TRAVEL HACKING?Travel hacking is a philosophy that travelling well doesn’t have to cost more Travel Hacking (noun/verb/I can’t remember the difference and my mom was an English teacher) 1. The art of travelling the world in First Class, staying in 5 Star hotels and enjoying the finer things in life while paying a fraction of the price 2. Free stuff can’t bluff VA LU E AC C E SS 1 2 “Travel hacking helps me save money” “Travel hacking gives me access to experiences I wouldn’t have been able to afford” 5
WHAT DOES TRAVEL HACKING REQUIRE?The hobby of travel hacking is not suited for everyone- you need to be willing to invest the time and energy to make it work PAT IEN CE M E T ICU LOUSNESS 1 2 • Willing to sign up for multiple cards and set up GIRO payments for each • Remembering to use the right card at the right time • Remembering to get annual fees waived when due (or paying them to get miles) • Tracking your points to make sure they have credited properly S E L F - CONTROL 3 • Not spending beyond your means 6
But, when it pays off, man, it really pays off. 7
WHY DO I NEED CREDIT CARDS?Credit cards are essential to any miles building strategy because earning miles through flights alone is insufficient • The majority of your miles will be earned through credit cards, not flying • SIN-SFO economy @ 50% accrual and S$1,956 cost • Miles from flying= 8,440 • Miles from credit card= 7,824 Singapore Airlines Mileage Accrual Chart, by Ticket Class FLIGHTS (~20%) CREDIT CARDS (~80%) 8
WHAT DO I GET WHEN I PAY WITH A CARD?The type of rewards you get depends on the card you use I get a strange feeling of emptiness I get a certain % of cash rebate at the end of the month I earn points with my bank I convert the points to frequent flyer miles by paying a conversion fee Debit Card Cash Rebate Credit Card Miles/ Points Card Normally capped and subject to many T&C Also, somewhere a kitten dies CARD/REWARD PAYOFF, BY TYPE OF CARD Spend $100 on my card And you are a winner and also very handsome 9
WHAT ARE THE DIFFERENT TYPES OF REWARDS? Unlike debit cards, credit cards offer rewards programs. These rewards programs can be broadly classified into fixed and variable rebates CREDIT CARDS FIXED REBATES (CASHBACK) VARIABLE REBATES (MILES & POINTS) DEBIT CARDS NO REWARDS 10
WHY SHOULDN’T I USE CASHBACK /FIXED REBATE CARDS? Fixed rebate/ cashback cards are poor value and usually come with many conditions attached FIXED REBATES CASHBACK No caps on cashback! No minimum spend! 1.5% cashback only 5% cashback on dining/ travel/ shopping/ groceries! $30 cap per transaction, 1% on everything else. Must accumulate min $50 to redeem 9% off dining! Minimum spend $700 a month, capped at $30 a month 8% cashback on groceries, petrol and dining! $25 cap per month, 0.25% on everything else 6% cashback on dining! Weekend dining only. 3% on weekday dining, groceries, online. 0.3% on everything else. $80 cap per month 3% cashback on everything! Minimum spend $3,000 a month, capped at $200 per quarter 11
WHAT DO VARIABLE REBATE CARDS GIVE ME? The value of variable rebates depend on how you use them ILLUSTRATIVE EXAMPLE: VALUE OF DBS POINTS IF REDEEMED FOR… VOUCHERS MILES VOUCHERS 1 POINT = ~1.7 CENTS MILES 1 POINT = 2 MILES UNDERSTANDING THE VALUE OF A MILE IS A CRUCIAL PIECE OF INFORMATION. HOW DO WE VALUE A MILE? 12
SQ Return Trip to Paris, redeemed on … Economy Premium Economy Business First RETAIL PRICE S$1,177- 1957 S$2,977 S$6,508 S$13,836 MILES + TAXES (SAVER) 59,500 Miles +S$557 106,250 Miles +S$557 136,000 Miles +S$658 182,750 Miles +S$686 IMPLIED VALUE OF 1 MILE 1.0-2.4 cents/ miles 2.3 cents/ miles 4.3 cents/ miles 7.2 cents/ miles INCREMENTAL PRICE 52%-153% 119% 113% INCREMENTAL MILES 79% 28% 34% WHAT IS THE THEORETICAL VALUE OF A MILE?The value of a mile depends on what you redeem it for- you get more value redeeming for premium cabins than economy 13
HOW SHOULD I VALUE MY MILES? Although a mile in theory can buy up to 7 cents of value, the valuation of a mile is as much a philosophical exercise as a mathematical one OTHER RELEVANT FACTORS IN VALUING A MILE Would I really have paid $10,000 for a First Class seat? What is the likelihood that I will be able to find saver space? 1 2 What about the discounts/ bonus interest I forwent when building miles? 3 • What is my alternative if I were not able to redeem a First Class seat? • Should we be pegging the value to retail price or what we would be willing to pay? • OCBC/ SCB Bonus$aver/ UOB One accounts • Bank dining discounts at restaurants • Saver award space on certain routes is highly restricted by Krisflyer and subject to waitlist • SIN-CDG in business saver= 136K miles • SIN-CDG in business standard= 204K miles ALTHOUGH A MILE CAN BUY UP TO 7 CENTS OF VALUE, A CONSERVATIVE VALUATION OF MILES WOULD BE AROUND 2-3 CENTS EACH 14
WHERE WILL MY CREDIT CARD MILES COME FROM? The majority of your credit card miles will come from category/ specialised spending Variable Rebates (Miles & Points) General Spending Specialized Spending • Dining • Online spending • Paywave • Petrol • Shopping • Overseas spend • Anything that does not fall into the specialized spending category Breakdown of Miles Earned Credit cards- Category spending (~50%) Credit cards- General spending (~30%) Flights (~20%) WHY CAN’T I JUST USE ONE CARD FOR EVERYTHING? 15
WHY CAN’T I USE ONE CARD FOR EVERYTHING? A single-card strategy will always generate fewer miles than using a portfolio because of the presence of bonus categories EXAMPLE: $30,000 OF ANNUAL CARD SPENDING With One Card 30% Dining 30% Online Purchases 10% Shopping 10% Overseas Spending 20% Misc. Local Spending With Card Portfolio Total Miles= 45,000 ~1X Economy Round Trip to Australia / Middle East Total Miles= 104,400 1.4 miles/ $1 1.4 miles/ $1 1.4 miles/ $1 2.4 miles/ $1 1.4 miles/ $1 4 miles/ $1 4 miles/ $1 4 miles/ $1 4 miles/ $1 1.4 miles/ $1 ~1X Suites Round Trip to Tokyo OR ~1X Suites One Way to New York 16
v v v v v v v WHAT SPECIALISED SPENDING CARDS DO I NEED? Think: which bonus categories do I spend the most on? 17
WHAT GENERAL SPENDING CARDS DO I NEED? Think: which specialised spending card am I accumulating miles with? GENERAL SPENDING: ANYTHING THAT ISN’T SPECIALISED 18
? QUESTIONS TO ASK WHEN GETTING A CARD Points awarded for every $1 or $5? How many points do I need to accumulate before cashing out? How long do I have to accumulate points before I need to convert them to miles? How much do I need to pay to convert my points to miles? How much is the annual fee and what do I get in return? E A RN IN G B LOC KS CO N VERSION F E E M I N IMUM CO N VERSION E X P IRY O F P O INTS A N NUAL F E E 1 2 3 4 5 19
SHOULD I BE PAYING ANNUAL FEES? Whether or not you should pay annual fees depends on (1) whether you need something in return (2) the price of the miles (3) whether you need them Annual Fee Renewal Miles CPM HSBC Visa Infinite $488 30,000 1.63 SCB Visa Infinite $588.50 35,000 1.68 DBS Altitude $192.60 10,000 1.93 Citibank Premiermiles $192.60 10,000 1.93 ANZ Travel Card $200 10,000 2.00 Citibank Prestige $535 25,000 2.14 OCBC Voyage $488/ $3,210 15,000 /150,000* 3.25/ 2.14 • Rule #1: Never pay an annual fee if you get nothing in return • Banks earn whenever you spend with their cards- why should you pay them to earn money for them? • Rule #2: If miles are offered, don’t pay more than 2 cpm • Rule #3: If you are already earning a healthy miles income you may not want further cash outflow • Some banks will waive annual fees if you spend above a certain threshold Commentary *OCBC offers an option of paying $488 to get 15,000 Voyage Miles or $3,210 to get 150,000 Krisflyer Miles. Voyage miles are a very different species from Krisflyer miles and to explain it in this presentation would put many to sleep. TL;DR, 1 Voyage Mile is worth slightly more than 1 Krisflyer mile, although they convert on a 1:1 basis. Read my analysis here- http://bit.ly/2gw1GPF 20
HOW I SHOULD DEVELOP MY CREDIT CARD STRATEGY? Your credit card strategy should be based on your objectives, spending patterns and what is accessible to you D E C I D E O B J ECT IVES 1 A N ALYSE S P E N DING PAT T ERNS ASSE SS C A R D O F F E RIN GS BASE D O N ( 1 ) & ( 2 ) 2 3 • Where do I want to go? • How do I want to get there? • When do I want to go? • How often am I likely to travel? • How much do I usually spend in a month, and how is that broken down into different categories? • Do I have any big ticket expenditures (renovation, wedding, business trip) coming up? • Which cards can I access based on my income? • Which cards have points that will last long enough to match my earning horizon? • Which cards provide bonuses in the categories I most heavily spend? 21
HOW ELSE CAN I EARN MILES?Here are some other ways of earning miles you might not have thought about S H O P P ING T H ROU GH K R I SFLY ER S P RE E 1 M I L ET IZING YO U R R E G U LAR PAYMEN TS M I L ES E A RNING T I M E D E P OSIT 2 3 Placement SGD Miles Time Deposit S$27,000 – S$162,000 (6 months) 10,000 KrisFlyer Miles for every S$27,000 fresh funds deposited capped at 60,000 miles • Earn miles for your rental & other regular payments with iPayMy • Paying with card earning 4 mpd and 2.6% fee: 1 mile= 0.65 cpm • Paying with a card earning 1.4 mpd and 2.6% fee: 1 mile=1.86 cpm • Earn miles when you shop online via Krisflyer spree (www.krisflyerspree.com) 22
APART FROM CREDIT CARD SPENDING, HOW ELSE CAN I EARN MILES? Here are some other ways of earning miles you might not have thought about I D E N T IFYING O P P ORT UNITIE S TO T U RN G E N E RAL S P EN D ING I N TO S P E C IALISE D S P EN D ING 4 M I LESBAC K H OT EL BO OK INGS OT H ERS 5 6 • Taxi vs Uber • Grocery store vs Redmart • Regular rental & other payment vs iPaymy • Official airline/hotel site vs OTA • Regular payment vs Samsung/ Android/ Apple/ Paywave • Kaligo- 10 miles per $1 • Pointshound • Rocketmiles • Magazine subscriptions • Esso Smiles • Passion Card Tap For More • M1 Sunperks • Shell Escape points • Mobile phone roaming • Club21 • Outlet shopping 23
QUESTIONS ? Find out more at www.iPaymy.com 24
FURTHER RESOURCES The following are links you may find useful in your miles journey • The Milelion - travel better for less: www.milelion.com • The Milelion Directory - index of all articles on the site: http://milelion.com/making-the-most-out-of-the-milelion/ • Does spending on (insert merchant name here) get a bonus? A crowdsourced Google document: https://docs.google.com/spreadsheets/d/1ffbzrIlK7iTO_IAT7nzk8ULWf1zsRX9F-rniLbRwwR4/edit • Flyertalk thread on the latest news on miles earning credit cards in Singapore: https://www.flyertalk.com/forum/singapore-airlines-krisflyer/1076196-best-credit-cards-kf-miles-accrual-master- thread-430.html • Hardwarezone forum where people post credit card deals: http://forums.hardwarezone.com.sg/credit-cards-line- credit-facilities-243/ • Boarding Area - a collection of travel hacking blogs (mostly US-focused, some UK): www.boardingarea.com
What card do I use for online spending? Online spending is slightly more complicated- not all online spending is made equal, so be aware of your options Online Spending HSBC Advance Citibank Rewards UOB Pref. Plat Visa DBS Woman’s World Amazon and other e-commerce Online food (Deliveroo, Food Panda, Uber Eats) Transportation (Uber) Air tickets, Expedia, Orbitz, and other OTAs Mobile Payments (Samsung, Android, ApplePay) Entertainment (movie tickets, Spotify, Steam) Government services (season parking, library fines, ACRA reports) Caps on 10X None $12,000 per year $12,000 per year $2,000 per month *The above chart was made as per the T&C of the cards. MCCs are messy business and in reality, banks may award 10X to particular merchants even within “red” categories. A great resource you can use to check whether a particular merchant awards 10X can be found here- http://bit.ly/2guKnAY Illustration of 10X Opportunities at Online Merchants for Online-Bonus Cards*
Why shouldn’t I use cashback / fixed rebate cards? Fixed rebate/ cashback cards are poor value and usually come with many conditions attached; to pay the annual fee on a cashback card is just silly 1.5% on everythingCashback Capped Annual Fee (Waiver) Breakeven spend None S$171.20 (1 Year) S$11,413 5% on one of the following- dining, travel, shopping, groceries, 1% otherwise S$30 per transaction S$180 (1 Year) S$3,600- S$18,000 0.3%-6% depending on category Depends on category S$128.40 (1 Year) S$2,140-S$42,800 6% weekend dining, 3% weekday dining, online, groceries, telecoms, 0.3% others Min Spend S$600/ month Cashback Capped Annual Fee (Waiver) Breakeven spend Min Spend S$80/ month S$192.60 (2 Years) S$200 a quarter 0.5-3% depending on monthly spend $3,000/month for 3% S$192.60 (1 Year) None S$3,210-S$64,200 S$192.60 (1 Year) S$888/month 8% groceries, petrol, dining, 0.25% others S$25/ month S$2,408-S$77,040 NoneNone S$6,420-S$38,520
What specialized spending cards do I need? Dining, online spending, shopping, overseas purchases, contactless and petrol are the main categories that attract points bonuses UOB Visa Signature HSBC Advance DBS Woman’s World UOB PPV Citibank Rewards Maybank Horizon HSBC Revolution OCBC Titanium Rewards Dining   4 mpd     3.2 mpd  2 mpd  Online  4 mpd  4 mpd  4 mpd  4 mpd  4 mpd    4 mpd Shopping (Offline)      4 mpd    4 mpd Overseas (General)  4 mpd^        Contactless  4 mpd    4 mpd     Petrol  4 mpd      3.2 mpd   Caps Max $2,000 per statement period, min $1,000 none $2,000 per month $24,000 a year $12,000 a year none none $12,000 a year ^Online transactions in Singapore Dollars or in foreign currencies at merchants with payment gateway in Singapore will earn 0.4 mpd *Not all bonus categories are featured. DBS Woman’s World Card, for example, offers a bonus of 1.2 miles per $1 on overseas spending (vs the usual 0.4 rate). This has not been featured because there exist much superior cards offering 2.0/2.4 miles per $1 on overseas spending eg Citibank Premiermiles /UOB PRVI Recommended Bonus Categories by Card*
What general spending cards do I need? General spending cards are for use in any situation where specialized earning opportunities are not available DBS Altitude Citibank Premier Miles ANZ Travel Card AMEX Krisflyer Ascend UOB PRVI Miles OCBC Voyage HSBC Visa Infinite SCB Visa Infinite Maybank Visa Infinite Types AMEX, Visa AMEX, Visa Visa AMEX AMEX, Visa, MC Visa Visa Visa Visa Local Spend 1.2 1.2/1.3 1.4 1.2 1.4 1.0 1 (1.25 if spend >$50K in prev year) 1 (1.4 if spend >$2K p.m) 1.2 Overseas spend 2.0 2.0 1.4 (2.8 if Australia/ NZ) 1.2 (2.0 during June/ Dec) 2.4 2.3 2 (2.25 if spend >$50K in prev year) 1 (3.0 if spend >$2K p.m) 2.0 Other Bonuses 3- Airlines + Online Hotel Bookings N/A N/A 2- SQ/MI 6- Expedia + UOB Travel 2.3- Dining N/A N/A N/A Annual Fee (Renewal Miles) S$192.60 (10,000) S$192.60 (10,000) S$200 (10,000) S$337.05 (None) S$256.80 (None- waived and 20,000 miles if annual spending >$50K) S$488 (15,000) OR S$3,210 (150,000) S$488 (30,000) S$588.50 (35,000) S$600 (None) Minimum Income S$30K S$50K S$50K S$50K S$80K S$120K S$120K S$150K S$150K Major Miles Earning Cards in Singapore, by Income Requirement Also consider- card benefits (limo/lounge/concierge)
What are the different types of rewards? Unlike debit cards, credit cards offer rewards programs. These rewards programs can be broadly classified into fixed and variable rebates Credit Cards Fixed Rebates (Cashback) Variable Rebates (Miles & Points) Debit Cards No Rewards Target Audience Students, individuals with annual income <$30K, retirees Pros Cons No chance of overspending and accumulating card debt Non-existent rewards program Low spending individuals who prefer cash in hand “Captive” currency subject to devaluation Examples Cashback subject to minimum spend and capped at low levels High spending individuals who prefer travel as a reward No substitute for cash Description Draws funds directly from your bank account to settle bills in full at time of transaction Returns a certain % of spending back to you in the form of a cash rebate on your credit card statement Awards points based on spending which can be converted into miles or other rewards (eg shopping vouchers) No cap on points earned, higher potential rebate than cashback Potential Rebate 0% 1-5% 1-12%* *Potential rebate for variable rebates card assumes a valuation of up to 3 cents per mile and an earn rate of 4 miles per $1, see section on valuation of a mile
What else do I need to know about cards? Banks differ in their earning blocks, conversion fees, minimum conversion and expiry DBS UOB OCBC Citibank ANZ Maybank SCB HSBC Earning Blocks $5 $5 $1 $1 $1 $1 $1 $1 Conversion Fee $25 $25 $25 $25 $25 $26.75 $26.75 $42.80 Paid Per transfer1 Per transfer Per transfer Per transfer Per transfer Per transfer Per transfer Per Year Minimum Conversion 10,000 10,000 1,000 500 5,000 (KF), 2,000 (AM) 2,000 1,000 5,000 Expiry None for Altitude, 1 year for others 2 Years None for Voyage Miles, 5 years for others None for Premier miles, 5 years for others 5 Years None for Rewards Infinite members, 1 year for others None for Visa Infinite 3 Years Key Information on Credit Cards, by Bank
THANK YOU 32 for attending “ TO P T I P S F O R E A R N I N G A I R M I L E S ” CONGRATULATIONS! Simply by attending this session live you have EARNED TWO BONUS PRIZE ENTRIES in the iPaymy Maldives Holiday Prize Promotion. Want to increase your chances of winning? See next page for details. See full details, terms and conditions on the prize website. *To qualify for additional prize entries the email address registered for each activity must be the same. Win a luxurious getaway here!
WIN A TRIP TO THE MALDIVES WITH INCREASE YOUR CHANCE OF WINNING!! EARN UP TO 10 HOLIDAY PRIZE ENTRIES THIS DECEMBER BY: 33 See full details, terms and conditions on the prize website. *To qualify for additional prize entries the email address registered for each activity must be the same. EARN AN EXTRA ACTION REQUIRED WHERE TIMELINE 1 prize entry See the Maldives Holiday prize details & ENTER the PRIZE DRAW OFFICIALLY Maldives Holiday Prize page By 31 December 2016 2 prize entries Attend Information Session 2: “TOP TIPS FOR REDEEMING AIR MILES” Learn from The MileLion about Frequent Flyer programs and how to get the best value when redeeming air miles. Registration page 8 December (this Thursday) 5 prize entries Make a successful Rental Payment over $1,500 via www.iPaymy.com www.iPaymy.com By 31 December 2016
EARN AIR MILES WITH iPaymy has built solutions to enable you to convert your expenses into rewards. One of the solutions is a platform that provides a suite of services for tenants, agents & landlords. Through this platform tenants can pay rent & other expenses in Singapore on their credit card to earn huge air miles. • Pay rental expenses in Singapore using iPaymy.com in “My Properties” • Make “Other Payments” including: • Education expenses - school fees, transport fees & Extra Curricula Activities (ECA) • Condo Management Fees - Rental Security & Good Faith Rental Deposits • Trade Services - air con servicing, plumber, handyman services • Supplier payments – ideal for a variety of other supplier payments. Other helpful services: • “My Alerts” - set reminders to keep you organised (never forget air conditioner servicing again!) • “My Documents” - protect your rental deposit with transparent storage of important documents & images. Additional information: • iPaymy.com charges a 2.6% software licensing fee on payments made by credit cards. • Please allow 5 business days for payment to be processed. Refer to our FAQs for more details. 34
TOP TIPS FOR EARNING AIR MILESA SPECIAL PRESENTATION 5 DEC 2016 © The Milelion, All Rights Reserved. No portion of the content herein may be used or reproduced without the prior written consent of The Milelion www.milelion.com | admin@milelion.com | Slide design by June Fong 35

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Top tips for earning air miles

  • 1.
    TOP TIPS FOREARNING AIR MILESA SPECIAL PRESENTATION 5 DEC 2016 © The Milelion, All Rights Reserved. No portion of the content herein may be used or reproduced without the prior written consent of The Milelion www.milelion.com | admin@milelion.com | Slide design by June Fong 1
  • 2.
    PREFACE • The followingslides were created for an iPaymy webinar and should not be read in isolation without the accompanying video • The Miles and Points Game is dynamic and information often quickly goes out of date. Future readers of this presentation should take into account the date of creation (5 Dec 2016) of this document. • You should not play the Miles and Points Game if you have reason to believe you will have difficulty paying off your balance in full, on time, every month. Abuse of credit can lead to detrimental consequences for you and your loved ones. • The Miles and Points Game may sometimes require you to engage in rather irregular behavior. Your friends and family may think you mad. Try not to rub it in when you’re sipping Krug at 30,000 ft. 2
  • 3.
    WHO ARE YOUAND WHAT ARE YOU DOING ON MY COMPUTER? < DO NOT ADJUST YOUR SCREENS > Aaron Founder of The Milelion Likes walks on the beach, candlelit dinners and you Random Vaguely Impressive Numbers ~400,000 lifetime miles flown 65 airports across 30 countries ~300 nights in hotels Earned 2M+ miles through credit cards, flying and other tricks Foreign women successfully wooed: 0 3
  • 4.
    WHAT WILL WELEARN DURING THIS SESSION? This two-part webinar will cover credit card rewards and airline frequent flyer programs • Basics of Credit Card Reward Programs • Creating a credit card strategy that works for you • A primer on airline frequent flyer programs • How and how not to redeem your miles • How to value the miles that you earn • “Fuel Dumping/ 3X” • Manufactured Spending Strategies • Anything that violates the T&C of banks + airline rewards programs • Hidden City/ Throwaway ticketing • Hotel/Rental Car booking strategies W H AT YO U W I L L L EA RN W H AT YO U W I L L N OT L E A RN 4
  • 5.
    WHAT IS TRAVELHACKING?Travel hacking is a philosophy that travelling well doesn’t have to cost more Travel Hacking (noun/verb/I can’t remember the difference and my mom was an English teacher) 1. The art of travelling the world in First Class, staying in 5 Star hotels and enjoying the finer things in life while paying a fraction of the price 2. Free stuff can’t bluff VA LU E AC C E SS 1 2 “Travel hacking helps me save money” “Travel hacking gives me access to experiences I wouldn’t have been able to afford” 5
  • 6.
    WHAT DOES TRAVELHACKING REQUIRE?The hobby of travel hacking is not suited for everyone- you need to be willing to invest the time and energy to make it work PAT IEN CE M E T ICU LOUSNESS 1 2 • Willing to sign up for multiple cards and set up GIRO payments for each • Remembering to use the right card at the right time • Remembering to get annual fees waived when due (or paying them to get miles) • Tracking your points to make sure they have credited properly S E L F - CONTROL 3 • Not spending beyond your means 6
  • 7.
    But, when itpays off, man, it really pays off. 7
  • 8.
    WHY DO INEED CREDIT CARDS?Credit cards are essential to any miles building strategy because earning miles through flights alone is insufficient • The majority of your miles will be earned through credit cards, not flying • SIN-SFO economy @ 50% accrual and S$1,956 cost • Miles from flying= 8,440 • Miles from credit card= 7,824 Singapore Airlines Mileage Accrual Chart, by Ticket Class FLIGHTS (~20%) CREDIT CARDS (~80%) 8
  • 9.
    WHAT DO IGET WHEN I PAY WITH A CARD?The type of rewards you get depends on the card you use I get a strange feeling of emptiness I get a certain % of cash rebate at the end of the month I earn points with my bank I convert the points to frequent flyer miles by paying a conversion fee Debit Card Cash Rebate Credit Card Miles/ Points Card Normally capped and subject to many T&C Also, somewhere a kitten dies CARD/REWARD PAYOFF, BY TYPE OF CARD Spend $100 on my card And you are a winner and also very handsome 9
  • 10.
    WHAT ARE THEDIFFERENT TYPES OF REWARDS? Unlike debit cards, credit cards offer rewards programs. These rewards programs can be broadly classified into fixed and variable rebates CREDIT CARDS FIXED REBATES (CASHBACK) VARIABLE REBATES (MILES & POINTS) DEBIT CARDS NO REWARDS 10
  • 11.
    WHY SHOULDN’T I USE CASHBACK /FIXED REBATE CARDS? Fixed rebate/cashback cards are poor value and usually come with many conditions attached FIXED REBATES CASHBACK No caps on cashback! No minimum spend! 1.5% cashback only 5% cashback on dining/ travel/ shopping/ groceries! $30 cap per transaction, 1% on everything else. Must accumulate min $50 to redeem 9% off dining! Minimum spend $700 a month, capped at $30 a month 8% cashback on groceries, petrol and dining! $25 cap per month, 0.25% on everything else 6% cashback on dining! Weekend dining only. 3% on weekday dining, groceries, online. 0.3% on everything else. $80 cap per month 3% cashback on everything! Minimum spend $3,000 a month, capped at $200 per quarter 11
  • 12.
    WHAT DO VARIABLE REBATE CARDS GIVE ME? Thevalue of variable rebates depend on how you use them ILLUSTRATIVE EXAMPLE: VALUE OF DBS POINTS IF REDEEMED FOR… VOUCHERS MILES VOUCHERS 1 POINT = ~1.7 CENTS MILES 1 POINT = 2 MILES UNDERSTANDING THE VALUE OF A MILE IS A CRUCIAL PIECE OF INFORMATION. HOW DO WE VALUE A MILE? 12
  • 13.
    SQ Return Tripto Paris, redeemed on … Economy Premium Economy Business First RETAIL PRICE S$1,177- 1957 S$2,977 S$6,508 S$13,836 MILES + TAXES (SAVER) 59,500 Miles +S$557 106,250 Miles +S$557 136,000 Miles +S$658 182,750 Miles +S$686 IMPLIED VALUE OF 1 MILE 1.0-2.4 cents/ miles 2.3 cents/ miles 4.3 cents/ miles 7.2 cents/ miles INCREMENTAL PRICE 52%-153% 119% 113% INCREMENTAL MILES 79% 28% 34% WHAT IS THE THEORETICAL VALUE OF A MILE?The value of a mile depends on what you redeem it for- you get more value redeeming for premium cabins than economy 13
  • 14.
    HOW SHOULD IVALUE MY MILES? Although a mile in theory can buy up to 7 cents of value, the valuation of a mile is as much a philosophical exercise as a mathematical one OTHER RELEVANT FACTORS IN VALUING A MILE Would I really have paid $10,000 for a First Class seat? What is the likelihood that I will be able to find saver space? 1 2 What about the discounts/ bonus interest I forwent when building miles? 3 • What is my alternative if I were not able to redeem a First Class seat? • Should we be pegging the value to retail price or what we would be willing to pay? • OCBC/ SCB Bonus$aver/ UOB One accounts • Bank dining discounts at restaurants • Saver award space on certain routes is highly restricted by Krisflyer and subject to waitlist • SIN-CDG in business saver= 136K miles • SIN-CDG in business standard= 204K miles ALTHOUGH A MILE CAN BUY UP TO 7 CENTS OF VALUE, A CONSERVATIVE VALUATION OF MILES WOULD BE AROUND 2-3 CENTS EACH 14
  • 15.
    WHERE WILL MYCREDIT CARD MILES COME FROM? The majority of your credit card miles will come from category/ specialised spending Variable Rebates (Miles & Points) General Spending Specialized Spending • Dining • Online spending • Paywave • Petrol • Shopping • Overseas spend • Anything that does not fall into the specialized spending category Breakdown of Miles Earned Credit cards- Category spending (~50%) Credit cards- General spending (~30%) Flights (~20%) WHY CAN’T I JUST USE ONE CARD FOR EVERYTHING? 15
  • 16.
    WHY CAN’T IUSE ONE CARD FOR EVERYTHING? A single-card strategy will always generate fewer miles than using a portfolio because of the presence of bonus categories EXAMPLE: $30,000 OF ANNUAL CARD SPENDING With One Card 30% Dining 30% Online Purchases 10% Shopping 10% Overseas Spending 20% Misc. Local Spending With Card Portfolio Total Miles= 45,000 ~1X Economy Round Trip to Australia / Middle East Total Miles= 104,400 1.4 miles/ $1 1.4 miles/ $1 1.4 miles/ $1 2.4 miles/ $1 1.4 miles/ $1 4 miles/ $1 4 miles/ $1 4 miles/ $1 4 miles/ $1 1.4 miles/ $1 ~1X Suites Round Trip to Tokyo OR ~1X Suites One Way to New York 16
  • 17.
    v v v v v v v WHAT SPECIALISED SPENDINGCARDS DO I NEED? Think: which bonus categories do I spend the most on? 17
  • 18.
    WHAT GENERAL SPENDINGCARDS DO I NEED? Think: which specialised spending card am I accumulating miles with? GENERAL SPENDING: ANYTHING THAT ISN’T SPECIALISED 18
  • 19.
    ? QUESTIONS TO ASK WHENGETTING A CARD Points awarded for every $1 or $5? How many points do I need to accumulate before cashing out? How long do I have to accumulate points before I need to convert them to miles? How much do I need to pay to convert my points to miles? How much is the annual fee and what do I get in return? E A RN IN G B LOC KS CO N VERSION F E E M I N IMUM CO N VERSION E X P IRY O F P O INTS A N NUAL F E E 1 2 3 4 5 19
  • 20.
    SHOULD I BEPAYING ANNUAL FEES? Whether or not you should pay annual fees depends on (1) whether you need something in return (2) the price of the miles (3) whether you need them Annual Fee Renewal Miles CPM HSBC Visa Infinite $488 30,000 1.63 SCB Visa Infinite $588.50 35,000 1.68 DBS Altitude $192.60 10,000 1.93 Citibank Premiermiles $192.60 10,000 1.93 ANZ Travel Card $200 10,000 2.00 Citibank Prestige $535 25,000 2.14 OCBC Voyage $488/ $3,210 15,000 /150,000* 3.25/ 2.14 • Rule #1: Never pay an annual fee if you get nothing in return • Banks earn whenever you spend with their cards- why should you pay them to earn money for them? • Rule #2: If miles are offered, don’t pay more than 2 cpm • Rule #3: If you are already earning a healthy miles income you may not want further cash outflow • Some banks will waive annual fees if you spend above a certain threshold Commentary *OCBC offers an option of paying $488 to get 15,000 Voyage Miles or $3,210 to get 150,000 Krisflyer Miles. Voyage miles are a very different species from Krisflyer miles and to explain it in this presentation would put many to sleep. TL;DR, 1 Voyage Mile is worth slightly more than 1 Krisflyer mile, although they convert on a 1:1 basis. Read my analysis here- http://bit.ly/2gw1GPF 20
  • 21.
    HOW I SHOULDDEVELOP MY CREDIT CARD STRATEGY? Your credit card strategy should be based on your objectives, spending patterns and what is accessible to you D E C I D E O B J ECT IVES 1 A N ALYSE S P E N DING PAT T ERNS ASSE SS C A R D O F F E RIN GS BASE D O N ( 1 ) & ( 2 ) 2 3 • Where do I want to go? • How do I want to get there? • When do I want to go? • How often am I likely to travel? • How much do I usually spend in a month, and how is that broken down into different categories? • Do I have any big ticket expenditures (renovation, wedding, business trip) coming up? • Which cards can I access based on my income? • Which cards have points that will last long enough to match my earning horizon? • Which cards provide bonuses in the categories I most heavily spend? 21
  • 22.
    HOW ELSE CANI EARN MILES?Here are some other ways of earning miles you might not have thought about S H O P P ING T H ROU GH K R I SFLY ER S P RE E 1 M I L ET IZING YO U R R E G U LAR PAYMEN TS M I L ES E A RNING T I M E D E P OSIT 2 3 Placement SGD Miles Time Deposit S$27,000 – S$162,000 (6 months) 10,000 KrisFlyer Miles for every S$27,000 fresh funds deposited capped at 60,000 miles • Earn miles for your rental & other regular payments with iPayMy • Paying with card earning 4 mpd and 2.6% fee: 1 mile= 0.65 cpm • Paying with a card earning 1.4 mpd and 2.6% fee: 1 mile=1.86 cpm • Earn miles when you shop online via Krisflyer spree (www.krisflyerspree.com) 22
  • 23.
    APART FROM CREDITCARD SPENDING, HOW ELSE CAN I EARN MILES? Here are some other ways of earning miles you might not have thought about I D E N T IFYING O P P ORT UNITIE S TO T U RN G E N E RAL S P EN D ING I N TO S P E C IALISE D S P EN D ING 4 M I LESBAC K H OT EL BO OK INGS OT H ERS 5 6 • Taxi vs Uber • Grocery store vs Redmart • Regular rental & other payment vs iPaymy • Official airline/hotel site vs OTA • Regular payment vs Samsung/ Android/ Apple/ Paywave • Kaligo- 10 miles per $1 • Pointshound • Rocketmiles • Magazine subscriptions • Esso Smiles • Passion Card Tap For More • M1 Sunperks • Shell Escape points • Mobile phone roaming • Club21 • Outlet shopping 23
  • 24.
    QUESTIONS ? Find outmore at www.iPaymy.com 24
  • 25.
    FURTHER RESOURCES The followingare links you may find useful in your miles journey • The Milelion - travel better for less: www.milelion.com • The Milelion Directory - index of all articles on the site: http://milelion.com/making-the-most-out-of-the-milelion/ • Does spending on (insert merchant name here) get a bonus? A crowdsourced Google document: https://docs.google.com/spreadsheets/d/1ffbzrIlK7iTO_IAT7nzk8ULWf1zsRX9F-rniLbRwwR4/edit • Flyertalk thread on the latest news on miles earning credit cards in Singapore: https://www.flyertalk.com/forum/singapore-airlines-krisflyer/1076196-best-credit-cards-kf-miles-accrual-master- thread-430.html • Hardwarezone forum where people post credit card deals: http://forums.hardwarezone.com.sg/credit-cards-line- credit-facilities-243/ • Boarding Area - a collection of travel hacking blogs (mostly US-focused, some UK): www.boardingarea.com
  • 26.
    What card doI use for online spending? Online spending is slightly more complicated- not all online spending is made equal, so be aware of your options Online Spending HSBC Advance Citibank Rewards UOB Pref. Plat Visa DBS Woman’s World Amazon and other e-commerce Online food (Deliveroo, Food Panda, Uber Eats) Transportation (Uber) Air tickets, Expedia, Orbitz, and other OTAs Mobile Payments (Samsung, Android, ApplePay) Entertainment (movie tickets, Spotify, Steam) Government services (season parking, library fines, ACRA reports) Caps on 10X None $12,000 per year $12,000 per year $2,000 per month *The above chart was made as per the T&C of the cards. MCCs are messy business and in reality, banks may award 10X to particular merchants even within “red” categories. A great resource you can use to check whether a particular merchant awards 10X can be found here- http://bit.ly/2guKnAY Illustration of 10X Opportunities at Online Merchants for Online-Bonus Cards*
  • 27.
    Why shouldn’t Iuse cashback / fixed rebate cards? Fixed rebate/ cashback cards are poor value and usually come with many conditions attached; to pay the annual fee on a cashback card is just silly 1.5% on everythingCashback Capped Annual Fee (Waiver) Breakeven spend None S$171.20 (1 Year) S$11,413 5% on one of the following- dining, travel, shopping, groceries, 1% otherwise S$30 per transaction S$180 (1 Year) S$3,600- S$18,000 0.3%-6% depending on category Depends on category S$128.40 (1 Year) S$2,140-S$42,800 6% weekend dining, 3% weekday dining, online, groceries, telecoms, 0.3% others Min Spend S$600/ month Cashback Capped Annual Fee (Waiver) Breakeven spend Min Spend S$80/ month S$192.60 (2 Years) S$200 a quarter 0.5-3% depending on monthly spend $3,000/month for 3% S$192.60 (1 Year) None S$3,210-S$64,200 S$192.60 (1 Year) S$888/month 8% groceries, petrol, dining, 0.25% others S$25/ month S$2,408-S$77,040 NoneNone S$6,420-S$38,520
  • 28.
    What specialized spendingcards do I need? Dining, online spending, shopping, overseas purchases, contactless and petrol are the main categories that attract points bonuses UOB Visa Signature HSBC Advance DBS Woman’s World UOB PPV Citibank Rewards Maybank Horizon HSBC Revolution OCBC Titanium Rewards Dining   4 mpd     3.2 mpd  2 mpd  Online  4 mpd  4 mpd  4 mpd  4 mpd  4 mpd    4 mpd Shopping (Offline)      4 mpd    4 mpd Overseas (General)  4 mpd^        Contactless  4 mpd    4 mpd     Petrol  4 mpd      3.2 mpd   Caps Max $2,000 per statement period, min $1,000 none $2,000 per month $24,000 a year $12,000 a year none none $12,000 a year ^Online transactions in Singapore Dollars or in foreign currencies at merchants with payment gateway in Singapore will earn 0.4 mpd *Not all bonus categories are featured. DBS Woman’s World Card, for example, offers a bonus of 1.2 miles per $1 on overseas spending (vs the usual 0.4 rate). This has not been featured because there exist much superior cards offering 2.0/2.4 miles per $1 on overseas spending eg Citibank Premiermiles /UOB PRVI Recommended Bonus Categories by Card*
  • 29.
    What general spendingcards do I need? General spending cards are for use in any situation where specialized earning opportunities are not available DBS Altitude Citibank Premier Miles ANZ Travel Card AMEX Krisflyer Ascend UOB PRVI Miles OCBC Voyage HSBC Visa Infinite SCB Visa Infinite Maybank Visa Infinite Types AMEX, Visa AMEX, Visa Visa AMEX AMEX, Visa, MC Visa Visa Visa Visa Local Spend 1.2 1.2/1.3 1.4 1.2 1.4 1.0 1 (1.25 if spend >$50K in prev year) 1 (1.4 if spend >$2K p.m) 1.2 Overseas spend 2.0 2.0 1.4 (2.8 if Australia/ NZ) 1.2 (2.0 during June/ Dec) 2.4 2.3 2 (2.25 if spend >$50K in prev year) 1 (3.0 if spend >$2K p.m) 2.0 Other Bonuses 3- Airlines + Online Hotel Bookings N/A N/A 2- SQ/MI 6- Expedia + UOB Travel 2.3- Dining N/A N/A N/A Annual Fee (Renewal Miles) S$192.60 (10,000) S$192.60 (10,000) S$200 (10,000) S$337.05 (None) S$256.80 (None- waived and 20,000 miles if annual spending >$50K) S$488 (15,000) OR S$3,210 (150,000) S$488 (30,000) S$588.50 (35,000) S$600 (None) Minimum Income S$30K S$50K S$50K S$50K S$80K S$120K S$120K S$150K S$150K Major Miles Earning Cards in Singapore, by Income Requirement Also consider- card benefits (limo/lounge/concierge)
  • 30.
    What are thedifferent types of rewards? Unlike debit cards, credit cards offer rewards programs. These rewards programs can be broadly classified into fixed and variable rebates Credit Cards Fixed Rebates (Cashback) Variable Rebates (Miles & Points) Debit Cards No Rewards Target Audience Students, individuals with annual income <$30K, retirees Pros Cons No chance of overspending and accumulating card debt Non-existent rewards program Low spending individuals who prefer cash in hand “Captive” currency subject to devaluation Examples Cashback subject to minimum spend and capped at low levels High spending individuals who prefer travel as a reward No substitute for cash Description Draws funds directly from your bank account to settle bills in full at time of transaction Returns a certain % of spending back to you in the form of a cash rebate on your credit card statement Awards points based on spending which can be converted into miles or other rewards (eg shopping vouchers) No cap on points earned, higher potential rebate than cashback Potential Rebate 0% 1-5% 1-12%* *Potential rebate for variable rebates card assumes a valuation of up to 3 cents per mile and an earn rate of 4 miles per $1, see section on valuation of a mile
  • 31.
    What else doI need to know about cards? Banks differ in their earning blocks, conversion fees, minimum conversion and expiry DBS UOB OCBC Citibank ANZ Maybank SCB HSBC Earning Blocks $5 $5 $1 $1 $1 $1 $1 $1 Conversion Fee $25 $25 $25 $25 $25 $26.75 $26.75 $42.80 Paid Per transfer1 Per transfer Per transfer Per transfer Per transfer Per transfer Per transfer Per Year Minimum Conversion 10,000 10,000 1,000 500 5,000 (KF), 2,000 (AM) 2,000 1,000 5,000 Expiry None for Altitude, 1 year for others 2 Years None for Voyage Miles, 5 years for others None for Premier miles, 5 years for others 5 Years None for Rewards Infinite members, 1 year for others None for Visa Infinite 3 Years Key Information on Credit Cards, by Bank
  • 32.
    THANK YOU 32 for attending“ TO P T I P S F O R E A R N I N G A I R M I L E S ” CONGRATULATIONS! Simply by attending this session live you have EARNED TWO BONUS PRIZE ENTRIES in the iPaymy Maldives Holiday Prize Promotion. Want to increase your chances of winning? See next page for details. See full details, terms and conditions on the prize website. *To qualify for additional prize entries the email address registered for each activity must be the same. Win a luxurious getaway here!
  • 33.
    WIN A TRIPTO THE MALDIVES WITH INCREASE YOUR CHANCE OF WINNING!! EARN UP TO 10 HOLIDAY PRIZE ENTRIES THIS DECEMBER BY: 33 See full details, terms and conditions on the prize website. *To qualify for additional prize entries the email address registered for each activity must be the same. EARN AN EXTRA ACTION REQUIRED WHERE TIMELINE 1 prize entry See the Maldives Holiday prize details & ENTER the PRIZE DRAW OFFICIALLY Maldives Holiday Prize page By 31 December 2016 2 prize entries Attend Information Session 2: “TOP TIPS FOR REDEEMING AIR MILES” Learn from The MileLion about Frequent Flyer programs and how to get the best value when redeeming air miles. Registration page 8 December (this Thursday) 5 prize entries Make a successful Rental Payment over $1,500 via www.iPaymy.com www.iPaymy.com By 31 December 2016
  • 34.
    EARN AIR MILESWITH iPaymy has built solutions to enable you to convert your expenses into rewards. One of the solutions is a platform that provides a suite of services for tenants, agents & landlords. Through this platform tenants can pay rent & other expenses in Singapore on their credit card to earn huge air miles. • Pay rental expenses in Singapore using iPaymy.com in “My Properties” • Make “Other Payments” including: • Education expenses - school fees, transport fees & Extra Curricula Activities (ECA) • Condo Management Fees - Rental Security & Good Faith Rental Deposits • Trade Services - air con servicing, plumber, handyman services • Supplier payments – ideal for a variety of other supplier payments. Other helpful services: • “My Alerts” - set reminders to keep you organised (never forget air conditioner servicing again!) • “My Documents” - protect your rental deposit with transparent storage of important documents & images. Additional information: • iPaymy.com charges a 2.6% software licensing fee on payments made by credit cards. • Please allow 5 business days for payment to be processed. Refer to our FAQs for more details. 34
  • 35.
    TOP TIPS FOREARNING AIR MILESA SPECIAL PRESENTATION 5 DEC 2016 © The Milelion, All Rights Reserved. No portion of the content herein may be used or reproduced without the prior written consent of The Milelion www.milelion.com | admin@milelion.com | Slide design by June Fong 35