How Do Mile Cards Work?

It is no surprise that cashback cards are by far the most popular choice among Singaporeans when it comes to credit cards. They are easy to understand, and you get your reward credited into your card account in a month or two. That was also why my first credit cards were all cashback ones.

Two things stopped me from exploring the miles side of things in the past:

  1. I didn’t understand it
  2. I don’t even fly that frequently

Both objections disappeared really quickly; I’ll explain why in a separate post. First, here is how you fly with mile cards:

1. Earn Bank Points

Given how straightforward cashback was, miles aren’t immediately obvious. When you spend on a mile card, what you are really getting are bank points. For instance, OCBC Titanium Rewards (TR) gives you OCBC$, while DBS Women’s World Card (WWMC) gives you DBS Points. To make things more confusing, bank points have different valuations. For instance, 2.5 OCBC$1 is equivalent to a single air mile while a DBS Point is worth 2.

Mile enthusiasts thus value each card’s worth based on how many miles per spend it gives. OCBC TR gives 10 OCBC$ for each dollar spent, and DBS WWMC gives 5 DBS Points for each dollar spent. They are hence on par in that they both give 4 miles per dollar (mpd).

2. Convert them into miles

Once you have accumulated enough bank points, you have the option to convert them into air miles with the airline of your choice. This depends on whom your bank has partnered with, with some banks having more choice than others. Singapore Air is obviously a very popular choice in this sunny island of ours and their KrisFlyer programme features prominently in every bank’s rewards catalogues.

There is usually a fee to be paid, again dependent on your bank, as well as fixed blocks of points that can be converted. This means that if you have 12,000 points, 2,000 would be left stranded since most banks allow conversion of points to miles in 10,000-point blocks.

This also means that one would be a bit more careful about signing up for cards from various banks, as having multiple pockets of bank points also means that you have to incur multiple conversion fees, and also increase the chance of having miles stranded in each account.

Some cards, like the Amex KrisFlyer and UOB KrisFlyer cards, directly deposit miles into your KrisFlyer account without the need for conversion.

3. Redeem your miles for flights

Once you have transformed your points into miles, you can use them to redeem your desired flights. Redemption is also a whole process on its own, and highly dependent on your airline of choice, but “free” flights, especially business/first class ones, are well worth the work.

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