As you all are aware, there are various cashback credit cards that require a minimum spending in order to get a higher cashback percentage. For myself in particular, I try to optimize my credit card and current account via UOB’s One Card and One Account.
However, I find that for certain months, I am struggling to hit the S$500 monthly minimum spend, failing which, I would lose out on both the S$50 UOB One Card rebate, as well as the interest in my UOB One Account. The S$500 monthly spending makes a world of difference; by spending <S$500 in just one month and with an account balance of S$75,000, you would lose a total of S$200 (S$50 from failing to hit 3 months of consistent S$50 spending on the UOB one card, and ~S$150 from failing to hit S$500 spending in UOB One Account).
So whats the optimal strategy?
Based on my personal transaction strategy as well as research from other esteemed personal finance authors, I find that there are 3 main categories on how you can optimize your rewards!
Vouchers (NTUC / Capitaland)
Vouchers are a store of value, and they are great if your main problem is the timing of your expenses. In particular, if you are going to spend money on groceries anyway, but you are nearing your cut-off date for spending S$500, then head over to NTUC supermarket and buy their vouchers. They come in as little as S$5 denominations, and as per www.whatcard.sg, they are tagged with the MCC code of 5411.
Wallets (Grab, Fave, YouTrip)
These are yet another store of value. Similar to vouchers, you can clock credit card “expenses” by funding your wallets to spend another day.
Honestly, this is the one method that I have not used (and therefore cannot really validate for you readers). There are several highly respected personal finance blogs such as Seedly, TheBoyWhoProcrastinates and Heartlandboy who have specifically validated this transaction method, which involves paying a 2.6% fee on top of your regular cash/giro payments, making it eligible for you to earn rewards. This strategy makes sense in 2 instances; the first is it allows you to hit your minimum spending, enabling you to earn bonus cashback on other categories. For example, Lets say you charge your season parking of S$200/month. If you use CardUp on your BOC Family Card, you pay S$205.2 for this transaction, but you reduce your minimum spending to S$594.80 (calculated by S$800 - S$205.20), which would make it hell of alot easier to hit it and get that 5% rebate on online spending!
So whats the catch?
The problem for wallets and CardUp, is that the credit card companies have different treatment towards these wallets. I think this was developed to prevent people from exploiting these hacks to fulfill minimum spending requirements. For example, a HWZ forum member, ThreeStep, has confirmed that CIMB excludes FavePay top-ups (on transactions to get a bonus 9.8% cashback for a total of 10% cashback, which means you only get 0.2% cashback for it) The link is here: https://forums.hardwarezone.com.sg/credit-cards-line-credit-facilities-243/cimb-visa-signature-4821826-120.html . The community also feedbacked that there are now multiple credit card companies such as DBS that exclude CardUp. The link is here: https://forums.hardwarezone.com.sg/credit-cards-line-credit-facilities-243/cardup-do-not-post-ask-referral-code-5632584-108.html
Therefore, for you to optimize your rewards, you may want to check out whether the credit card companies include or exclude such “expenses” on Wallets and CardUp, by using a website like www.whatcard.sg.
You can meet minimum spending requirements by purchasing vouchers, funding wallets and using CardUp. However in the case of wallets and CardUp, use www.whatcard.sg to check if they are excluded transactions before doing so to prevent a situation where you unexpectedly lose your rewards.
If you enjoyed this article, you may also be interested in:
- Best Cashback Card for One-Off & Lump Sum Spending (Updated July 2019)
- 7 Questions with WhatCard co-founder Glenn Toh (SingSaver interview)
- Best Credit Card Strategy to Save More on Grab (July 19)
- How I Got 72,000 Krisflyer Miles (worth $1,440) for Free
- Why I would suggest mile chasers to think twice about applying for the BOC Miles Card
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