Cashback tops in influencing card choice: Poll

Jupiter2017

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http://www.straitstimes.com/business/invest/cashback-tops-in-influencing-card-choice-poll
A version of this article appeared in the print edition of The Sunday Times on January 21, 2018, with the headline 'Cashback tops in influencing card choice: Poll'.
Lorna Tan Invest Editor/Senior Correspondent
Cashback tops in influencing card choice: Poll
It was also most-used credit card feature; POSB Everyday Card ranked as most popular

Cash is king, even when it comes to using credit cards, according to a new survey. It found that the cashback feature is the "champion benefit" influencing card choice as well as the most-used feature.
"People want simplicity and immediate benefits that help them claw back a portion of expenses expended via credit card spend," said Mr Rohith Murthy, co-founder and managing director of financial comparison platform SingSaver.com.sg, which commissioned the survey.
The poll queried 785 respondents here with an almost equal split between females and males. They had an average monthly income of $5,524 and an average household aggregate monthly income of $9,615. The survey was conducted between September and November last year.
"For instance, the POSB Everyday Card offers cashback across a wide variety of spending, including medical, petrol, groceries, health and beauty, and utilities," noted Mr Murthy.
"The card also has a strong utility aspect - cardholders can use the card for their bus and MRT rides. This is a strong win as it represents baseline functionality for the everyday Singaporean."
The POSB Everyday Card took pole position, and by a wide berth, across three measured qualitative tiers. It was the most-owned card (43 per cent), most-utilised one (18 per cent) and most-desired card to apply for and own (11 per cent) in the next 12 months for respondents who did not own any credit cards.
The poll showed consumers want to see immediate remuneration without the hassle and complication of redeeming bricks-and-mortar gifts and vouchers, Mr Murthy said.
Older credit card users value the cashback benefit far more than younger Singaporeans. This can be attributed to buying decisions, household expenses and the cost of raising a family holding more weight among middle-aged people.
On the other hand, younger credit card holders belonging to the aspirational consumer cluster adopt a much more relaxed attitude to money and purchasing decisions. These customers appear to value air miles more, signalling that they have a greater focus on travel and luxury.
Premium credit card holders also highly value air miles. These card holders are likely to travel often so air miles are a way for them to save money on a high-expense category.
Premium cards refer to those requiring a minimum $100,000 in annual income.
For 2017's most favoured cards, respondents elected American Express for the best customer experience; CIMB Visa Signature for dining; Citi Prestige for premium; DBS Altitude Visa Signature for air miles; HSBC Visa Platinum for petrol; Standard Chartered Spree for shopping; Standard Chartered Unlimited for popular choice; and UOB One for cashback and groceries.
The average number of cards an individual owns is close to four, while respondents who do not own any plastic intend to apply for about two cards in the coming 12 months, according to the survey.

How they compare:
http://www.straitstimes.com//sites/...8/01/21/st_20180121_bizltsurvey21_3703385.pdf
 

pcmdan

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I do agree..having cash is much more tangible than miles.

Though miles is way better (in earn rates) if u take biz or first class.

However many of my friends say is an opportunity cost. To them cash back is better and they totally have no qualms taking econ class
 

TabascoSauce

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i prefer cashback too.

the % i get back is more transparent. For example, i got no idea wat 1 miles is expressed as the % of value i get back.

another thing i dislike about miles is bcos it benefit u more if u take first class or biz. which in a way is incentivizing u to spend more than u otherwise would.

a hypothetical example, lets say if u book a biz tic, the miles translate to 8% per dollar spent, but u have to use $1500 worth of miles. Compared this to cashback with 5% interest which u can spend on a $500 economy ticket. which one is more worth it?
 

OngHuatHuat

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Business is much more comfortable than economy. :s22:

i prefer cashback too.

the % i get back is more transparent. For example, i got no idea wat 1 miles is expressed as the % of value i get back.

another thing i dislike about miles is bcos it benefit u more if u take first class or biz. which in a way is incentivizing u to spend more than u otherwise would.

a hypothetical example, lets say if u book a biz tic, the miles translate to 8% per dollar spent, but u have to use $1500 worth of miles. Compared this to cashback with 5% interest which u can spend on a $500 economy ticket. which one is more worth it?
 

tiltonhall

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Miles anytime if you can get above 4 mpd ... the problem is that its so limited

Cashback if you can get 5% ... heck even 3% or more would be incentive for cashback

Can't find any cashback cards that offers better than 2% for high spending consistently with no limits and restrictions
 

streams

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I don’t know but I had the good opportunity to travel at least once on first class and business class for spouse and me.. so that was the good time when times were good for miles accumulation .

now is cash back for me for a while.
 

compro_1975

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so which is the cashback card now? which can alow cashback on transitlink / ezlink and e-wallet payment since i use that the most...
 

fr33d0m

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Unless one doesnt travel much then it would really be no brains to opt for miles.

for economy class redemption, a mile is only worth slightly higher than 1 cent. And if you buy economy class tickets, there are many cheaper options. A mile is worth less than 1 cent.
 

invisible999

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Holy war, iteration 27.

OK, everybody, no need for arguing - everyone picks up the method working for him/her. Cashback works for you and you are happy - good. Miles work for other guy and he is happy too - even better.

There are both options on market and this is great.
 

badsector

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i prefer cashback too.

1. accumulate miles takes too long especially for a family of 3
2. heard redeem tix not always as flexible to ur schedules due to limited seats
3. prefer to wait for various promotion tix
4. if per mile = 2 cents for biz tix. while accumulating, ur idling $$$ seating with the bank/airlines. opportunity cost?
5. takes too much work. recording/comparing promo from banks. up to each individual cards promo for each transactions. calling up banks(why this MCC no point? haha)

peace. not arguing or trying to influence miles camp.

just for good read. it's really more lucrative than selling tix
https://www.bloomberg.com/news/arti...r-in-asia-will-forecast-your-financial-future
http://www.latimes.com/business/la-fi-frequent-flier-programs-20170914-story.html
 
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arctician

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depends on merchants, but cashback works better for me in general

imagine if you spend $500 per month on fnb, by year end you can get $600 based on 10% cashback from cimb visa signature, which can buy you a economy flight tic to taiwan/japan

the same spending only entitle you to 12000 miles based on optimistic estimate 2mpd, which can only buy you half a economy ticket to same place, excluding surcharges and taxes

miles only work if you fly first class or biz to long haul destinations like UK or US, the $25 conversion fee and need to monitor expiry is too troublesome for me.
 

01asdf

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Business is much more comfortable than economy. :s22:


Is it 300% more comfortable? Coz that's the difference in price in his example.

No right or wrong really, but if I'm not prepared to plunk down actual cash for a business or first class ticket, it makes no sense for me to plunk down CC incentives either.

It's like buying designer items "on sale". It's not the $1000 you "saved" but the $9000 you spent that should be considered in the utility calculation.
 

Trazora

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I value miles at 1 cent based on utility rather than the actual price of biz/first class tickets. And use the "best" rebate/miles card depending on the situation.
 

ORELLE

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Is it 300% more comfortable? Coz that's the difference in price in his example.

No right or wrong really, but if I'm not prepared to plunk down actual cash for a business or first class ticket, it makes no sense for me to plunk down CC incentives either.

It's like buying designer items "on sale". It's not the $1000 you "saved" but the $9000 you spent that should be considered in the utility calculation.


maybe if your flight is long, u can consider biz or 1st class, else eco is ok.
 

pinpinpin

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I value miles at 1 cent based on utility rather than the actual price of biz/first class tickets. And use the "best" rebate/miles card depending on the situation.

I know you are the guru in this!!!!

Now I have a spending of $800 plus on starhub. Because they deliver the phone then i pay using the CC.

Which CC would you recommend?
 

Trazora

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I know you are the guru in this!!!!

Now I have a spending of $800 plus on starhub. Because they deliver the phone then i pay using the CC.

Which CC would you recommend?

They using mobile credit card terminal? If can paywave on the terminal use uob ppv or ocbc titanium rewards mobile payment for 4mpd or DBS livefresh for 5% rebate. If cannot paywave, then using ocbc titanium rewards via samsung pay MST for 4mpd.
 
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