Lots of my friends have recently been to Japan to see the sakura bloom. They’re also the ones who always seem to be posting on social media from various cities in the region. It’s enough to make you wonder – do these jetsetters earn so much money that they can afford multiple overseas holidays a year? Or is there something more to it?
My guess is, they’re racking up air miles. Air miles are essentially loyalty points earned on an airline’s frequent flyer programme which means that the more you travel with them or their partner airlines, the more you earn. Air miles can then be used to redeem entire trips or subsidise your travel costs. Sounds fun, right? That’s because it is.
How do you earn air miles?
Spend, spend, spend. The most obvious way is what I described above – you sign up for a frequent flyer programme and travel with a particular airline. Say the flight distance between Singapore and Tokyo is about 3,000 miles. That means, most of the time, you will earn 3,000 air miles.
I say most of the time because depending on the “booking class” of your ticket, you may not earn exactly the miles you travelled. If you flew first class, for example, you could earn 1.5 or even 3 times the miles travelled. If you flew economy class, on the other hand, you’ll earn 50% or even only 10% of the miles travelled.
But unless we travel often for work, it probably isn’t practical to rack up air miles just by flying overseas. That’s why most people earn air miles from credit cards. They do this by earning rewards points when they spend on the card, and then redeeming these rewards points for air miles.
Sounds good! So how many air miles can I earn from using a credit card?
Let’s look at the Citi PremierMiles Visa Card as an illustration. It earns 1.2 miles for each $1 spent locally. This is the minimum rate you earn air miles on this card. Using it overseas earns you 2 miles per $1 spent, while using your card on online booking sites like Agoda and Kaligo can earn you up to 10 miles per $1 spent.
Say you want to redeem a trip to Hong Kong on SQ. A one-way economy ticket is 15,000 miles. This means that if you spend $2,000 on the card each month, you can earn 2,400 miles a month. At least. In 7 months, you’d have earned enough for your trip there. That’s pretty decent.
Actually, who am I kidding. That’s pretty pathetic.
Think about it – you must spend $2,000 consistently on your credit card each month, for 7 months before you can redeem a one-way economy class trip to Hong Kong. And then, you need to spend the same amount for another 7 months before you earn enough to fly back.
Unless you’re secretly the lovechild of Hollywood royalty and REAL royalty, you probably can’t afford that kind of lifestyle – just for an economy class ticket.
But it’s not that hard to spend $2,000 a month?
You’re right, it’s not! But charging them all to a single credit card? That’s tough. Most of your monthly bill payments, for example, are to institutions that traditionally don’t accept credit card payments. Which is a waste. Paying your rent, for example? You can’t use a credit card. That’s likely to be a transaction of $2,000 to $4,000 a month that you can’t earn air miles on.
Fortunately, there’s now a way to start earning air miles for transactions like these.
CardUp is a service that allows you to make payments for your condo maintenance fees, rent and rental deposits, insurance premiums as well as school fees to schools such as NIE, NUSS, and other private educational institutions that currently do not accept credit cards.
However, there is a fee involved, but we’ve found that the rewards earned on your card could well outweigh the fee. CardUp’s currently charging 2.6% of your transaction amount as a fee. Say you use your Citibank PremierMiles Visa Card to pay your monthly rent of $3,500. You’ll only be paying $91 more to CardUp for that $3,500 transaction.
At a rate of 1.2 miles per $1 spent, your rent (and CardUp fee) will earn you 4,309 more air miles each month!
Let’s put this in perspective – flying to Hong Kong on business class? It costs 55,000 miles for a round-trip. Using CardUp to pay your rent, you can earn enough miles for a Singapore Airlines return business class trip to Hong Kong (worth over $2,000) in about a year.
But that’s not all. If it’s a new Citibank PremierMiles Visa Card, for example, you could earn an additional 15,000 miles if you spent $10,000 or more with the card in the first three months. And since your rent alone is enough to meet that requirement, you’re on the way to getting that Hong Kong round-trip business class ticket within 10 months. And all it cost you was CardUp’s 2.6% fee of $91 a month or $910 in total to redeem a flight valued at over $2,000.
So when you think of how many air miles you could earn, it really makes up for that fee.
Is CardUp legal? Why should I use a service like CardUp?
Don’t worry, CardUp is not only legal, but it is perfectly safe. CardUp does not store your card details and your date. Their encryption is bank industry standard to ensure your information security.
What’s more, CardUp allows you to split payment over multiple cards to maximize your benefits. If you use a rewards credit card, for example, you may maximise the number of rewards points you can earn in a month. With CardUp, you can make sure all your cards are used to their fullest.
And with the ability to schedule recurring payments, you never have to worry about missing a deadline again. CardUp users can also schedule payments in advance, which is especially useful if a payment is due while they are overseas.
Interested in a service like CardUp? Find out more here.