By MoneyBees
Work out the cents per mile a redemption gets you, the miles your card earns on your spend, and the break-even against a cashback card.
Take the cash price of the same ticket, subtract the taxes and surcharges you still pay on the award booking, and divide by the miles. A S$1,200 ticket that costs 50,000 miles plus S$150 gives S$1,050 / 50,000, which is 2.1 cents a mile.
Multiply your spend by the card's miles per dollar. S$2,000 a month at 1.2 mpd is 2,400 miles a month, or 28,800 a year. Check your card's terms for caps, excluded spend and different rates for local, overseas and online spend.
Only if you redeem above the break-even. Divide the cashback rate by the miles per dollar: 1.5% cashback against 1.2 mpd breaks even at 1.25 cents a mile. Redeem above that and miles pay more; below it, or not at all, and cashback wins.
Yes. Banks often charge a fee to move points to an airline programme, and it comes out of what the miles are worth. Enter your yearly fees and the calculator raises the break-even to cover them.
Cents per mile depends on the fare you avoid paying. Compare against the price you would really pay for that seat. A premium cabin fare you would never buy in cash makes the miles look worth more than they are to you.
Divide the miles you need by the miles you earn a month. At 2,400 miles a month, a 50,000-mile redemption takes 21 months. Bonus categories and sign-up offers can shorten it.
Check before you save towards a redemption. Airline programmes and bank rewards programmes each set their own expiry rules, and they are not the same.
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