Cash back, cash rebate, and air miles are standard perks for getting a credit card. This guide will help you understand the difference between the three credit card reward systems and help you choose one that fits your spending habits and lifestyle.
What is the Difference Between Cash Back, Rebate and Air Miles?
With cash back credit cards, you get the rewards in cash, while cash rebates are essentially discounts. Air miles’ rewards, on the other hand, let you accumulate sufficient miles for every dollar spent.
|Rewards Credit card||Pros||Cons|
|Cash back cards||Get the rewards in cash (not vouchers). Good for predictable expenses.||Be careful with the minimum spend & cash back cap|
|Air miles card||No minimum spend, minimal T&Cs.||Earning miles can be pretty slow if you don’t spend a lot. It costs money & time to convert points to miles, and the miles can expire.|
|Rebate card||Generous refund on massive purchases.||It only works for big purchases such as automobiles|
Cash Backs Credit Card
Cash back credit cards have the most straightforward reward system. With cash back, a percentage of some eligible purchases made on the credit card is paid back.
- If you want your rewards in cash
You can use the cash on your credit card immediately and on whatever purchase that you might want
- If you are not a spender
You still get cash back regardless of the size of spending. Since you do not spend much, you do not need to worry about the cash back cap.
- If you are the type of person who prefers immediate gratification, cash backs are for you
Unlike air miles that might take months or years to accumulate, cash backs are credited to your credit card each month.
Some of the reasons you should opt for cash back credit cards include:
- Save money on preferred stores
- Save money on everyday spending
- Get savings every month
- No Annual Fee
Most popular rewards cards do have an annual fee. This means you do not need to sacrifice part of your rewards for the fee. You can also decide to keep the open card free of fees if you use another card. Longer credit history can help you strengthen your credit score.
- The Cash Rewards
Cash back credit card rewards cards have unique reward systems, but they all offer a straightforward cash back on your spending.
- Shopping Perks
Most of these credit cards offer the benefit of safeguarding your online purchases and, in some cases, help you save money. Some of these perks include return guarantees or a refund if the store does not accept your return, extended warranties, and cell phone protection, among others. Please remember that not all cards offer these perks, so read through the card’s benefits guide for a detailed breakdown of what to expect.
- Sign-Up Bonuses
Some credit card rewards will offer sign-up bonuses if you meet the minimum spending requirements in the first few months. In some cases, the bonuses can be worth hundreds of dollars.
- Some Cash Back Cards Have 0% APR Offers
This will allow you to pay for your existing debts and make big purchases without paying any interest.
- High Foreign Transaction Fees
These credit cards often have a 3% fee on abroad spending
- High On-Going APR
Choosing a cash back credit card with a 0% APR might not always be like that. The average APR is over 20%, and the cash back cards keep changing. Your ongoing APR is based on creditworthiness. Therefore, you will likely receive a high APR rate if you do not have an impressive credit score.
- Most Cash back Credit Rewards Cards Have Earning Caps
Some cash back cards let you amass unlimited rewards, while others limit the amount you can receive back.
- No Travel Rewards
If you want travel rewards, only a few cash back cards will let you earn free travel. If you are looking for free travel, a travel reward card is best suited.
Top 5 Cash Back/Rebate Back Credit Cards in Singapore
Since banks use Cash backs and rebates interchangeably. Here is a look at the best cash back/ rebate rewards cards in Singapore:
1. UOB Absolute Cash Back
Cash back rate: 1.7%
Minimum monthly spend: S$0
Annual fees: S$192.60
Cash back cap: Unlimited
The UOB Absolute Cash back card offers its rebates at 1.7%. The card is an Amex card, meaning it can be hard to find small merchants who accept it. However, if you stick to large merchants, you can put your big spending there, including school tuition and insurance fees.
2. Citi Cash Back+ Card
Cash back rate: 1.6%
Minimum monthly spend: S$0
Annual fees: S$192.60
Cash back cap: Unlimited
Citi Cash Back+ is an unlimited cash back card that lets you earn a flat cash back rate on everything. It is ideal for big spends such as home renovations and wedding dinners. Most of these big spendings could have a cash back limit on most rewards cards. Citi Rewards card is also great for your regular shopping in grocery stores.
3. Standard Chartered Unlimited Cash Back Card
Cash back rate: 1.5%
Minimum Monthl spend: S$0
Annual fees: S$192.60
Cash back Cap: Unlimited
Standard Chartered Unlimited comes in third on the list with 1.5% cash back on all spending with no minimum spending and no cash back cap. The rewards card also waives its annual fees for the first two years from account opening, and you can also get a maximum of 5 free supplementary cards.
4. American Express True Cash Back
Cash back rate: 1.5%
Minimum spending: S$0
Annual fees: S$171.20
Cash back Cap: Unlimited
The American Express, True Cash back card is Singapore’s longest-standing cash back cards. With 1.5% on all its spending, the card does not have a cash back cap and no minimum spending as well.
The card also offers $160 CapitaVouchers when you spend at least S$500 in the first month after card approval. It also offers 3% cash back on up to $5,000 of spending in the first six months after card approval.
5. UOB One Card
Cash back rate: Up to 10%
Minimum spending: S$2,000
Annual fees: S$192.60
Cash back cap: S$300
UOB One Card air miles card offers one of the most generous cash back but has the most complex reward system. The card offers up to 5% on all retail spending, but you must spend at least S$2000 each month consecutively in at least five transactions for the first three months. The cash back is paid in a lump sum of S$300 at the end of the quarter. If you spend less than S$2,000 monthly, you will lower your cash back percentage.
The card has other instructions on how to use it, and you must look keenly through the fine print to understand how to get the most out of the card.
Cash rebates are when a promotion offers a percentage refund of the selling price. Cash rebates are essentially discounts and are more familiar with automobile purchases when car manufacturers offer a discount on the price of the car.
Some banks use cash rebates and cash backs interchangeably; in essence, they both provide a refund.
The difference between cash rebates and cash backs solely depends on the provider. A cash back or cash rebate offered by a bank means the same thing, but when it comes from other providers like a car dealer, it will have a different meaning.
Be sure to read through the fine print with up to date information on the cash back or cash rebate promotion before buying to be sure of what to expect.
What Are the Pros and Cons of Cash Rebates?
Since Credit card rebates and credit card cash backs work interchangeably by banks, the advantages and disadvantages are similar, as we have stated above.
Air miles’ rewards cards get you air miles for every dollar spent. Your credit card provider and the airline partner determine the value for each credit card mile. The miles you accumulated while spending can be used to redeem flights in economy, business class, or first class.
It is also important to note that the airline, not the credit card issuer, sets the number of miles required for a specific distance. The miles you have accumulated, and the value for each mile will determine the value for each mile. You can therefore use your miles credit card to get free flights. You can easily top up the difference if you do not have enough miles for a free flight.
- Great for frequent travellers
- Great for people who love staying in specific hotels
- You can redeem the air miles for a friend or family.
- Both Overseas and Local Spending Earns You Miles
You will earn air miles from all purchases made with the credit card, both local and overseas, and you can redeem their miles on a flight in the future.
- No Minimum Spend Required
Rewards credit card issuers do not need you to spend a specific amount of money on starting accumulating miles. You can therefore earn rewards points without worrying about the minimum spend.
- No Cap on the Miles Card
Unlike cash back cards, you can earn as many air miles as you want
- Offer Additional Benefits
The credit card offers additional benefits, including travel insurance, airport transfer, and lounge access.
- It Takes a Long Time to Accumulate Points
Accumulating points for a flight can take a long time for some people.
- Most Banks Don’t Have a Frequent Flyer Program
It can be hard to get a frequent flyer program from most banks
- The Accumulated Miles Expire
There is an expiry date for the miles earned.
Top 5 Air Miles Credit Cards
If you are planning for big-ticket purchases. Mile cards require you to spend so that you can accumulate sufficient miles. So if you plan a big-ticket purchase, you can quickly supercharge your mile’s journey with the bonus miles promotions that some rewards credit cards offer.
1. Citi PremierMiles Card
Spend-to-miles rate: Local
Spend: S$1-1.2 miles, Foreign currency spending S$1=2 miles
Minimum spend: $800 within two months
Annual fees: $192.60
The Citi PremierMiles Card air miles do not expire, so you do not have to worry about the time it will take you to earn miles. You can accumulate them at your pace and use them when ready. It is an excellent card for fresh graduates or not-so-big spenders. Citi PremierMiles Card offers a reasonably attractive rate compared to other cards.
2. DBS Altitude Card
Spend-to-miles rate: Local Spend – S$1-1.2 miles; Foreign currency – S$1=2 miles
Minimum spend requirements: S$4,000 within the first 60 days of approval
Annual fees: S$192.60^ (Principal card); S$96.30 (each Supplementary card)
The DBS Altitude card also lets you accumulate miles that never expire. The card offers 3 miles for every dollar spent on hotel transactions and online flights, 2 miles for every $1 spent overseas, and 1.2 miles for every dollar spent locally.
DBS Altitude also offers additional card privileges to earn you more miles on your expenses. You will be charged a 2% admin fee for your expenses.
3. OCBC 90°N Card
Spend-to-miles rate: Local Spend – S$1-1.2 miles; Foreign currency spending – $1=2 miles
Minimum spend requirements: S$5,000
Annual fees: S$53.50 a year (waived for the first year). Receive an extra 10,000 Travel$ when you top up S$192.50. S$53.50 a year per card for the supplementary card.
OCBC 90°N Card is also a non-expiring air miles credit card that you can use on overseas online shopping sites. You earn 2 points for every $1 spent in foreign currency and 1 point for every S$1 spent locally. Remember that the earn points are blocked at S$5, so you will not earn a point if you spend S$4.90 locally.
4. Amex KrisFlyer Card
Spend-to-miles rate: Local Spend – S$1-1.1 miles; Foreign currency spending – $1=2 miles
Minimum spend requirements: $1,000 in the first two months
Annual fees: $176.55
This card is excellent for collecting Singapore Airlines’ KrisFlyer Miles program. With this one, there is no need to redeem your monthly points since they will be automatically credited to your KrisFlyer account. Remember that the miles will expire after three years.
It has a typical earning rate. You get 2 miles for every $1 spent on the eligible purchases in foreign currency from June to December. You also earn 1.1 miles for every $1sept on eligible local purchases. They also reward you with 3.1 miles for every $1 spent on Grab in Singapore, which is valid for $200 worth of monthly spending.
The Amex KrisFlyer Miles Card has an attractive entry bonus. You get 5,000 free miles once you use the card for the first time and 5,000 miles if you spend $1,000 in the first two months.
5. Maybank Horizon Card
Spend-to-mile rate: 3.2 miles when you spend in a restaurant, public transport, and petrol.
Minimum spend requirements: $300 per month
Annual fees: $180
The Maybank Horizon Card offers you 3.2 air miles when you spend on petrol, restaurant dining, and public transport. When you use the card overseas, you will earn 2 miles for every dollar you spend on air tickets, foreign currency transactions, and travel packages. This includes online spending.
The card offers the best rates in local spending, but you will need to spend more than $300 monthly to qualify for the miles. This is disappointing since most air miles cards do not have a minimum spending requirement.
The card charges an annual fee of $180 but is waived for three years instead of the usual one year, as with most air miles credit cards.
1. How Do You Redeem Air Miles Credit Card?
You can access the portal by logging in with your credit card or frequent flyer account based on whether you are earning the air miles on a generic travel credit card or a frequent flyer program.
When you log in, you can find the right redemption option. Some programs will have dates where redemption is unavailable or will cost more than usual. Here are some essential tips for using to get the most out of your air miles credit card:
- Book in Advance
If you plan to travel, you can search for your redemption a few months before the travel dates. This will help you select the dates with a low redemption cost since booking a flight last minute can incur additional fees.
- Fly with Your Travel Partners
Most flying programs have airline partners, which means you can redeem the air miles card from an airline partner. If you cannot find a low-cost flight through the primary airline, you can look for options from their partner airlines and book with them instead.
- Research Transfer Partners
If you can earn transferable rewards points, ensure that you research the flight prices with each partner before booking your flights. This allows you to find the lowest price, and you can transfer your rewards point to the airline of your choice and book.
2. What Are the Factors to Consider When Choosing A Cash Back Card?
- The Cash Back Card Rate: This is the amount of cash back you will earn based on your spending.
- The Specific Categories with High Cash Back Rates: You need to know the category spend that will earn you more cash back.
- The Minimum Spending: This is the minimum amount you will need to spend each month to earn a cash back.
- The Cash Back Card cap: This is the maximum amount you can earn back every month.
3. What Are the Factors to Consider When Choosing Miles Cards?
- Miles Per Dollar or Miles Earn Rate: This is the number of miles you will earn per dollar you spend. The rate largely determines how many miles you will earn.
- Categories with Higher Miles Earn Rate: When choosing miles card, look for the categories that will give you more miles for your spending.
- Airline Partners: These are the flyer programmers that the banks have on board. For example, Krisflyer miles has Singapore Airlines.
- Annual Fees: The amount you need to pay for the annual fee is also essential.
4. What are The Different Types of Cash Back Cards?
Here are the different forms of cash back:
- Tiered Rate Cash Back: The cash back rate here depends on your annual spending. For example, you get a 0.5% cash back if you spend $5,000 and a 1% cash back if your annual spend is above $5,000.
- Flat Rate Cash Back: The cash back rate is flat regardless of your spending.
- Different Rate Cash Back: This form offers a different rate based on where you spend the money. For example, fuel spending may get you a 3% cash back, while supermarket spending may get you 1%.
5. How Do You Redeem Cash Backs?
Cash back cards have a minimum redemption threshold. You must read through the fine print on your credit card to familiarize yourself with the redemption terms. Here are the typical ways you can redeem your cash backs:
- Gift Card: These are cash backs returned as gift cards to use at the specified retailers. You will choose the reward of your choice from the rewards catalog.
- Bank Account Deposit: These cash backs are deposited directly to your savings or checking bank accounts.
- Credit of Statement: These cash-backs are used to offset your next credit card bill on your credit card account or your personal loans
Choosing between cash backs, cash rebates, or Air Miles credit cards depends on your preference. If you believe that cash is king, cash backs and rebates are your choices. If you love traveling, air miles credit cards are your best bet. However, remember that it takes a while to accumulate the air miles, and you need to be a big spender to get the most out of your card.
- Banks use cash backs and cash rebates interchangeably, but you must read through the fine print to know what to expect.
- Air miles credit cards can take a while to accumulate rewards points, and some have an expiry date on the accumulated rewards points.
- Most cash back credit cards credit the rebates on your credit card every month.
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