Written by @Lan and @Joehairie
We both travel a lot and our credit cards are indeed useful; not only it helps us to spread the upfront cost of goods and services to reducing the cost of expensive debt but at the same time it gives us those precious air miles. All frequent and avid travellers are into air miles; constantly looking at every single opportunity to save air miles for future use. While being a member of an airline loyalty program is one important way to collect miles, having credit card(s) will surely help to expedite the process. But then again, it depends on the type of credit card that you have. There are several important things you need to look into before signing up for an air miles credit card.
Understanding air miles
Get free flights using air miles!
First, let’s talk about air miles. Air miles or frequent flyer mile, is part of a loyalty program offered by airlines and/or credit cards. You accumulate a set amount of miles based on how far you fly or how much you spend on your credit card. After accumulating enough points, you may then use these miles to buy tickets.
In today’s aviation world, the sky is the limit when it comes to accumulating miles. There are many ways to do it and airlines/credit card companies are creative in offering awards for their customers. As for Malaysians, all that you need to do are two things; enroll in the best Airline Loyalty Program and find the best credit card in Malaysia that rewards you with the most air miles.
Enrolling in airline’s loyalty program of your choice is a straight forward process. It’s easy and it is free. Malaysia Airlines for example runs Enrich program where one can easily register in the airline’s official website. AirAsia have its own program named as BIG and so does Singapore Airlines with their KrisFlyer. Fly on valid sectors and you will receive air miles.
As for the credit cards usage, if you purchase a product or service, you receive points. For example, paying your hotel rooms with credit card entitles you to accumulate credit card points. These accumulated points can be used at a later stage to convert to air miles. Different credit card has different sets of rules when it comes to awarding points.
Are you ready to have your first credit card?
For newbies, pay attention to two important factors before signing up for a credit card. First is the minimum income requirement. Maybank 2 Platinum Card for example needs you to have a minimum income of RM60, 000 per annum /RM5, 000 per month. The HSBC Visa Signature has set the minimum income at RM72, 000 per annum /RM6, 000 per month. For someone who is planning to have his or her first credit card, your minimum income per annum or per month will determine your eligibility.
The second thing you need to look at is the Annual Fee. Most hates that annual fee. Most banks are now ‘absorbing’ that annual fee, hoping that customers will stick to their credit cards. Unfortunately, some do impose annual fees though the benefits being offered are amazingly lucrative. The annual fee for Standard Chartered Worldmiles World Mastercard is RM636 but you get UNLIMITED access to Plaza Premium Lounge in KLIA and KLIA2.
It is easy collect 1 WorldMiles point by spending RM2 overseas or RM3 locally which you may choose to convert 2 WorldMiles points collected to one air mile of your preferred airline frequent flyer program such as Enrich Miles, and AirAsia BIG Points. High annual fees come with greater benefits but one need to decide if such annual fees are within the budget.
If you have no problem in these two important things; minimum income and annual fees, then the next thing you do is to look at all other features offered by each credit card and this brings us to your loyalty towards your preferred airline.
Loyalty towards Frequent Flyer Program
Loyalty pays off..
So, you are the one who keeps flying on a single airline, avoiding all other carriers? Color us impressed as we both find it quite difficult to stay loyal to one airline since the fare fluctuates on daily basis. But yes, we do try our best to be loyal. If you are an Enrich (Malaysia Airlines) member for example, you might want to opt for the credit card(s) that offers you ‘easily to convert’ air miles.
There are some credit cards best for Malaysians when it comes to Enrich Program such as CIMB Enrich Platinum MasterCard Credit Card. A cardholder can earn 1 Bonus Mile on every RM4 he spends locally or globally and that 1 Bonus Mile adds up to 1 Enrich Mile.
Of course there are other credit cards that might suit your preferences. All you need to do is to go through one by one and choose the best (or 2 or more credit cards if you can afford!). Converting air miles accumulated through credit card spending to get free flights is now made easy if that credit card is link to an airline frequent flyer program.
A card that is perfect for your budget
Your budget is important!
While paying attention to the annual fees of credit cards (if any), one needs to be extra careful before signing up as you don’t want to end up in ‘high debt’. You definitely want a credit card that gives you the ability to ‘control your spending habits’. Getting a credit card with unlimited spending amount is not wise for some people though your annual income might be sufficient for that. While you need to have the ability to spend more and pay the banks in stages, you must be able to project your future income so your debt will not burden you in the long run.
Use your credit card wisely and accordingly and you will be perfectly alright. Avoid accumulating debt by paying religiously, on time. As credit card users, we both do stick to those golden rules. Long before we signed up for credit cards, we make it a point to have maximum amount that we are able to spend. When a bank told us that Y credit card is set to RM5, 000 spending limit, we’re happy to oblige. Once we were offered a card that has a whopping RM25, 000 spending limit and we rejected the offer.
Conversion ratio of points
Take time to master the art of converting points to air miles
Since this article is about air miles and credit card, it is important to mention that one need to look deeply into the conversion ratio of points that you will be earning after spending with the credit card. What if there is a credit card that gives you more air miles though you spend not that much as some avid travellers do? Of course spending more gives you more air miles but in the end, the conversion ratio is crucial to be weighed in.
For example, Credit Card A. This credit card allows you to convert every RM1 spent locally or abroad to 1 air miles of a carrier. So, let’s say in a period of time you spent RM9, 800 using your credit card. When the time comes for you to ask the bank to convert it to air miles, you will get 9, 800 miles. At certain times, carriers throw in unbeatable offer such as getting 50% more from the actual converted air miles, which means you will be getting 14, 700 air miles!
Credit Card B on the other hand allows you to convert every RM3 spent locally or abroad to 1 air miles of a carrier. Using the same example above, your RM9, 800 spending translates into about 3, 226 air miles. Even if there is 50% offer more for your conversion, it gives you 4, 839 air miles. That figure is insanely far from the 14,700 air miles that you are to receive from Credit Card A.
You need a list of all related credit cards and start looking into the conversion ratio, well, that is if air miles are important to you. You need a credit card that allows you spend within your budget but at the same time offers attractive conversion ratio of points. It will be an unwise thing to do if you only compare conversion ratio of 2 or 3 credit cards. You need to study all, if possible in order to be able to get your preferred credit card.
Be aware of your credit card’s points expiry date!
You will certainly be happy to have credit card(s) with longer period of time for the points to expire. Best if there is no expiry date, though that is not always the case, unfortunately. You might be planning to have like 30, 000 points before converting it to air miles but then 3 years later you only have 25, 000 miles and then the worst thing is you simply forget about that. Before enrolling, check the details, the terms and ask verbally.
If 3 years is alright for you then opt for it. If you spend a lot in short period of time and the expiry date is set to 1 year then you are good to go for such credit card. If you don’t spend a lot using your credit card, perhaps 3 years will be ideal. Again, best if there is no expiry date. It is about your ability to accumulate points within a period of time and be able to remember it (some people do forget, surprisingly!) by constantly checking your online statements.
Extra Useful Benefits
Our Platinum Credit Card gives us access to most Airport Lounges worldwide
Certain credit cards not only give you the best conversion ratio of points but throw in benefits such as access to airport lounges, travel insurance coverage, 24 hours protection or assistance wherever your location is, access to recreational clubs; worldwide, priority banking service, priority wait-list during check-in at airports and many more. There are even some tiny little details of benefits that customers are not aware of. You may also need a credit card that allows you to change to higher tiers/status without compromising your earlier benefits or having to pay more.
While our concentration is on air miles, it will be you who are benefiting from all the privileges given by certain credit cards, if you choose wisely. Not all credit cards are the same, in terms of, well, everything. Each type of credit card is specifically designed for a group of people and do bear in mind that the more benefits being given to you, the higher the annual fee or annual income are. It is about choices, the credit card that gives you the utmost benefits.
Travel made easy with the right credit card!
You just need to know the best way to find the best credit card to fulfill all your needs, financially and ‘recreationally’ (the extra benefits). While more people are eligible to apply for 1 or more credit cards nowadays, pushing away the minimum income and annual fees obligations; we all just need to be vigilant for uncertainties. We want to sign up for a credit card that will benefit us in the long run. While financial institutions are out there to make money, customers at the same time must be able to differentiate the characteristics of each credit card available to them.
For avid travellers, having credit card(s) is one important method to accumulate air miles. Those precious air miles will gives value in terms of free flights, free upgrades to premium cabin, free access to lounges and even free things while aboard budget carriers, if you know what we mean. That said, there are insanely too many credit cards out there, available for each eligible Malaysians. Understanding the best credit card for air miles in Malaysia is now made easier by us, especially for those who constantly travel and intends to secure free flights.