My credit card strategy after UOB One card changes

As an avid user of the UOB One card for more than one-and-a-half years now, I have always recommended UOB One as the best cashback card for most people, especially if you’re a GrabPay/FavePay user or if you are looking for a decent all-in-one cashback card with a not-so-high monthly spend requirement.

In fact, it takes top place in my evaluation as the best cashback credit card under my recommendations page for working adults (if you haven’t checked it out).

Unfortunately, with the recent and upcoming changes to the UOB One card terms and conditions, I thought it’s perhaps a good time to re-evaluate and also share my credit card strategy going forward.

A bit of my UOB One card history

I always preferred using UOB One card over the rest of my cashback and miles cards because I could charge a lot of my monthly spending to Grab’s ewallet for GrabPay, which could also be used for merchants that accept FavePay (and for a short time, AXS payments as well).

With this simple strategy, it was very easy to rake up cashback (8.33%-10% depending on spending) and Grab reward points by just shopping at participating merchants.

Of course, all along, this was never a winning proposition for UOB – they had offered cashback rates way above the competition for generic spend, and it was actually rather surprising they had it for quite a while. For example, most unlimited cashback cards such as AMEX True Cashback and Stanchart’s Unlimited Cashback rebate 1.5% for generic card spend, while some cards offer a slightly more generous 6%-10% on targeted spending with higher monthly requirements.

The reason I don’t use these specialised cards is because of their high monthly minimum spend (e.g. $888 for Citi cashback card), monthly cashback caps (e.g. $80 for OCBC 365) or they only rebate for specific categories (e.g. dining, transport and petrol for CIMB Platinum Mastercard).

If your spending don’t fall into those categories, or if you don’t chalk up the monthly minimum spend, then it’s actually pretty difficult to get good cashback rates on your credit card spend. You also don’t want to spend unnecessarily just to hit your monthly cashback tiers to qualify for cash back.

So if you think about it, the UOB One card was very as useful as an entry level cashback card for most young adults like me that didn’t have absurd requirements.

The UOB one nerf

In my previous post, I talked about UOB updating their terms & conditions to exclude Grab ewallet topups from additional rebates. Top ups to ewallet services or other quasi cash merchants also don’t qualify for base cashback from mid March 2020 under their excluded MCC section.

I won’t go into details about the nerf here, so you should read that post first to understand the changes before reading on.

Weighing UOB One vs alternatives after the nerf

With the nerf, I started to weigh the benefits of the UOB One card again to see if it still has a place in my wallet.

If you can achieve $500, $1000 or $2000 in monthly credit card spend without using the card for topups or insurance payments, then you have to ask yourself if the cashback you receive – 3.33%, 5% capped at $100 per quarter, and 5% capped at $200 per quarter respectively – is worth it.

I break the analysis down for different groups of people.

If you spend way less than $500:

If your monthly spend is way below the $500 minimum to even qualify for 3.33% base cashback, then the UOB One card is not the card for you.

Note that the $500 considers your total spend charged to credit card, and excludes cash payments or excluded payments (e.g. quasi-cash, top ups etc, insurance etc).

The best card for you is one with no minimums.

If you spend exactly $500 (or close to $500):

3.33% cashback across all your spend (capped at $50 per quarter) is not a bad rebate. It does better than most unlimited cashback cards, but if you have a sudden expenditure that brings your monthly spend above $500 but below $1000 – the next tier – then you’re forgoing the additional cashback you could have earned with another card.

If you belong to this category of spenders, then you should also consider adding an alternative card like an unlimited cashback card to earn cashback on the additional spend beyond $500.

Additionally, if you’re in this tier, then a lot of the other cashback cards don’t really appeal because they tend to require monthly minimum spends of $600 to $888 in the required categories.

TLDR; if you’re in this category, keep the UOB One and have another credit card that doesn’t have a minimum spend requirement.

If you spend between $500 to $1000:

You have two alternatives, one is illustrated above, basically you keep your UOB One card for spends up to $500, and use another card on the additional spend.

The second option is for you to consider one of those specialised cards depending on where you spend most of your money on – because it is likely that you qualify for one of them.

If you’re in this category, like me, then you have more choices in terms of credit cards and you don’t really have to restrict your spending on one card. For example, you could have a mix of miles and cashback cards with no monthly minimums. One example would be mixing UOB One ($500) with UOB PPV (4 MPD) or DBS WWMC (4 MPD). You could also mix it with a 1.5%/1.6% unlimited cashback card if you’d prefer the cashback route.

Or if you are someone that spends a lot in a particular category, say dining, then do consider cards that give you more rewards than the generic spend cards.

For instance, those who spend $800 a month on dining, petrol, transport and travel categories can get 10% cashback with the CIMB Platinum MasterCard. Those who spend $300 a month in off-line spend can get 6% cashback on online spend with the OCBC Frank Card. There are a lot of specialised cards each with their own nuances, terms and exclusions – including ‘up to’ clauses or rewards that are paid quarterly so it is best to do your own research before applying.

TLDR; you have options, but requirements for specialised cards may be difficult to reach. Consider no minimum cards.

If you spend above $1000:

The story is a little different if your spending is above $1000 a month, because now specialised cards become more attractive as their requirements are easier to attain.

The comparison between the UOB One (5%) versus specialised cards potentially higher reward tiers (6%-10%) might put the UOB One to shame here. Once again, it depends if your spending is considered specialised or generalised because UOB One’s cashback rewards you for general spending, but it is best applied if your monthly spend is exactly or close to $1000/$2000.

TLDR; UOB One’s general cashback inclusions are attractive, but meeting the $1k mark consistently to maximise cashback may need some discipline in tracking.

If you spend above $2000:

Because UOB One card cashback tier stops at $2000, spending above this limit don’t qualify for additional cashback.

So if you’re going to pay for an expensive purchase like a 4K QLED television or home renovation, it doesn’t really make sense to forgo the additional rewards above the $2K spending.

This is where you can stack miles cards that offer sign-up bonuses if you spend X amount of dollars within the first X months – potentially giving you a free trip to your dream destination.

If your monthly spend is above $2000 consistently, then it’s good to consider multiple credit cards in your arsenal. The UOB One card 5% cashback ($200 a quarter) is still attractive, but often, miles cards can be even more rewarding with this level of spend – imagine getting 8000 miles a month on a 4mpd card!

TLDR; Stop at $2000, consider miles cards for the luxury business class ticket you’ve always dreamt of

Does the UOB One card still have a place in my wallet?

Well…. to be honest, not really.

My credit card spend hardly hits exactly $500 or $1000, and it’s mostly somewhere in the middle of that range. That’s because many coffee shops (where I dine) still accept only cash. In some cases, I have to PayLah/PayNow my friends when they pay for the meals.

Based on my spending habits, I pay a lot with contactless payments and QR payments (especially at F&B outlets), or online spend on e-commerce sites, food delivery etc. As far as possible, I’d use my UOB PPV card (4 mpd) for these transactions as long as the transactions are in blocks of $5.

For other types of spend where I don’t qualify for 4 mpd, e.g. top ups like GrabPay, flight tickets or items below $5, I am getting the new Citi Cashback+ card (1.6% unlimited cashback, no monthly minimum spend + additional 2.9% bonus cashback on the first $5000 eligible spend made during the first 3 months capped at $145).

The new Citi Cash Back+ card with 1.6% cashback with no minimum spend or cap. Not the highest % cashback card, but worthy to keep it in pocket.

Unlike the previous Citi Cashback card without the ‘+’, this one doesn’t require a minimum $888 monthly spend, is eligible across all spending categories and the sky is the limit because there’s no cap!

These cards should cover the majority of my use cases and I don’t have to worry about hitting monthly minimums… until the next good card comes along. If you guys have any recommendations for cards, do feel free to let us know in the comments below.

Till then, if you want to follow my latest posts, consider liking Betterspider on Facebook so you don’t miss out.

Derrick is a digital native, finance geek and avid photographer. He loves spontaneity but is a control freak at the same time.

Leave a Reply

Site Footer