Miles vs. Cashback: Which Card Suits You?

How Rewards Work In Singapore

In Singapore, most cards sit in two big buckets: miles cards and cashback cards. Both reward you for everyday spending, but they “pay you” in very different ways. With miles, you build up travel currency for flights and upgrades. With cashback, you get money back that reduces your bill or lands in your account.

A key Singapore detail: many rewards are not earned as “miles” immediately. You often earn bank points first, then convert them into frequent flyer miles. That conversion can come with a small administrative fee that includes GST. Knowing this upfront helps you choose a card that fits how often you plan to redeem.

Another local reality: overseas and online cross-border spending can trigger a foreign currency fee (often around 3%–3.25% depending on network and issuer). That fee quietly affects the real value of both miles earning and cashback, especially if you shop frequently on international sites.

Miles Cards Explained

What You Actually Earn

Most miles credit cards express earnings as miles per dollar (often written as mpd). In Singapore, a common pattern is a “base earn” for general spend and higher earn rates for selected categories like online shopping, dining, or travel bookings. Those higher rates usually come with caps and rules.

• Base earn is what you get on most spend. It matters if your spending is broad and not tied to specific categories. Keep an eye on excluded transactions because some bill payments and wallet top-ups may not earn points.
• Bonus earn is where miles cards shine. The trade-off is complexity: you may need to hit minimum monthly spend, stay within a cap, or spend with certain merchant category codes (MCCs) for the bonus mpd.
• Conversion step can matter as much as the earn rate. If each transfer has a small fee, frequent small conversions reduce the value of miles. Bigger, less frequent transfers often feel more efficient.

Where Miles Give Strong Value

Miles can deliver excellent value when you redeem for flights, especially premium cabins, upgrades, or high-demand routes. The exact value depends on the airline programme, route, season, and availability. That’s why miles work best when you enjoy planning even a little and you can be flexible with dates.

Miles also suit people who want travel-related perks bundled into one product. Some miles cards include benefits like travel insurance, airport lounge visits, or accelerated miles on hotel and airline spend. These perks can be valuable, but only if they match how you actually travel.

What Can Reduce Your Miles Value

• Annual fee: Many cards are fee-waivable, but not always. If you pay an annual fee, remember it can include GST. The fee can be worth it if you receive a meaningful miles renewal or travel perks you would otherwise pay for.
• Expiry rules: Some bank points or miles expire after a set time. Others last longer. This matters if you’re a slower accumulator. Expiry rules are usually simple, but they’re easy to forget until it’s too late.
• Transfer fees: A small conversion fee (with GST) is common in Singapore. If you transfer every month, the total cost can add up. If you transfer less often, the fee becomes a smaller slice of your total miles value.

Cashback Cards Explained

What You Actually Earn

A cashback credit card gives you a percentage of your spending back. That sounds simple, and usually it is. The detail is in the structure: a base cashback rate for general spending, plus higher rates for certain categories like groceries, petrol, dining, or online purchases—often with caps and minimum spend.

• Flat cashback cards pay a steady percentage with fewer conditions. They are popular for people who want clarity and minimal tracking. The trade-off is the rate might be more modest than category-heavy cards.
• Category cashback cards can deliver higher rebates, but only when you meet rules such as minimum monthly spend, eligible merchants, and cashback caps. If you miss a rule, you may drop to a much lower base rate.

Where Cashback Feels Best

Cashback is ideal when you want rewards that support everyday life—utilities, groceries, transport, family expenses, and monthly budgeting. The “value” is immediate and predictable. You don’t need to hunt for award seats or learn redemption systems. You spend, you earn cashback, your bill goes down. Simple.

Cashback also suits shorter planning cycles. If you don’t have a clear travel plan in the next 12–24 months, cashback tends to feel more satisfying than collecting miles slowly and hoping they fit a future trip.

What Can Reduce Your Cashback Value

• Caps: Many high-rate cashback cards cap monthly rebates. Once you hit the cap, extra spending earns little. If your monthly spend is high, a cap can quietly limit your real return.
• Minimum spend: Some cards require you to spend a set amount each month to unlock the headline rate. If your spending varies, it can be easy to miss and end up with a lower rebate.
• Merchant rules: Categories can be defined by MCCs. A “grocery” purchase in your mind might code differently at the bank’s side. It’s not dramatic, just a technical detail that matters for cashback.

Miles vs. Cashback Compared

A Simple Way To Judge Real Value

Miles: Turn mpd Into A Percentage

To compare miles and cashback, translate miles into a rough percentage. You only need two inputs: your earn rate (mpd) and your personal mile value in dollars. Many travellers use a conservative working range like S$0.01 to S$0.02 per mile depending on how they redeem.

Now adjust for frictions that matter in Singapore: if you pay a conversion fee each time you transfer, the “percentage return” drops a little, especially on smaller transfers. The same goes for foreign currency fees on overseas spending. This is why the best miles setups often combine a strong earn rate with a practical redemption rhythm.

Cashback: The Percentage Is Usually The Truth

With cashback, the headline rate is close to the real rate—if you meet the rules. The two checks that matter most are monthly caps and minimum spend. If you routinely miss a minimum spend requirement, a “high cashback” card can become a low-return card fast. That’s not a problem, it’s just how many Singapore cashback products are structured.

Singapore-Specific Details That Change The Answer

Eligibility Basics

Most mainstream credit cards in Singapore require you to be at least 21. Minimum annual income requirements commonly start around S$30,000 for Singaporeans/PRs, and are often higher for foreigners (commonly around S$45,000 depending on the bank and card type). Some banks also offer secured card options tied to a fixed deposit for those building credit history.

GST On Fees You Might Forget

Singapore’s GST is currently 9% and it can apply to card charges like annual fees and miles conversion fees. If a fee is waived, there is typically no GST on that waived fee. This matters because two cards with similar rewards can feel different once you account for the “all-in” fee cost.

Foreign Currency Fees And Cross-Border Online Shopping

Many Singapore-issued cards charge a foreign transaction fee for overseas spending and some cross-border online merchants. A common level is around 3.25% on Visa/Mastercard, with some networks and issuers differing slightly. If you frequently spend in foreign currency, choosing a card with stronger FCY miles or meaningful overseas cashback can make a noticeable difference.

Card Networks And Acceptance

In Singapore, Visa and Mastercard acceptance is broad. American Express is strong in many places but can be more selective at smaller merchants. If you want one “do everything” card, network acceptance can influence whether miles or cashback feels easier day to day.

When Miles Usually Fit Better

Miles tend to suit you when travel is a real goal, not a vague idea. If you can accumulate rewards for 12–24 months and you’re happy redeeming for flights, miles can outpace cashback in value. It’s even stronger if your spending naturally falls into categories that earn higher mpd.

• You’re comfortable tracking a few simple rules like caps and MCC categories, and you don’t mind converting points to miles when the time is right.
• You can keep your spending consistent enough to hit the earn structure. Many high-mile strategies work best when your monthly spending is steady and not totally random.
• You value travel extras like lounge visits or travel insurance. Those perks can act like “hidden cashback,” but in travel form.

When Cashback Usually Fit Better

Cashback tends to suit you when you want a clean, reliable reward that supports your budget now. If your spending is broad—groceries, family expenses, transport, subscriptions—cashback can feel more rewarding than building miles slowly, especially if you’re not sure when you’ll travel.

• You prefer “set and forget.” With a good cashback structure, you mostly just spend normally and check that you meet a minimum spend if required.
• You want rewards that reduce your monthly outlay. Cashback is straightforward, and it plays nicely with household budgeting.
• You don’t want to worry about redemption timing, award seat availability, or transfer processing times. Cashback doesn’t care about any of that.

Common Terms That Matter More Than The Headline Rate

Caps, Blocks, And Minimums

Three small mechanics drive real-world results: caps, minimum spend, and redemption blocks. A cashback card with an 8% headline can behave like a low-rate card once you hit the cap. A miles card with great bonus categories can disappoint if you miss the minimum spend that activates those bonus rates.

Excluded Transactions

Many banks exclude certain spending types from earning rewards. The list differs by issuer, but common exclusions can include specific bill payments, some financial transactions, and certain wallet top-ups. This is where a simple habit helps: scan the exclusions once, then choose a card whose earn structure aligns with your normal spend. It keeps your miles or cashback expectations realistic.

Processing Time And Planning

Miles transfers may take a few working days, sometimes longer for a first-time transfer. If you plan travel redemptions close to a booking deadline, build in a buffer. This is not hard—just one of those small Singapore card realities that people forget and then scramble. I’ve seen it happen, it’s pretty anoying.

A Practical Decision Matrix

A Balanced Approach Many Singaporeans Use

If you don’t want to choose just one style, a common setup is to pair: (1) one good general-spend card, and (2) one specialist card. The general card catches everything. The specialist card targets your biggest category. This can work with miles or cashback, as long as you keep it simple enough to maintain.

• For a miles-leaning setup, people often use one steady miles card for broad spending and a second card for high-earn categories (online, dining, or travel bookings). Then they convert in larger batches to reduce conversion fees.
• For a cashback-leaning setup, people often combine a flat cashback card with a category card that matches their biggest predictable spend (like groceries or petrol), making sure monthly caps do not choke the outcome.

The best choice is the one you’ll stick with. A slightly “lower” rate you actually use correctly often beats a higher rate you rarely qualify for. That’s true for miles, for cashback, and honestly for most things in personal finance.