Earn from your spending with OCBC 365 and FRANK

Tuesday, May 12, 2015 Coftea Coftea , Finance 8 Comments

Even with the recent changes to OCBC 360 savings account, the ability to earn up to 2.25% of your money (capped at 60k) still makes it a top choice to put your money into it. While reviewing the policy changes, it was also a good idea to review my expenditures and see how I can better make use of OCBC credit card offerings.

Why look at OCBC offerings?

The 360 account entitles you to 0.5% bonus if you are able to spend at least $500 on OCBC credit cards. These cards include 365, Titanium, Platinum, FRANK, Robinsons, Plus! and Best Denki. With the bonus equivalent to interest in a normal savings account, it makes sense to consolidate my spending and get the bonus. The 365 and FRANK cards are my top picks because simply, they offer cashback. Cashback are instant and hassle free. I don't like points, miles or credits which have often expired before I am able to make my claim.

Additionally, I seldom visit brick and mortar shops anymore. Robinsons and Best Denki card are pointless. I also don’t travel enough to make the full use of miles card like Titanium. Frequent travelers might want to take a look at their new Voyage card, which promises to award you with miles for all return flights, including budget.

What are the cashback offered?

Frankly speaking, we spend money 365 days a year. Wouldn’t it be awesome if we can get money back on our spending? That’s precisely what the cashback offered for these two cards promise. Let’s compare the 365 and FRANK benefits side by side.

	365	FRANK
Minimum spending	$600Include one-time and recurring spending	$500Include one-time spending only
Dining	6%Weekend locally3%Weekday locally and Overseas	0.5%
Online Shopping	3%	6%
Groceries	3%	6% Buy online 0.5% Otherwise
Buy online	3%	6%
Transport	0.3%	6% Rebate on Nets Flashpay Auto Topup $50, capped at $6
Telco Bills	3%	0.5%
Petrol	18.3% 5% cashback after 14% upfront discount for Esso and Caltex including station, loyalty programme and card discount.	0.5%
All others	0.3%	0.5%
Capped amount	$80 Absolute cap	$60 For 6% transactions only. No cap for 0.5% cashback.

It is obvious that the two cards have their own strengths and complement each other. I like the rebates on recurring bills on 365, which covers life necessities like groceries, telco and petrol. Whereas on the FRANK, it is more for one time purchases. The 6% online shopping cashback is truly a gem for someone like me who embraces online shopping. Think airplane and hotel bookings, Qoo10, Lazada, Taobao and Amazon, coupled with emergence of sites sharing their commissions back to consumers like Shopback, online shopping has never been easier and cheaper. FRANK elevates online benefits to a new level.

Are the rebates too good to be true?

Precisely, which is why it is important to understand two important caveats to the cashback. Firstly, a minimum spending is required to get the full rates. On the 365, you will enjoy the stated cashback with a minimum spend of $600, else the rates fall back to a meagre 0.3%. It is $500 on the FRANK with rates falling back to 0.5% otherwise. It must be noted that FRANK doesn't add recurring bill payments to the minimum spending.

Secondly, there is an amount capped to the rebates. 365 has an absolute cap of $80, which means that once it is reached, no further cashback will be given. With average cashback at 3%, that translates to cashback on spending up to $2666 on 365. FRANK is more lenient in this aspect, which caps $60 for transactions that are entitled 6%, and any additional spending will still be entitled to 0.5%. Simply, the first $1000 eligible spending on FRANK will get 6% and any further amount will get 0.5%.

Caveats, hidden in hard to find T&C are common across all credit cards that offer cashback. I find that the requisites imposed on OCBC cards seem to be more straight forward and easier to achieve. As comparison, UOB One card, a strong competitor in cashback, needs you to meet their spending requirements consecutively for 3 months before giving you a quarterly cashback.

How will I use them?

My strategy will be to prioritise spending such that the minimum $600 on the 365 will be reached. All recurring bills will be charged to it. I’ll not only use it for my visits to NTUC, Sheng Shiong and Giant, but also ad-hoc small purchases over a month.

FRANK is reserved for online purchases, but if my spending cannot reach $500, I’ll stick with 365 as I can still get 3% cashback on it. Remember that FRANK only gives 0.5% when the minimum spending is not fulfilled. However, if my online spending can exceed $500, I will definitely use FRANK. This applies even if the minimum spending on 365 is not reached. Why? If I have already charged $500 to 365 and need to spend a further $600 online, using FRANK gets you more.

Spend that $600 on 365
Current spending with 365	$500
Future spending with 365	$600
Total spending on 365	$1100
Entitled cashback (average, requisites met)	3%
Total cashback ($1100 * 3%)	$33.00

Spend that $600 on FRANK
Current spending with 365	$500
Future spending with FRANK	$600
Entitled cashback on 365 ($500 * 0.3%) (requisites not met)	$1.50
Entitled cashback on FRANK ($600 * 6%)	$36.00
Total cashback	$37.50

FRANK is also a NETS Flashpay card with auto-topup facility, providing much convenience to use it in public transport and vehicle's IU unit. Topup amount is fixed at $50 each time and 6% cashback is up to 2 top-ups per month. Again, the minimum spending comes into play. 6% will turn into 0.5% if I cannot meet the criteria. I’m currently using Citibank SMRT card which entitles me up to 2% SMRT$ rebates and I’m getting around 1.5% currently (minimum spending not met). Therefore, I’ll keep FRANK as an option for transport only when I know I’m eligible for the 6% cashback.

What to do next?

As you see, getting the most out of your credit cards requires discipline to track your expenditures. Truth to be told, I’m lazy. But I want more money. So my 3 broad approaches to wise spending is:
These OCBC offerings may not cater to your specific needs and it is always wise to keep a lookout on the competition. UOB One account and One card has just joined in the fight. DBS, where are you?