It seems these days that every time a new credit card hits the market, questions start swirling about whether or not it’s a scam. The OCBC 365 credit card has certainly generated its fair share of skepticism since launching a few years ago.
In this in-depth review, I’ll cut through the rumours and misinformation to give you the facts on this much-debated card.
Background on OCBC Bank and the OCBC 365 Card
Before diving into an analysis of the card itself, some context on the issuer will be helpful. Oversea-Chinese Banking Corporation (OCBC) Bank is one of the largest banking groups in Southeast Asia by assets. Founded in 1932, it has a long history and strong reputation throughout Singapore and the region.
OCBC launched the OCBC 365 Credit Card in 2017 as a premier card targeted at affluent customers. Right from the start, the card stood out for its attractive bonus points structure that allowed cardholders to earn 1 point for every S$1 spent on the card. This was a notably higher earn rate than most other cards on the market at the time.
Of course, with any product that promises outsized rewards, skepticism inevitably follows. Some of the early questions raised about the OCBC 365 card included:
- Is the high earn rate sustainable long-term for the bank?
- Will ongoing annual fees for the card outweigh the value of rewards earned?
- What restrictions or limitations could diminish the value proposition over time?
Let’s examine each of these areas of concern more closely.
Analyzing the Rewards Structure
One of the primary reasons many questioned if the OCBC 365 card was “too good to be true” revolved around the generous 1 point per $1 spend earn rate. Critics argued it didn’t seem financially viable for the bank long-term.
However, a closer look at the mechanics reveals the earn rate is sustainable through a few key factors:
Very High Minimum Spend Requirements
To qualify for the top-tier Platinum or Black card variants annually, customers must spend at least $30,000 or $60,000 respectively on the card. This ensures only higher spending customers reap the full rewards.
Limits on Point Redemption Amounts
Points can only be redeemed in allotments of a minimum of 2,500 points which is equivalent to $25 in shopping credits. This restriction prevents customers from “cashing out” earned points in very small increments that would be unattractive for the bank.
Ability to Depreciate Point Value Over Time
The terms allow OCBC to periodically review and revise the Points Conversion Rate, ensuring the long-term liability of points on their books remains manageable as redemption behaviors change.
So in summary, while the 1:1 earn rate grabs attention – clever structuring of spend minimums, redemption floors, and dynamic point valuations equip OCBC to sustain this program profitably for the long run. It’s not a “loophole” – just savvy rewards program design.
Evaluating Associated Annual Fees
Another critique leveled at the OCBC 365 card was that annual fees, which range from $192 to $384 based on the variant, could easily exceed the value of rewards earned for some users.
Here are a few considerations on the annual fees:
✔️ For customers who regularly spend $30,000+ annually on the card, a $192 Platinum annual fee is unlikely to outweigh the potential rewards value. Even factoring in a conservative 2% average rebate, that’s $600+ in statement credits annually.
✔️ The same logic applies for Black cardholders spending $60,000+ who pay $384 annually but can realistically earn $1,200+ or more in value.
✔️ Customers with budgets that don’t allow spending that much can consider the lower-fee entry-level Infinite card instead which offers a still-competitive 0.5 points per dollar rate for a $96 fee.
✔️ Annual fee credits are also frequently offered as sign-up promos that can effectively make the first year free for new applicants.
So while the annual costs are indeed higher than many no-fee cards, calculated customers spending significant amounts each year stand to easily recoup those fees multiple times over through rewards if using the card judiciously as their primary vehicle.
Reviewing Potential Program Restrictions
With any travel rewards or loyalty program, it’s wise to scrutinize the full terms for limitations that could restrict redemption value over the lifetime of using the product. Here are the key stipulations to note with the OCBC 365 program:
✔️ Points do expire after 36 months of inactivity on the account. However, this is still a fairly generous expiration timeframe by industry standards.
✔️ Points cannot be reconstituted if the account is closed, and any remaining balances are forfeited. So don’t expect to walk away with a stockpile of points if closing the card.
✔️ Rewards can only be redeemed for statement credits to offset future card purchases, not for direct cash back payments into a bank account.
✔️ Award flight prices are dynamic – there are no advertised fixed point rates. You’ll need to monitor flight costs.
So, while some conditions do apply, nothing seems unduly restrictive compared to similar premium travel rewards programs. Common-sense expiration policies and inability to “cash out” points directly help ensure ongoing viability for OCBC.
Summary Verdict – Is It a Scam or Legit?
After scrutinizing the OCBC 365 credit card program across these key areas – rewards structure, annual fees, and potential restrictions – it does not appear there are any glaring red flags to consider it a “scam” as some skeptical observers originally alleged.
OCBC has taken a savvy, measured approach to designing this product that balances attractive customer value propositions against the underlying sustainability of the program for the bank in a responsible manner.
For customers able to spend a minimum of $30,000 annually on their card while maintaining discipline over spending habits, and who value maximizing rewards, the OCBC 365 card offers a very compelling value proposition – especially considering the current annual fee promotion waiving the first year’s cost.
Of course, it remains crucial for any individual considering the card to conduct their own independent assessment accounting for their unique spending profile and needs.
But sweeping generalizations that the program is a “scam” due simply to its strong rewards structure do not align with the factual reality upon scrutiny.
Bottom line is, this product from a reputable issuer appears legitimate for qualifying customers seeking a premium travel rewards experience.
Alternatives to Consider
While the OCBC 365 card holds appeal for certain customers prioritizing rewards maximization, it will not be the best fit for every individual. Here are a few potential alternatives also worth examining:
Offering 0.5x velocity miles per dollar spent albeit without any annual spend tiers, this card’s lack of an annual fee makes it more accessible for regular spending. However, redemption value is less flexible.
The US$595 annual fee is steep but lucrative perks like airport lounge access and statement credits offset costs for frequent travelers. Awards are fixed and easy to understand though earn rates are average.
UOB Preferred Platinum Visa/Mastercard
A lower $150 annual fee provides generous rewards atop base spending with its 1.5x multiplier on the first $15,000 per year. A good compromise for modest budgets.
CIMB Visa Signature Card
No annual fee keeps this a budget-friendly cashback option at 1-2% tiers. Lacks glamour but ideal for disciplined spender prioritizing simplicity.
Do your research to see which program most aligns with your broader financial picture and needs. Don’t assume the OCBC 365 is automatically your sole or best consideration without vetting alternatives. Competition often drives further improvements across the board.
In conclusion, while it’s right to approach any product with healthy skepticism, sweeping claims that legitimate innovative programs like the OCBC 365 credit card are mere “scams” rarely hold up to deeper scrutiny and analysis. Banking relationships also deserve prudent trust through reputable institutions.
With responsible due diligence accounting for individual circumstances, premium rewards propositions offering strong perceived value need not inherently raise red flags – even if not optimally designed for every user.
Custom programs balancing profitability and customer interests can co-exist constructively when thoughtfully managed.
Has this investigation assuaged initial concerns for readers still on the fence about the OCBC 365 card? Drop any other questions in the comments.
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