Each credit card comes with its own unique benefits, which might focus on certain spending categories, like shopping, dining, air travel and many more. Among these, there are some cards that offer exclusive benefits on certain brands or platforms. These co-branded credit cards come with niche benefits catering to the spending needs of those who are loyal to the partner brand. You can check eligibility and apply for credit cards that are co-branded with a particular brand once you ensure that your spending habits align with the card features. To help you make the right choice, let us understand what co-branded credit cards are, how they work and why you should consider them.
What are co-branded credit cards?
The credit cards which the card providers offer in partnership with any brand, business or retailer are called co-branded credit cards. These cards usually come with exclusive brand-specific benefits, rewards or loyalty programs, in addition to the regular card issuer offers, through which you can get accelerated savings on the spends made on that brand or business. So, apart from the base reward rate on your spends, a co-branded card lets you avail extra perks associated with the partner brand.
Note that, unlike loyalty program cards, the use of co-branded cards is not restricted to the partnered brand. Co-branded cards function like regular credit cards and can be used to make payments at POS terminals, for online spends or to withdraw cash from an ATM up to a certain limit. The only difference is that they provide accelerated earnings and additional benefits with the partnered merchant.
Why Choose Co-Branded Credit Cards?
Co-branded cards come with their own set of pros and cons. Some of their advantages are listed below:
Higher Rewards, Discounts, Loyalty Bonuses: Co-branded credit cards come with better benefits on your spends with the partnered brand. These benefits can be in the form of incremental reward points or loyalty points, cashback, bonus vouchers or brand discount on your brand-associated spends, thus giving you greater returns than a regular card. For example, with Flipkart Axis Bank Credit Card, you can earn 5% unlimited cashback on your Flipkart purchases along with 4% cashback on preferred merchants like Uber. Cult.fit, etc. Some co-branded credit cards also come with other features related to the same spending category, for instance, co-branded airline credit cards offer additional air travel benefits like airport lounge access and discount on hotel bookings apart from the airline loyalty points.
Customised to Your Lifestyle: You can choose any of the co-branded credit cards based on your lifestyle and spending habits as they are customised for different needs and different types of customers. Those who take flights frequently can opt for a credit card that is co-branded with some airline or travel portal to maximise their savings on travel related bookings. Similarly, if you prefer shopping online, then you can choose a card that is in partnership with one of the online shopping portals. In this way, co-branded credit cards can provide benefits that are customised to your lifestyle needs.
Complimentary Memberships: Cardholders usually get complimentary access to the brand’s loyalty program via the co-branded credit card. This helps you to maximise your savings and returns as you can earn loyalty points on every purchase, which can later be used to avail further discounts with the brand.
Global Acceptance: You can use your co-branded credit card online as well as offline at any domestic or international outlet. These credit cards let you make payments in both domestic and foreign currencies, however, similar to other credit cards, forex mark-up fee and other related charges would be applicable on your foreign currency transactions.
Who Should Get Co-branded Credit Cards?
Before applying for a co-branded credit card, it is advisable to observe your spending patterns and check whether you have any brand preference when it comes to shopping, travel, dining or other categories. If you have any such preferences or any brand you use on a regular basis then it is a good idea for you to consider getting a co-branded credit card that can help you maximise your savings on that particular brand.
However, getting a co-branded card can also come with limitations on the categories you can earn rewards on. Moreover, many co-branded credit cards only allow you to redeem your rewards on the partner brand or platform, which restricts you from utilizing the rewards across other categories. If you wish to have a card with decent overall benefits, then a co-branded credit card might not be a good one for you. So, you must consider all the benefits and limitations of co-branded credit cards, along with your requirements, before taking the final call.
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