What Are Co-branded Credit Cards & What Are Their Advantages?

As the festive season is around the corner, many online and brick-and-mortar merchants have started coming up with various discounts and offers on the purchases made through co-branded credit cards. If you are considering buying an expensive product that is at a considerable discount for the purchase made with a co-branded credit card, it is quite natural to get tempted to apply for that credit card. However, before you make your decision, it is crucial to understand the fine points, benefits, disadvantages, etc. of co-branded credit cards. This article elucidates everything you need to know about co-branded credit cards and whether they are right for you.

What are co-branded credit cards?

Co-branded credit cards are credit cards that are offered by banks and credit card companies through a partnership or tie-up with a particular brand. These cards offer exclusive discounts, cash back offers, reward points, etc. for brand purchases. You can also use them for any other online or offline purchases like regular credit cards. However, you might not get any rewards for the purchases made outside the brand. Amazon ICICI Credit Card, Axis Bank Vistara Infinite Credit Card, IRCTC SBI Card Premier, etc. are some of the popular examples of co-branded credit cards.

There are a plethora of co-branded credit cards you can choose from based on your requirements and lifestyle. Most renowned merchants, right from grocery stores like Big Basket to airlines like Vistara, offer co-branded credit cards through credit card companies to offer special discounts to their regular customers.

What are the benefits of co-branded credit cards over regular credit cards?

If you are a frequent customer of a particular brand, the co-branded credit card of that particular brand can be beneficial to you in many ways. Here are the key benefits of co-branded credit cards over regular credit cards:

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1. Loyalty Benefits:

The major advantage of using a co-branded credit card is the loyalty benefits offered by them. It is a unique way for brands and credit card providers to reward their loyal customers. You are rewarded with loyalty points for every purchase you make through the co-branded credit card. You can use these reward points to avail discount on your next purchase or accumulate certain points to claim them for a bigger discount. For example, if you are a frequent flyer and prefer a specific airline, it is a good idea to opt for an Air Miles Credit Card of that airline. By booking your flights through it, you can earn Miles which can be used to get a discount on your next flight booking.

2. Other Rewards:

Apart from loyalty points, the high-end co-branded credit cards also offer other related benefits. For example, if you have an Air Miles Credit Card, apart from the Miles, you also get other benefits, such as a certain number of free airport lounge accesses through a Priority Pass, offers on hotels and restaurants, etc. However, before opting for a co-branded credit card, it is advisable to check with the credit card provider about the benefits offered to them as such benefits are mostly offered on high-end co-branded credit cards that could charge high annual fees.

3. Welcome Offers:

Similar to regular credit cards, many co-branded credit cards offer several welcome benefits. You can get discount coupons, welcome points, conditional reward points (for example, double loyalty points on spending Rs 50,000 in the first three months of receiving the card), e-gift vouchers, etc.

4. Worldwide Acceptance:

The co-branded credit cards can be used at any outlet of the brand worldwide and your credit card bill is generated in INR. This can be a great benefit for frequent international travellers as they do not have to worry about currency conversion and simply swipe the card.

5. Customised Cards:

Co-branded credit cards are truly customised credit cards as you can choose the card based on your lifestyle and requirements. Furthermore, you can also set a regular spending limit, international spending limit, activate or deactivate international usage, etc. to customise the card as per your usage.

6. Freebies and Gifts:

Apart from the loyalty points, many co-branded credit cards also offer freebies/gifts on spending a specified amount for a specified period.

7. Fee Waivers:

Most co-branded credit cards do not charge joining fees and annual fees to the cardholders or offer to waive them on spending a specified amount yearly. However, some high-end credit cards may charge joining and/or fees as per the terms and conditions of the credit card.

Should you get co-branded credit cards?

With many lucrative offers and benefits, it is quite tempting to get co-branded credit cards from all your preferred merchants and brands. However, having multiple credit cards can make it difficult to manage them and you may end up missing the credit card due dates, which can negatively impact your credit score. Besides, the availability of multiple credit facilities can boost impulsive spending. Therefore, it is advisable to have up to two co-branded credit cards, apart from your regular credit card that can be used for your regular transactions. It is important to wisely choose co-branded credit cards based on your lifestyle and requirements as these cards are useful only for specific purchases. Having co-branded credit cards that you do not frequently use or having multiple cards that offer similar benefits will not be useful to you and they will only take up more space in your wallet. But the carefully chosen co-branded credit cards can help you make the most of loyalty rewards and save substantial money.

Warm Regards,
Ketki Jadhav
Content Writer