In the 1990s, banks classified customers and their rewards by issuing only Platinum, Gold, or Titanium cards. Consumers had no choice in selecting a card, as the type of card issued was solely determined by their income. The industry saw a significant shift in 1997 when Citibank, in collaboration with Indian Oil Corporation, introduced India’s first co-branded credit card. This partnership continued to innovate, eventually launching a co-branded card for small businesses in 2007.
In the past decade, banks have introduced differentiation based on reward points and cashbacks.
Earlier this year, credit card spending surged to record levels, reaching Rs 1.79 lakh crore. Even the average spends per card also saw a 10.4% year-on-year increase, from Rs 5052 to Rs 5577. Amidst this growing trend, co-branded credit cards are becoming increasingly popular, particularly among millennials and Gen Zs. These cards are launched in partnership between a bank and another company, sometimes a retail, airline, or travel company. These days, FinTechs are also entering into strategic partnerships with banks to offer seamless T&E benefits to their corporate clients.
With a plethora of options available, end consumers are often spoilt for choices. Here are some strategies to maximize the benefits of your co-branded credit card.
Understanding co-branded credit cards
Co-branded credit cards cater to customers’ varied needs, offering tailored reward points and benefits that can be redeemed according to their preferences. Previously, cards provided generic points that could be used on rewards platforms for items like electronics, apparel, and lifestyle products. However, these items were often overpriced relative to the points required for redemption.
Essentially, a co-branded credit card is issued by a bank in collaboration with another company. These cards bear the logos of both the bank and the partner company, offering rewards or points specific to the partner’s products or services. This partnership allows banks to tap into the existing customer base of the partner company, and in turn, the partner company supports the bank with marketing and distribution efforts.
Digital expense management
Now banks and fintech companies are increasingly teaming up to introduce co-branded credit cards for businesses, aiming to streamline how companies handle their employees’ expenses digitally. This innovative approach allows for better expense management and offers employees various benefits. These cards not only provide the convenience of digital expense tracking but also offer rewards and discounts that can be beneficial for both the employer and the employee.
Exclusive rewards and offers
Co-branded credit cards often come with exclusive rewards and offers that are specific to the partner company. These can include discounts, loyalty points, and special deals not available to other cardholders. Unlike store-specific cards, co-branded credit cards can be used anywhere the card’s network is accepted, giving you the flexibility to use the card for a variety of purchases while still earning rewards.
Travel benefits
Many co-branded travel cards offer benefits such as free access to airport lounges, discounts at hotels or resorts, and even upgraded membership status with airlines and hotel chains. Additionally, some banks partner with petroleum companies to offer co-branded cards that provide rewards on fuel purchases and waive fuel surcharges based on transaction thresholds.
Airline partnerships
Some airline companies have introduced co-branded credit cards that offer exclusive benefits such as free air tickets, priority check-in, and additional baggage allowance. These partnerships have seen huge success in attracting frequent flyers who benefit from the airline-specific rewards while enjoying the convenience of a widely accepted credit card.
Maximizing offers
To maximize the benefits of a co-branded credit card, it’s essential to choose the right card that aligns with your spending habits and lifestyle. If you are a frequent traveller, a co-branded travel card that offers airline miles and hotel discounts would be ideal. Many co-branded cards offer attractive welcome bonuses. Make sure to meet the spending requirements within the specified time to take advantage of these bonuses.
Redeeming rewards
Regularly check your reward points balance and redeem them for products, services, or discounts offered by the partner company to significantly reduce your overall expenses. If your co-branded card offers membership programs with tiered benefits, aim to reach higher tiers to enjoy enhanced perks such as additional discounts or free upgrades. Keep an eye on special promotions and offers available to co-branded cardholders, including limited-time discounts, double reward points, or exclusive access to events.
Monitoring and management
Use the card issuer’s online platform to monitor your spending, track your rewards, and make timely payments to keep your account in good standing, which is essential for enjoying the full benefits of your card.
Final thoughts
Co-branded credit cards have tailor-made benefits catered to specific partner companies. By choosing the right card and strategically using it, you can maximize your rewards and savings. Whether it’s travel perks, fuel savings, or exclusive discounts, these cards provide significant value when used wisely. As credit card spending continues to rise, leveraging the benefits of co-branded credit cards can help you manage your expenses more effectively and get the most out of your spending.