Best Co-Branded Credit Cards – How They Help Brands And Users

Co-branded credit cards are all the rage nowadays, not just in the US but on a global level. Recently, Starbucks launched co-branded credit cards with Visa and J P Morgan Chase. Marriott International has become the latest brand to partner with reputed banks like American Express and J P Morgan Chase to provide credit card offers associated with its loyalty programs. Such cards have majorly been the staples of airline and hotel giants, and the trend has rapidly seeped into the retail industry. Companies like Amazon, Walmart, and even Uber have come up with such offers.

Co-branded cards are good for both the offering company and the credit card provider as together they can appeal a larger customer group. At the same time, they are great for brand-loyal customers for making the most of their credit. Let us teach you about the most popular co-branded credit cards.

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1. Southwest Rapid Rewards Plus Credit Card

Most of the banks have at least one credit card in partnership with any of the airline brands. Southwest Rapid Rewards Plus Credit Card is one such card. You can earn 2 points for every dollar you spend on this card for Southwest and 1 Reward Point for other uses.  The best thing about this card is that it uses a revenue-based redemption system. The number of points that you can redeem for an airline ticket is related to the cost of the ticket. The points spent can also get you a Southwest Companion Pass.

2. Marriott Rewards Premier Credit Card

Launched in collaboration with Marriott International, this credit card offers exclusive benefits to loyal customers. Marriott has the largest hotel portfolio in the world and hence this card is quite popular among those who travel around the world quite frequently. Five reward points are offered for every dollar spent at Marriott and Ritz-Carlton hotels. 80,000 bonus points will be awarded to new cardholders and 7,500 points are given for adding an authorized user to the account. In addition to this, you can enjoy one free night stay annually.

3. Citi / AAdvantage Platinum Select MasterCard

This credit card has been launched by Citibank in collaboration with American Airlines and allows you to earn double points per dollar when used for booking American Airline tickets. 30,000 bonus points are offered as a sign-up bonus and the annual fee is also waived off.

4. Starwood Preferred Guest Credit Card

American Express has launched a credit card with Starwood to allow extra benefits to frequent travelers, especially who like to travel with utmost luxury. It is a first-year free card and also allows 25,000 bonus points for first-time cardholders. Users will also get free in-room premium internet facility at Starwood; there is no foreign transaction fee.

5. Hyatt Credit Card

J P Morgan Chase introduced this credit card in collaboration with Hyatt hotels worldwide. There is no annual fee and no foreign transaction fee on this credit card. Users can earn three points per dollar spent at Hyatt hotels anywhere around the world. On airfare, car rentals and restaurants, two points can be earned for every dollar and one point per dollar for other spends. When you add an authorized user to your account, 5000 bonus reward points will be awarded.

How Co-Branded Credit Cards Help Customers?

First of all, you should not confuse co-branded credit cards with private-label cards. While the former can be used for purchases at any store whatsoever, the latter is only made for the brand that issues it. So a co-branded card works like any other credit card with the sole benefit of earning extra reward points or earning cashback when you shop at the associated brand store. The use is not limited to the brand partner.

These credit cards are extremely helpful for those who shop frequently at a particular store. For example, people who visit Walmart every week to fill up their grocery supplies would be surely interested in getting a credit card associated with Walmart. Airline brands have been in the co-branding business for quite some time now and their data shows that the number of people who booked their flights with co-branded credit cards has increased year on year.

If you are planning to take a co-branded credit card, keep the following things in mind-

  • Read the fine print for terms and conditions, especially related to the use of the card at other brand stores.
  • Co-branded credit cards are more likely to carry significant annual fees so you must check the same in advance.
  • Treat your co-branded credit card as any other card and make payments on time.
  • Stay updated with the latest offers on your co-branded cards so that you do not miss any of the benefits.
  • Do not get too many co-branded cards; only choose the brands where you actually shop quite frequently. Having too many cards increase the chances of missed or delayed payments.

Why Are Brands Eager To Launch Co-Branded Credit Cards?

This is one of the most relevant questions you might ask about co-branded credit cards. Sometimes the same question makes people averse to these offers as they think there might be a hidden catch in the scheme. So, here we will take you through the most impactful reasons why so many brands are keen on launching credit cards that are associated with their loyalty program.

Appealing The Customers

The most obvious objective of brand-bank collaborations is to improve their customer base and strengthen their loyalty program. Why would customers empty their savings accounts for big-ticket purchases when they can use their cards to shop at their favorite brand stores and earn rewards at the same time? Co-branded credit cards work as a positive reinforcement for the customers because they will keep shopping as long as they can benefit from it.

Sharing The Revenue

Credit cards happen to be one of the most profitable products for banks and finance companies. They have several ways to earn through credit cards such as interest, transaction fee charged from the customer as well as merchant, membership fee, annual fee and more. When a bank and a retail brand enter into partnership for launching a credit card, they devise a scheme on how they will monetize on this deal. For example, the bank might share the incentives they earn on new memberships or sales volume they generate with the customer.

Strategic Branding

A benefit of co-branded credit cards that brands mostly put forward in a subtle manner is that these will help their marketing and branding campaigns. A credit card that offers benefits to the users for being loyal to a particular brand popularizes the latter in the market. Co-branded cards have done wonders by subtly putting brands more into the everyday lives of people. Moreover, frequent use of loyalty credit cards allows brands to have more access to customer data which, in turn, lets them customize the products or launch new products or to change the pricing strategy of the existing product.

Co-branded credit cards create a win-win situation for everyone- the bank that issues the credit card, the brand in collaboration and the user. While the banks earn through these credit cards, users are also given equally beneficial offers as a reward for their loyalty towards a brand.

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