A co-branded Credit Card has both advantages and disadvantages. If you use it smartly, it can fetch you a lot of benefits.
A co-branded Credit Card is jointly offered by banks and retail companies, hotel chains or any other merchandise, and is sponsored by both entities. The highlight of co-branded cards is that they come with special discounts and features to woo the customers. Some of the most commonly used co-branded Credit Cards are Fuel and Airline Credit Cards, which come with rewards points that can be redeemed for air miles, class upgrades, products etc.
A co-branded card has both advantages and disadvantages, so you must use the card smartly to maximise benefits.
Why Should You Use A Co-Branded Credit Card?
A co-branded card is normally an international card with acceptability across borders, allowing you to get the benefits of the associated brand all over the world.
If you are a frequent flyer, then you could enjoy numerous benefits that the airline companies offer by partnering with card companies. For example, Jet Airways offers a co-branded card with IndusInd and American Express. Similarly, Air India has a co-branded card with SBI. Apart from discounts and offers, many of these airline co-branded cards offer airport lounge facilities to their customers.
Co-branded fuel cards are popular among card users and are used to purchase fuel. For fuel purchase, card companies impose a fuel surcharge to the customers. But, if you use a co-branded card and get the fuel from the associated fuel station, you will save around 2.5% surcharge. Some popular co-branded fuel Credit Cards are Citibank IOC Card, ICICI HPCL Coral Credit Card, etc.
Similarly, co-branded cards are beneficial for people who travel frequently as they can enjoy discounts on hotel bookings, flight bookings, holiday trips, etc. For example, the Yatra SBI Card offers air ticket discount vouchers from Yatra.com on joining, 6X reward points on dining, movies, entertainment, departmental and international spends, and access to MasterCard lounges at domestic airports. SBI also has an IRCTC Platinum Card that provides travel offers from IRCTC.
Apart from cash discounts, a co-branded card also offers greater reward points via the associated brand, whether through online or offline shopping points. The co-branded card is not restricted to travel, airline or fuel-related transactions. You can also get a co-branded card for buying groceries, movie tickets, online shopping, car accessories, etc.
Additional reading: Credit Card Handbook: All Questions Answered
Things To Keep In Mind
You must know the terms and conditions of the specific co-branded Credit Card before you use such cards. The association of the brand and the card company may not be there forever, so you must check from time to time about the latest offers. The charges on co-branded Credit Cards may vary from regular cards so you should be aware of the charges while using it with merchants other than the brand. The reward points, JPMiles or other advantages that you may get by using the co-branded card may have a certain expiry period, so check these beforehand. Also, redeeming the reward points may carry certain charges depending on the card’s terms and conditions. So, calculate the overall benefit before you redeem the accumulated points.
If you are a frequent user of a specific brand, you can benefit by using its co-branded card (if available). If you can save some money and have more advantages in the long term by using the co-branded card, then you can prefer it over a regular card for specific brand transactions.