If you are planning to opt for a credit card, then you must have encountered the term ‘co-branded cards’ or perhaps you already have one.
Co-branded credit cards are special types of credit cards offered by different merchants, designed to provide exclusive advantages and rewards to customers who are loyal to a particular brand. If you frequently shop at a specific brand and want to maximize your benefits, it’s worth exploring the features and strategies for getting the most out of these co-branded credit cards.
Besides the brand-based advantages, co-branded cards work just like regular credit cards. You can use them to make purchases outside of the products or services offered by the associated company. However, you may not get rewards in that case.
How do Co-Branded Credit Cards work?
Co-branded credit cards were introduced in India back in 1996, with the primary aim of benefiting both merchants and creditors. The concept involved a sponsorship scheme that allowed brands to retain loyal customers through credit card offerings.
This unique credit facility operates like a standard credit card but grants cardholders exclusive access to rewards and perks offered by the sponsoring merchant. These enticing rewards encouraged borrowers to use their credit cards more frequently, ultimately benefiting the creditors by earning them higher interest income. On the flip side, the sponsoring merchant received a percentage of the transactions made through the co-branded credit card.
Let’s understand this with an example: Meet Manish, an individual who uses the new ixigo AU Bank Credit Card. Manish enjoys numerous rewards whenever he uses his credit card for flight bookings, hotel stays, train ticket bookings, and other services.
Manish can leverage all the possible benefits and rewards every time he uses the card. Also, Manish was able to explore exotic destinations in India and abroad at more affordable rates.
It’s important to note that these rewarding opportunities extend beyond just airlines; they also apply to various retail or service-based merchants, including supermarkets, hotels, restaurants, and more.
