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BW Businessworld

Explained: How To Unlock Maximum Potential Through Co-Brand Cards

Co-brand cards stand out as a win-win, given that the very idea behind introducing these cards was to bring out a ‘smart way’ of purchasing, while also earning points on every spend and getting benefits from the co-brand partner.

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Investing in a credit card is a commitment. We stack up rewards, learn to leverage the billing cycle, maximize our benefits, set up auto-pay (standing instructions), and in a world of online purchases and transactions – we even tend to save cards on our online accounts. Safe to assume thus, that we have longterm relationships with our credit card providers. 

For the evolved customer, choosing the right credit card is an extremely involved decision and should be tailored to individual lifestyle, spending habits and goals — whether that’s accumulating points and miles for travel or securing discounts, deals and cash backs on everyday purchases or great offers on specific spend categories. If you are a frequent flyer, you would want to look for cards that also give you exclusive perks such as free extra baggage check-ins, priority boarding, access to premium lounges, or consideration for upgrades and bonus amenities. 

Banks specifically market different cards for different consumers, so according to your needs – you can either find a card tailored to you, or choose a card that offers the widest range of benefits. Selecting the right credit card therefore deserves some thought! Which bank should you go for? Should you opt for a free or a fee card? Should you pick a bank rewards card or invest in a co-brand card? While some of these are easier to address (for example: your bank preference, weighing the fee against the benefits), what sometimes needs more attention is the value of a co-branded card versus a bank rewards card. 

Bank reward cards – depending on the variant – are often positioned as a cheaper (fee wise) version with similar benefits. But smart consumers have learnt to go beyond just the cover. To understand the true value of a product you are committing to, it is best to look beyond just the price tag. While picking a card for yourself it is advisable to look for joining benefits & rewards, ongoing rewards and – in the case of cobrand cards – benefits that accrue on your card from the bank as well as from partners. 

Co-brand cards stand out as a win-win, given that the very idea behind introducing these cards was to bring out a ‘smart way’ of purchasing, while also earning points on every spend and getting benefits from the co-brand partner. Today usage of such cards, that encompass the best of both worlds, have grown exponentially with travel as the foremost motivator, followed by fuel, e-tail and retail shopping. These segments offer tangible benefits like complimentary tickets, vouchers, cashbacks & discounts, exclusive privileges, leading to consumer gratification. 

One of the reasons co-branded cards are popular is because they are not just about rewards; the benefits that members accrue by committing to two brands is always higher than committing just to a bank. Fuel co-brand cards often allow point redemptions at pumps, retail cobrand cards bring additional discounts, assured cashbacks or free memberships along with strong vouchers and exclusive sales. Reward program co-branded cards allow customers membership upgrades, fast-track earnings & provide a slew of unparalleled joining benefits. 

Using a co-branded credit card smartly could be the difference between saving a few bucks and getting complete value out of it. Oftentimes, through a bank rewards card, you gain access to rewards that you might not use or milestones that are difficult to reach if you just use the card for store purchases and gas. With co-branded cards, you can unlock rewards that are feasible and redeemable. 

Most co-branded cards, however, continue to be used at random, usually for bigger purchases, thus limiting potential rewards that can be generated on an everyday basis. This may not unlock the maximum value your purchases could offer. If you are loyal customer of a brand, then owning their co-branded card should work for you. However, if your spends are diverse and varied, you may want to invest in a co-brand card that grants you rewards, deals and discounts on a variety of products and services, while being brand agnostic. 

Frequent flyers swear by airline co-brand cards which help them stack up miles on the go for their favourite airline, while also bringing a range of travel benefits. These benefits, are however, restricted to travel with the chosen airline. Unless you only fly with a particular airline, you should invest in an airline agnostic co-brand card that helps you rack up points, miles and secure discounts. This will help you earn and redeem across a range of airlines. 

Breaking down smart transactions 

To begin with, make a list of monthly planned expenses. Certain expenses are obvious and recurring –a visit to the supermarket for monthly provisions and refuelling your car. You should also make a list of oneoff expenses, especially major ones. 

How do you optimize these – to make your expenses earn for you? 

Rather than heading to a supermarket out of habit, shop from one that has a tie-up with your existing cobranded card. Refuel only at outlets for which you have a co-branded card. That way, you get a waiver on the surcharge, along with the reward points. Head to an affiliated boutique apparel outlet to pick-up ethnic wear, and book room nights and dine-outs during your vacation with places that have a tie-up with your co-branded travel / lifestyle card. 

You get rewards already provided by your bank, as well as those provided by partners of the brand you opt for and a slew of benefits that are built around your lifestyle choices. It brings home the best of both worlds — for you.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Vikas Chandak

SVP & Head - Strategic Businesses, Financial Products & Partnerships at InterMiles

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