Select a card that has least capping towards earning reward benefits
Credit card usage and spends have significantly increased as per the latest data by the RBI. These trends are leading to a competitive market landscape where new cards are being launched with more and more features to grab consumers. Old cards are getting outdated with new cards offering better services and features such as complimentary golf classes, access to airport lounges, reward points and cashback on every transaction, etc.
With such a wide variety of credit cards in the market, using co-branded credit cards which complement one’s spending habits can be a good move.
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Co-branded credit card
Co-branded credit cards come with a special pre-arrangement such as tie-ups or partnerships with particular brands, merchants, retailers, service providers, etc. When you use a co-branded credit card on its associated brand or at its specified merchant place, you get special benefits such as extra discounts, accelerated reward points or similar other additional perks. If you use a co-branded credit card that matches your spending habits, you can get a much higher benefit compared to a regular credit card.
Benefits of a co-branded credit card
By frequently spending money using a co-branded credit card and achieving the annual spending milestone, you can get benefits like the annual fee waiver, milestone reward benefits, etc. Co-branded credit cards usually offer lower interest and processing fees on EMIs for transactions done with their associated brands and merchants. Also, most co-branded credit cards come with a welcome offer under which they provide discounts or shopping coupons that can be used at their specific associated retailer or brand store.
Co-branded credit cards offer a host of attractive benefits that include rewarding discounts, loyalty points, cashback, and much more. But what makes the deal sweeter is the additional deals and offers that partner brands offer on their co-brand credit cards, says Adhil Shetty, CEO, Bankbazaar.com. “For example, a co-brand travel credit card, in addition to offering discounts or rewards on other spends, also offers cashback and discounts to cardholders for travel bookings they make via the partner’s website. Some cards go a step further and offer complimentary merchandise for milestone spends, such as free air tickets or holiday packages, which can further help you save,” he explains.
Which co-branded credit card to choose
Before choosing any credit card you must check your spending habits. Compare the features and benefits of various co-branded credit cards that match your spending patterns. Look at their joining fee, interest rate, reward points offered, and discounts available on spending. Then compare their benefits.
Get a co-branded credit card that has multiple brand associations and that offers the highest return on your spending. Choose a card that has zero or least capping towards earning the reward benefits or discount when you use it with its associated merchant. Shetty adds, “To make the most of the benefits that a co-brand card offers, it is important to choose one that closely aligns with your needs. For instance, if you are a frequent traveller, a co-brand travel credit card can help you save on travel costs with cashback, discounts and offers tailored specifically for travel-related expenses.”
If you are a frequent flyer and purchase things frequently, one card might not be sufficient for you. Having multiple co-branded credit cards could be a good idea in such cases, but you must spend responsibly and as per your repayment capacity. Also, you need to be aware of the changes in your lifestyle and brand preferences and opt for cards accordingly.
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Cost benefits
Cost saving is one of the key advantages that make co-branded credit cards popular among consumers. For example, a laptop is available online for Rs 62,990. The interest at 16% p.a. would be Rs 10,681 for a two-year period on this product. However, if this laptop is purchased using a co-branded credit card where you can avail no-cost EMI for two years and additional discount of Rs 2000, you would not only save the applicable interest of Rs 10,681 but also get this Rs 2000 as a discount. You will just pay Rs 60,990. Despite buying this product on two-year EMI, you would save nearly Rs 13,000.
This way co-branded credit cards can give you additional savings along with more attractive benefits every time you shop or make a transaction.
PARTNER PRIVILEGE
- Co-branded credit cards have tie-ups with brands, merchants or service providers
- These offer lower interest & processing fees on EMIs for transactions done with their associated brands
- Go for one with multiple brand tie-ups & offers the highest return on spends
