When utilized effectively, co-branded credit cards can significantly increase your savings during the festive period. Here’s how.
The festive season is inherently linked to shopping, as individuals partake in purchasing a wide array of items, ranging from apparel and electronics to precious metals. Retailers and online shopping platforms present substantial discounts to attract consumers during this time. Amidst this shopping excitement, co-branded credit cards can enhance your savings potential. These cards, resulting from a collaboration between a financial institution and a retail brand, offer unique rewards, discounts, and cashback on purchases made at the affiliated brand or merchant.
When utilized effectively, co-branded credit cards can significantly increase your savings during the festive period. Let us examine the functionality of these cards and analyze the financial benefits they can provide.
What Are Co-Branded Credit Cards?
Co-branded credit cards come with perks that are specific to the brand, such as higher reward points, special discounts, and cashback offers when the card is used to make purchases from that partner. These cards not only help customers enjoy loyalty benefits but also offer discounts during the festive sales.
Benefits of Using Co-Branded Credit Cards
* Exclusive Discounts and Offers
Co-branded credit cards often feature exclusive deals on the brand they are tied to. These exclusive savings are one of the primary reasons why using a co-branded card can be more beneficial than using a regular credit card.
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* Higher Reward Points
One key advantage of co-branded credit cards is the accelerated reward points system. During the festive period, these reward points could translate to significant savings, especially on big-ticket items such as smartphones, laptops and home appliances.
* Instant Cashback Offers
Many co-branded credit cards offer instant cashback at the point of purchase. For example, you are purchasing a television worth Rs 40,000 during a festive sale. If there is a 10 per cent discount, the price drops to Rs 36,000. Additionally, with a 5% cashback offer from your co-branded credit card, you save another Rs 1,800, effectively reducing the cost to Rs 34,200.
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* No-Cost EMI Options
Adhil Shetty, CEO of Bankbazaar.com, says, “Many co-branded credit cards also offer the convenience of no-cost EMIs (Equated Monthly Installments) during festive seasons, allowing you to spread out the payment without incurring extra charges.”
* Other Partner Benefits
Apart from retail shopping, co-branded cards offer advantages like discounts on flight bookings, hotel reservations and dining, which can be useful during holiday travel planning.
How Co-branded Credit Cards Can Save Money
| Item | Amount (₹) | Description |
| Price | ₹ 60,000 | Initial price of the TV before any discounts |
| Sale Discount (15%) | ₹ 9,000 | Sale discount of 15% applied during the festive sale |
| Price After Sale Discount | ₹ 51,000 | Price after the 15% sale discount |
| Cashback (5%) | ₹ 2,550 | 5% cashback using co-branded credit card on ₹51,000 |
| Price After Cashback | ₹ 48,450 | Final price after receiving ₹2,550 cashback |
| No-Cost EMI Interest Savings | ₹ 3,250 | Savings on interest by opting for no-cost EMI instead of a regular EMI at 15% interest |
| Total Savings | ₹ 14,800 | Total savings combining sale discount, cashback, and no-cost EMI savings |
Calculation by Bankbazaar.com
The table shows how a co-branded credit card, combined with festive season discounts and no-cost EMI options, can help you save a substantial amount of money.
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In conclusion, co-branded credit cards can help you reduce your festive shopping bills by offering exclusive discounts, reward points, cashback and no-cost EMI options. However, it is essential to use them wisely. Also, be mindful of the credit limit and repayment deadlines to avoid interest charges or late fees.
