Co- Branded Credit Cards: Advantages and Disadvantages

Credit cards are highly advantageous on their own. However, co-branded cards can give you even more benefits, especially in a particular product niche such as traveling, dining, etc. in the form of reward points and discounts, etc.

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What’s a Co-Branded Credit Card?

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As the name suggests- a co-branded credit card is a product of two brands, which in this case would be a banking company and a service provider such as a hotel chain, fast food chain, etc. The two join hands to offer special services and facilities to the card users in a way that is benefitting to them both.

Take Snapdeal HDFC Bank Credit Card, for instance. With this card, you can enjoy big discounts during festive seasons, cash back offers, and even collect reward points for shopping from the Snapdeal website. Your purchases promote the business of Snapdeal as the HDFC bank, which is the entire purpose of co-branding.

Advantages

The following are some of the major advantages of a Co-Branded Credit Card:

• Co-branded credit cards are just like standard credit cards with additional benefits. They are extremely useful if you frequently visit a mall or a store for your shopping such as BigBazaar, Reliance Digital, etc.
• Several co-branded credit cards also offer movie tickets and train/flight ticket offers, time to time.
• The majority of co-branded credit cards don’t have transaction fees.
• Purchasing with co-branded credit cards on the EMI basis can give you the benefit of zero finance charges.

Disadvantages

The disadvantages and the things that you should be careful about Co-Branded Credit Cards include:

• Some co-branded credit cards have a high annual fee, especially when compared to the standard or vanilla credit cards.
• A co-branded credit card may trick you into buying from the same brand that the card is associated with even when there are better offers available.
• Read the fine print to fully understand the benefits you can receive with a co-branded credit card. The promotional material can often be misleading.