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While co-branded credit cards provide ease of use and many attached benefits, you should examine all fine prints before going for one.

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What Are Co-branded Credit Cards?

Retail companies and banks jointly offer credit cards which are routed through credit card companies, they are known as Co-Branded Credit Cards. These cards are available at economical prices as compared to the private label retail cards. Through Co-Branded Credit Cards, banks are able to peep through the customer base of the joint retailer.
 
You can use these cards at specific institutions and that helps in gaining reward points and other benefits apart from the benefits that regular cards provide. If you are the one who is devoted to a particular brand or spends a chunk of money in a particular sector say airlines then co-branded cards can serve to be useful to you.
 
Examples – Let us understand a Co-Branded Card with a little depth. Say for example if you go shopping specifically to Westside and you hold a HSBC Westside Credit Card it gives you an edge over other customers as you are entitled for exclusive sale previews at Westside, Exclusive billing counters are built in for you at the stores, you can ask for home delivery of altered garments, earn more reward points when you go Westside shopping etc.
 
Similarly if you travel frequently then Platinum Edge Card under the flagship of HDFC Bank Ltd will provide you a bouquet of advances when you travel through Air India and Jet Airways.
 
CitiBank and Indian Oil offer a fuel card that helps you to earn cash backs but only if you use it frequently exclusively at Indian Oil filling stations.
 
Pros of Co-Branded Credit Cards 
  • In order to avail maximum benefits from this card you need to spend frequently and widely.
  • Co-Branded Cards offer a wide range of special discounts and up gradations if used frequently for specific brands or sector.
  • Few co-branded cards also offer free merchandise after spending some specific amount or redemption options along with frequent flyer program or frequent buyer program.
  • For some people the biggest attraction of having a traveling co-branded card is that they are able to earn free travel when they use it frequently.
  • Co-branded cards are international cards. These can be used anywhere across the borders and the bill is generated in INR.
  • As these cards have a tie-up with VISA or Master Card they own worldwide acceptability.
  • Co-branded cards also come along with 24*7 assistance and flexible payment options.
  • Another advantage is that you earn reward points with each purchase you make, big or small. You can then redeem these reward points for goods or services once they get accumulated.
  • No transaction fee is offered by CitiBank and Indian Oil fuel card which has made it quite attractive and popular. The surcharges are waived off. Quite impressive is it not? 
Cons of Co-Branded Cards
  • While you plan to grab your favorite co-branded card make sure that you read carefully through the fine prints mentioned on the form as there can be a catch. Enquire about the benefits of the card. There are some descriptions that you may find difficult to understand and lead you to additional cost.
  • Co-branded Cards generally have significant fees attached to them. Make sure when you opt for your card you analyze well the benefits that you will receive and the annual fees that you need to pay. Opt for it only when you are get benefits.
  • Another disadvantage of co-branded cards can be that the attractive rewards, discounts etc that you receive are associated with the partnered brand.
  • There are late payment fees, interests and penalties attached to co-branded cards as well. Make sure that you choose your card only keeping in mind your brand loyalty and your spending habits.
  • If you use ATM with these cards you are charged 2.5 percent as transaction fees which is mostly a hidden charge. Rs 50 are charged for every usage.
  • All the co-branded cards come along with insurance covers. However, the promoters do not own the liability of arranging for the coverage, now that is something you can raise your eyebrows at.
  • It goes without saying that the attractive reward points, flyer programs, special discounts etc generally lead you to overspending as you aim at collecting one extra point for so and so voucher or ticket or discount. 
It is quite obvious that adding plastic money in your wallet gives you ease and comfort especially while you are traveling as it relives you from carrying cash in your pocket. However, there are chances that you may end up spending more than what you have planned with the new spending power at your disposal.
 
If you are a brand loyal person and spend quite a sum on your favorite brand then opting for Co-Branded Cards may work in your favor. You may sign-up for a co-branded card after analyzing the cost that it inherits and the benefits it provides to you. If your spending pattern is not very frequent and broad then however attractive co-branded cards may seem opting for them may not turn to be a wise decision.


  • jayesh:
    very useful points about cards.... Thank you...
    23-Feb-2013 09:50 AM