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Co-Branded Credit Cards

Definition: The Co-Branded Credit Cards are the credit cards issued by the banks in joint sponsorship with the retail merchants. In other words, a card issued jointly by two parties, wherein one is the lending institution (bank), and the other is a non-financial group (retail merchant).

Co-Branded Credit Cards are often used by hotels, airlines, big retail chains with the intention to get more and more customer for their product and services, by offering special offers and hefty rebates. Thus, these cards hold special privileges and discount schemes for the users.

The Co-Branded Credit Cards also give the issuing bank the privilege to access the retailer’s large customer base. By reaching to a large number of customers, the banks can expand their own kitty of customers and can deal directly for any financial query.

These cards are related to the specific merchant and not the general groups or any other formal associations. And sometimes these cards can be used with other merchants provided he is into the same line of business. The Co-Branded Credit Cards are generally issued at a cheaper price than the private labelled retail cards.

In case, no financial institution is involved, the retailers offer the loyalty points card, wherein the points of purchase get added to the card and can be redeemed whenever the next purchase is made. In case the retailer wants to avail the benefits of a co-branded credit card, then he can seek approval of the issuer bank.

The issuer bank may look for certain parameters before entering into the co-branded credit card program. These are: How strong the brand is? How big is the customer base? What is the USP? What segments are being catered to? What are the goals and objectives of co-branded credit card program? etc.

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