Co-branded credit cards are cropping up everywhere. If there’s somewhere you like to shop, the odds are good that the store offers a co-branded credit card. These cards represent businesses of all shapes and sizes, such as home improvement stores, motorcycle companies, clothing brands, and even online retailers. The same holds for airlines, hotels, supermarkets, department stores, fuel stations, and more.
It’s important to understand that co-branded credit cards aren’t the same as store credit cards. When you have a store credit card, you can only use that credit card at the specific store in question. When you have a co-branded credit card, though, you can use the credit card at any store, restaurant, hotel, etc., that accepts the co-brand (typically, Visa, MasterCard, Discover, American Express, etc.). Understanding the ins and outs of co-branded credit cards will help you make wiser choices when deciding if this is right for you and which co-branded cards work best for your lifestyle.
How Co-Branded Cards Work
Co-branded cards carry the logos and identifications of both the business and the bank or issuer of the card. They work like any other credit card. The difference is that you earn additional points or rewards if you use your credit card to make purchases at the “co-branded” business. You can redeem these points for merchandise, discounts, cashback, and other rewards. Compared to business-specific cards, the best thing about co-branded credit cards is that you can use these cards practically anywhere a normal credit card is accepted and aren’t limited to only the business represented on the front of the card.
Types of Co-Branded Cards
There are quite a few types of co-branded cards available to consumers. While the most common are co-branded store cards (like the Capital One Walmart Rewards MasterCard or the Target Visa Red Card). But that isn’t the only option available. A few other types of co-branded cards include the following:
- Harley Davidson Rewards Visa Card
- My GM Rewards Card
- Charitable Organization Credit Cards (Susan G. Komen Visa card, for instance)
- Hotel credit cards
- Airline credit cards
- Amtrak credit cards
- Credit cards for video game enthusiasts
- Wine-lover credit cards
The list goes on and on. The odds are good that no matter where your interest lies, there is a co-branded credit card that will meet your needs and help you earn points for expenditures that appeal to you.
Advantages of Co-Branded Cards
There are two main advantages of co-branded credit cards. One. You can use these cards anywhere to make everyday purchases or to set aside for emergencies. Two. You can earn points, miles, etc., toward items or purchases that appeal specifically to you with the purchases you make using co-branded cards. Even better, most co-branded cards offer bonus points for purchases made at their business. That means that you are earning points or bonuses for future orders and purchases by supporting a business you frequent. It’s a winning proposition for you – as long as you don’t end up racking up a massive amount of debt and paying more for your purchases than you earn in rewards.
Maximizing Benefits
To maximize the benefits of co-branded credit cards, you need to understand the potential pitfalls and any available bonuses. For instance, many of these cards may charge multiple fees each year. Some fees may even occur monthly. After all, while membership does have its privileges, you often pay a hefty price to enjoy them.
Additionally, you need to make sure you’re aware of any limitations or restrictions related to introductory offers, expiration dates, and purchase minimums required to achieve the bonuses so you can make sure you’re on the right side of the equation.
Don’t forget to make sure you pay your credit card balance, or as close to the full balance as possible, each month to avoid potential interest payments and other fees that could rob you of the benefits the reward programs of these co-branded credit cards offer.
Picking the Card That is Right for You
Selecting the most suitable card for you involves carefully reviewing the fine print regarding fees and opting for a co-branded card that aligns with your current purchasing habits. Choosing cards you can regularly utilize without straining your finances or exceeding your budget is important.