Glossary
Co-Branded Card
A co-branded card is a type of credit card issued jointly by a merchant and a credit card network, such as Visa or MasterCard, or sometimes directly with a bank. These cards prominently feature the branding of both the issuing bank and the merchant, linking the identity of both entities. Co-branded cards are widely accepted at all locations where cards from the issuing network are accepted, offering the versatility of a regular credit card with additional benefits.
Co-branded cards typically offer specific rewards and incentives that encourage cardholders to frequently use the card and remain loyal to the co-branding merchant. These incentives often include points, discounts, or cashback on purchases made at the co-branding merchant and sometimes on general purchases. The rewards are designed to enhance customer loyalty to the merchant while also increasing credit card usage.
Originally popularized by airlines to promote brand loyalty among frequent flyers, co-branded cards have expanded across various sectors, including retail chains, hotel groups, and even service providers. For example, an airline co-branded card might offer additional frequent flyer miles on airline purchases, priority boarding, or access to exclusive lounges. A retail co-branded card might offer extra discounts, special sales access, or exclusive merchandise.
The strategic partnership behind co-branded cards benefits both the merchant and the issuing bank. Merchants gain from increased customer retention and spending, while banks benefit from the expanded use of the credit card and reduced marketing costs, leveraging the merchant’s brand appeal. For consumers, co-branded cards are a way to earn more significant rewards in specific loyalty programs and save money on purchases with their favorite brands.