A co-branded credit card is a type of partnership agreement between three parties: the card issued, the card brand and the company that wishes to be co-branded. The primary purpose of a co-branded credit card is to enhance brand identity and promote the company’s business activity.
The benefits of co-branded credit cards
There are a number of reasons for companies and card issuers to combine their influence and adopt a co-branded partnership by producing a co-branded credit card. Some of these benefits are outlined below:
With a number of companies seeking to enter a partnership with a card issuer, it is evident that they are capitalizing through customer loyalty of their clients. For example: air miles points are rewarded to particular credit card holders, as the card issuer is in partnership with airline company.
As a growing number of companies partner with card issuers, they are offering various benefits to their co-branded card holders – thus attracting clients to bank with them.
The co-branded credit cards enable the parties involved to study the spending patterns of their card holders. As a result of this they are able to obtain a better understanding of their customers’ preferred shops and locations, as well as spending trends.
As the logo of both the card issuer and its co-branding company will be physically present on the co-branded card, it will enable both parties to enhance their brand awareness.
Building Business Relations
A co-branded credit card allows banking institutions and branding companies to build and maintain valuable and long lasting business relationships.