Co-Branded Credit Card: Definition, How It Works, Examples

(Many of the links in this article redirect to a specific reviewed product. Your purchase of these products through affiliate links helps to generate commission for LiveWell, at no extra cost. Learn more)

Co-Branded Credit Card: Definition, How It Works, Examples

Are you considering getting a new credit card? One option you may have come across is a co-branded credit card. But what exactly is a co-branded credit card, and how does it work? In this article, we will explore the definition of co-branded credit cards, explain how they work, and provide some examples to help you understand this financial tool better.

What is a Co-Branded Credit Card?

A co-branded credit card is a financial product that is created through a partnership between a credit card issuer -typically a bank or financial institution- and a specific retailer, airline, or brand. It combines the features of a regular credit card with benefits specifically tailored to the partner brand.

When you use a co-branded credit card, you can earn rewards, discounts, or other special perks associated with the partner brand. For example, if you have a co-branded credit card with a popular airline, you may earn frequent flyer miles for every dollar you spend using the card. These miles can then be redeemed for free flights or upgrades.

How Does a Co-Branded Credit Card Work?

Co-branded credit cards work like any other credit card, allowing you to make purchases and pay them off over time. However, the key difference lies in the benefits and rewards you can earn by using the card. Here’s a step-by-step breakdown of how a co-branded credit card typically works:

1. You apply for a co-branded credit card either through the partnering brand’s website or directly with the credit card issuer.
2. If approved, you will receive your co-branded credit card in the mail.
3. You can then activate the card and start using it to make purchases.
4. Each time you use the card, you will earn rewards or benefits specific to the partner brand. These could include cashback, points, discounts, or exclusive access to events.
5. Periodically, you will receive a credit card statement detailing your transactions and the rewards you have earned.
6. You can redeem your rewards based on the options provided by the co-branded credit card program. This may include discounts on partner brand products, travel rewards, gift cards, or other exclusive perks.
7. Remember to make regular payments on your co-branded credit card to avoid accumulating interest or late fees.

Examples of Co-Branded Credit Cards

Co-branded credit cards are available in various industries and sectors. Some popular examples include:

• Amazon Prime Rewards Visa Signature Card: This co-branded credit card is offered through a partnership between Amazon and Chase. Cardholders earn rewards on Amazon purchases, as well as on other categories like dining and gas.
• Hilton Honors American Express Card: This card allows users to earn points on Hilton hotel stays and other eligible purchases. It also offers complimentary hotel benefits for Hilton Honors members.
• Starbucks Rewards Visa Card: This co-branded credit card is designed for coffee lovers. It offers Starbucks rewards and benefits, including bonus stars for Starbucks purchases and free drinks.

These are just a few examples of the many co-branded credit cards available in the market. When choosing a co-branded credit card, consider your spending habits and preferences to maximize the benefits provided by the partner brand.

Now that you understand the concept of co-branded credit cards, you can make an informed decision when it comes to choosing the best credit card for your needs. Whether it’s earning miles for your dream vacation or enjoying exclusive perks from your favorite retailer, a co-branded credit card can help you make the most of your spending.