How do co-branded credit cards work

The providers' co-branded credit cards

Co-branding credit card - customer loyalty today

For many companies today, customer loyalty is a particularly important point and involves entire departments within a company. Due to the fierce competition in the market, it is important to stand out from the crowd and to find ways to retain customers over the long term. One of the more and more popular options is co-branding credit cards. A credit card cannot simply be offered by everyone. The best-known companies in this area are VISA and MasterCard or American Express. VISA and MasterCard in particular are not passed on exclusively by the company itself, but rather by partner companies or financial institutions. Anyone who concludes a contract with the credit card company can also issue the credit cards. This is how co-branding works. In principle, this is a contractual relationship between the credit card provider and a company. The company can then give the credit card its own branding, for example with the company's logo, certain images or lettering. The Lufthansa credit card, for example, is particularly well known. The purpose behind the co-branded credit cards is clear. The point is to bind customers to your own company for as long as possible. However, this does not only work via the issuing of a credit card but above all via discounts and bonus systems, which are usually also associated with such a credit card. The companies themselves can determine the cost of a co-branded credit card. It is therefore not possible to make a general statement here. A comparison when looking for a good co-branded credit card is therefore definitely recommended.


Discounts and bonus systems for the co-branded credit card

Of course, customers want to be courted by a company in a certain way and therefore it plays a major role for companies to really think about customer loyalty. This is how the bonus systems or discounts came about that are known today for co-branding credit cards. For example, if you opt for a Lufthansa credit card, you can use the card to collect airline miles and receive discounted flights. The ADAC is also a well-known company that relies on co-branding credit cards. Here, for example, fuel discounts or discounts on travel bookings are on the program.

In general, the system of bonus points can be found primarily with co-branding credit cards. When paying by credit card, bonus points are credited to an account each time. Usually this is done 1: 1. With a turnover of one euro, the customer receives one bonus point. But of course other combinations are also possible. Depending on the system, the points can later be exchanged for cash or rewards, airline miles or discounts. Attention: With some bonus systems it is the case that some of the points can also expire. It is therefore important to check your points account regularly and to redeem the bonus points you have collected on a regular basis. Basically, the bonus systems are usually not particularly worthwhile but a nice bonus. Especially when the co-branding credit card is also used frequently. So if you pay a lot, often and large amounts with the card, you can benefit.