Co-branded credit cards can give you more for your money

Published January 26th, 2016 - 08:42 GMT

Gone are the days when spending used to be a one-way transaction for consumers. In this age of sophisticated banking cards, we now stand to gain 'something extra' every time we use a credit card. Thanks to co-branded cards, almost anything we purchase these days - from travel to television - yields us 'points', and intelligent consumers can make this work brilliantly to their monetary advantage.

Understanding cards

Co-branded credit cards can prove to be useful and cost-effective once you understand how they work. Essentially, these cards can be used anywhere, like regular credit cards, but come loaded with various incentives, discounts and rebates.

Cards of this genre are affiliated with specific retailers, airlines, restaurants, department stores, pharmacies and lifestyle outlets. It will enable you to receive the 'highest rewards' available from the affiliated merchant. Therefore, in order to fully reap the rewards, opt for a card which is co-branded with stores, airlines or hotels you are certain to use over a long period.

Utility, luxury and more

The UAE has emerged as one of the fastest growing markets in the region for cashless payments. There are already over four million credit cards in the UAE, according to research by Lafferty in 2014.

In this competitive environment, credit card companies have made every effort to remain trendy with innovative co-branding schemes. For instance, some of them have tied up with various travel brands and airlines, offering customers sign-up bonuses, loyalty points and special discounts. This, in turn, is a great opportunity for cardholders to earn free points that can be redeemed for air fares, hotels or even as cash-back.

Noor Bank co-branded credit card can earn two FlySmile Mile for every US dollar spent. They can redeem their miles with SriLankan Airlines or any of its air and non-air partners and avail premium services, including lounge facilities, priority check-in and extra baggage.

Attractive offers are also flooding in from big UAE retailers who have entered the co-branding game in a big way. Savvy buyers should opt for cards that are affiliated to retail chains they are likely to use frequently. The gains can be substantial. For instance, under the Wafa scheme, floated by Noor Bank, you can earn, redeem and load points every time you shop at Aswaaq community stores and get two per cent to 11 per cent cash back on your purchases.

Customers indeed are spoilt for choice these days, with a number of stylish concept cards in the market. While some banks have launched 'selfie cards' which allows customers to take a selfie on their smartphone and transfer the picture to their credit card, another company now issues scented credit cards for women that comes with a number of discounts for female-centric brands. Yet another card is co-branded with 'goldback' offer for a jewellery store.

Stay alert

With so many exciting offers coming our way, it may be tempting to acquire multiple credit cards affiliated to our favorite stores. However, it is important to understand the kind of fees one is being charged. Co-branded credit cards typically charge annual membership fees in order to support their generous rewards programmes and encourage frequent use. Make sure the rewards you earn will outweigh the cost of the card.

Credit cards can give an instant hit of cash, but can also be detrimental to your financial health because of the high profit rates charged. It is easy to accumulate credit cards, max out on them and run into a web of expensive debt. Guard against this tendency.

Always be careful of fraud. Although most banks have installed real-time fraud monitoring systems to mitigate risks, the safety onus is ultimately on the user.

Remember, in today's world, careful selection of co-branded credit cards, followed by smart and safe usage can bring extra advantages for you and your family. So go ahead and make the right choice.

By Waleed Barhaji

 


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