Why Brands Should Consider a Co-branded Credit Card Strategy

Why should brands consider a cobranded credit card? The reasons are many and potentially lucrative for your brand.
Cardless
April 25, 2023

Companies are constantly searching for new and innovative ways to drive customer loyalty. One strategy that has proven to be highly effective for brands is the use of co-branded credit cards. These cards offer numerous benefits for the brand and the customer and are valuable for building long-term relationships with shoppers.

4 co-branded credit cards from Cardless

Studies show that branded credit cards have become a popular choice among consumers, increasing spending. Among consumers, 68% agree that they modify the amount they spend to maximize the benefits they receive in a loyalty program, according to a 2021 study by Bond Loyalty and Visa.1 A 2018 study by global payments processor TSYS found that the type of rewards offered by a card is the top reason why a consumer chooses one card over another (79% of consumers responded with this factor).2

There are five primary reasons for a brand, whether that is a traditional retailer, a travel company, or other, to offer a custom co-branded credit card:

  1. Increased Customer Spending – One of the most impactful benefits of co-branded credit cards is a direct influence on customer spending, encouraging customers to return to that particular retailer. By offering rewards and incentives for using the card, retailers create and nurture more frequent shoppers. This increase can significantly impact the retailer’s bottom line.
  2. Deepened Customer Loyalty – Another benefit of co-branded credit cards is that they help to build and deepen customer loyalty. By offering rewards and benefits tied to the card, retailers can create a sense of exclusivity and special treatment for their most loyal customers. The rewards can lead to increased repeat business and can help to strengthen the overall relationship between the customer and the retailer.
  3. Improved Customer Data – Co-branded credit cards also provide retailers with extensive and valuable customer data. By tracking card usage and spending patterns, retailers can gain insights into customer’s spend preferences. Cardholder data can guide product development, marketing strategies, and other business decisions.
  4. Enhanced Brand Exposure – Co-branded credit cards increase retailers’ brand exposure. By partnering with a credit card issuer, retailers can often leverage the issuer’s marketing and advertising capabilities to reach a wider audience. This exposure raises brand awareness, attracts new customers, and drives sales growth.
  5. Competitive Advantage – Finally, co-branded credit cards can give retailers a competitive advantage in the marketplace. By offering a unique and attractive rewards program, retailers can differentiate themselves from their competitors and become the preferred choice for many customers. A strong loyalty and rewards program can help to increase market share, drive revenue growth, and solidify the retailer’s position as a leader in their industry.

Careful readers will note that card revenue is not one of these five reasons. A well-run credit card program will produce incremental revenue and profits for the brand. However, starting a co-brand card program for revenue generation alone is not a recipe for success. Brands must put customer loyalty and engagement at the top of their list of goals for building a new card program.

An example of a unique value proposition is the new Simon® American Express® Credit Card from Cardless. As consumers seek great shopping experiences, Simon’s malls lead the pack. The card offers 5% cash back at a robust list of online and in-person retailers, such as JC Penny, Forever 21, and Eddie Bauer. In addition, all purchases at any Simon Mall, Mills, or Premium Outlet in the U.S. earn 3%, plus 1.5% on all Apple Pay or Google Wallet purchases and 1% everywhere else. The new Simon card will help to draw consumers to some of America’s top shopping destinations.

If you are looking for a unique and powerful co-brand credit card program, Cardless can help. Connect with us today.


Cards issued by First Electronic Bank, Member FDIC, and powered by Cardless. 

Simon Credit Card: Rewards redeemable as statement credits only & require spend with a Simon Credit Card. There is a $10,000 annual aggregate spend maximum for 5% & 3% categories. 5% back at participating Simon retailers at Simon properties & online. 3% back only valid in-person at participating Simon properties. 1.5% back valid for in-person Apple Pay & Google Pay Eligible Purchases only and 1% back valid on all other Eligible Purchases with your Simon Card. Offers subject to change with or without notice. See cardless.com/simon for full details. 

Unless a specific brand partner (noted in the footer of this website), no brands or products mentioned are affiliated with Cardless, nor do they endorse or sponsor this article. All third-party trademarks referenced herein are property of their respective owners.

  1. Bond Brand Loyalty, “The Loyalty Report 2021” in partnership with Visa, July 20, 2021, https://info.bondbrandloyalty.com/loyaltyreport-2021
  2. TSYS, “2018 U.S. Consumer Payment Study”, April, 2019

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