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Trying to save on bigger spends? Find out the benefits of using co-branded credit cards

Priyadarshini Maji
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Vicky Mukhiya travels extensively both for business and pleasure. He always manages to get discounts and rewards on his ticket bookings that are over and above the seasonal cashback. He also gets exempted from cancellation fees. Mukhiya enjoys these benefits because he owns a credit card designed for travelers. In addition, he gets access to airport lounges all over India along with free tickets once he has met the annual spending quota on his traveler’s card.

Credit card transactions are on the upswing in India. According to Reserve Bank of India data, the total number of credit card transactions at ATMs and POS terminals stood at Rs 136.72 million in June 2018, up from Rs 110 million in the same month of the previous year.

For smart users like Mukhiya, the primary usage of a credit card is not only to enjoy instant credit, with an interest-free period of around 45 days, but also to use these customized cards to suit their lifestyle needs, and avail a variety of deals, rewards, and discounts.

It is generally seen that many credit card owners easily end up spending between Rs 1 lakh and Rs 5 lakh annually, be it on traveling, shopping, or entertainment. However, these transactions are paid for either in cash or through regular credit cards. Whereas spending the same amount through a specialized credit card could give you cashback, vouchers and reward points. For bigger purchases, paying through a debit card or cash do not get you as much value back from those spends as they would if you used a co-branded credit card.
Experts suggest opting for a co-branded category-specific credit card over a regular credit card based on your spending pattern and lifestyle, will earn you higher benefits on your spends. However, one card alone cannot give you the best benefits for all types of spends. Hence, different cards have been created that meet specific needs.

Here are some of the co-branded credit cards based on different types of spending;

Fuel cards – For people spending a significant amount of fuel each month can get much higher benefits by paying through these specialized fuel cards.

Indian-Oil Citi Platinum Credit Card offers additional reward points on the first spend within 30 days of issuance. Thereafter, it offers points on every fuel spend at any of the over 1,200 authorized Indian-Oil outlets. Their one point equals free fuel worth Re 1. As joining fee, this card charges Rs 1,000 and the same amount as an annual fee. The annual fee, however, is waived off if the customer crosses a certain spending limit in a year. On outstanding balances, it charges an interest rate of 39 per cent per annum.

ICICI Bank HPCL Coral offers around 2.5 per cent cashback on fuel spends. It also waives off fuel surcharge at HPCL pumps. Both the joining fee and the annual fee are Rs 199 each. The annual fee, however, can be reversed for customers who spend Rs 50,000 in a year. The interest rate is 40.80 per cent per annum.

Travel credit cards – Commonly seen across travel, dining and entertainment cards – they offer customers complimentary access to domestic and international airport lounges.

Citi PremierMiles Credit Card – As joining benefit Citi PremierMiles Credit Card offers 10,000 miles on spending at least Rs 1,000 within 60 days of card issuance. Additional miles are rewarded on renewal of the card. Also, it awards miles on every amount spent on flight tickets, hotel stays, and all airline transactions. As joining fee and annual fee, Rs 3000 is charged by this card. The joining fee, however, is waived off for Citi Priority account holders. This card charges an interest rate of 37.20-42 per cent per annum.

SBI IRCTC Platinum Credit Card – For frequent train travelers, SBI IRCTC Platinum Credit Card offers 350 activation bonus reward points on a single transaction of Rs 500 or more within 45 days of card issuance. However, fuel and cash spend are not included. If you buy tickets through the IRCTC website you can earn up to 10 per cent value back as reward points. One reward point = Re 1. Also, you get 1 Reward Point for every Rs. 125 spent on non-fuel retail purchases, including railway ticket purchases at IRCTC website. You also get up to 10 per cent value-back on train tickets. You can also save 1.8 per cent transaction charge on railway ticket bookings through IRCTC. As joining fee customers are charges of Rs 500 and an annual fee of Rs 300. The interest rate on this card is 40.20 per cent a year.

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Shopping and entertainment – These entertainment and shopping cards come with complimentary movie ticket vouchers every month and discounts of around 20 to 25 per cent at partner restaurants.

On making the first transaction within 90 days, the Standard Chartered Manhattan Platinum card offers a BookMyShow voucher worth Rs 2,000. It also offers 5 per cent cashback on spends at supermarkets and departmental stores. Rs 999 is charged as the annual fee and as the joining fee. The interest rate on this card is 41.88 per cent per annum.

As a welcome gift, American Express Platinum Reserve Credit Card offers 11,000 bonus membership reward points. As special health and wellness benefits, Max Healthcare, Fortis Healthcare, and Texas Medical Concierge. The joining fee for this card is Rs 5,000 and the renewal fee is Rs 10,000.