Travel on co-branded credit cards

FILE PHOTO: Bank debit and credit cards are photographed in this illustration picture, March 17, 2016. REUTERS/Kai Pfaffenbach/File Photo
| Photo Credit: KAI PFAFFENBACH

A post-COVID surge along with rising aspiration to travel have fuelled the growing demand for travel-centric credit cards offering benefits like accelerated rewards/air miles and discounted flights among others. While most benefits are bundled into premium credit cards, stringent eligibility criteria and high annual fee makes them less accessible to a sizeable part of the population. As a result, many travellers turn to co-branded travel credit cards.

Credit cards co-branded with airlines or hotels offer value-back in the form of air miles or loyalty points that can be used at the brand’s portal for direct travel bookings.

Most airline/hotel co-branded cards offer complimentary membership to the associated brand’s loyalty programme.

Apart from airline/hotel co-branded cards, some travel cards are co-branded with popular travel portals like MakeMyTrip, EaseMyTrip, Ixigo and Yatra, and offer discount on flights and hotel bookings made through their respective platforms.

However, co-branded travel credit cards come with their own set of drawbacks. Since rewards are offered in partner miles/loyalty points, redemption options are restricted. Some of these cards may also lack broader travel benefits around lounge access, forex mark-up fee, etc. Travellers, confused whether a co-branded travel card would be the right fit for them, should keep the following things in mind:

Compare core value

The key factor in choosing a travel credit card is rewards programme. When comparing an airline co-branded card to an airline-agnostic travel card, it is essential to evaluate the total value you get for spending.

For example, On KrisFlyer SBI Card, yearly spends of ₹10 Lakh earn 25,000 KrisFlyer Miles, enough for 1 economy-class ticket from Delhi to Singapore on Singapore Airlines. However, the same spend earns 50,000 EDGE Miles on Axis Atlas, transferable in 1:2 ratio to KrisFlyer Miles, resulting in 1 lakh miles —enough for four economy tickets on the same route.

Hence, airline agnostic travel cards like Axis Atlas or Axis Horizon could offer greater overall value. However, they might come at higher annual fee and more stringent conditions.

Additional travel benefits

Many co-branded travel cards extend more benefits like complimentary lounge access, significantly enhancing their utility for frequent travellers. It is important to check these benefits and see how they fit in your travel routine.

Most travel cards also offer bonus rewards, vouchers or other benefits on reaching spending milestones.

Right brand partnership

Consumers who are loyal to a particular airline or hotel can consider getting a card co-branded with preferred airline/hotel. While such cards would offer higher value-back on the associated brands, the redemption would be limited to their own ecosystem.

Travellers who do not want to limit the benefits to an airline or hotel can consider cards co-branded with popular travel portals such as Standard Chartered EaseMyTrip Credit Card, Ixigo AU Credit Card and MakeMyTrip ICICI Credit Card.

In conclusion, co-branded travel credit cards can be a good option for brand-loyal travellers who frequently book with a particular airline, hotel chain or travel platform. However, those looking for a single credit card to cover all travel needs may need to choose cards that offer benefits with preferred brands without sacrificing broader benefits. Redemption flexibility, spending limits and overall value proposition are the key things to consider when choosing a card.

(The writer is chief business officer, credit cards, Paisabazaar)