Co-branded debit cards: How GOOD are they?

Debit cards have been increasingly gaining importance as well as acceptance amongst Indian customers. The Indian customer being more of conservative in attitude finds better cash management with the debit card. The increased usage of debit cards led to the advent of co-branded debit cards. But ae they any good?

What are co-branded debit cards?

These cards are similar to conventional debit cards issued by banks. The only difference lies in the fact that the card has a tie up with other businesses/organisations/brands too. So while conventionally the debit card has association with a bank and a payment service provider like Visa/Maestro, the co-branded card has association with a third element too -- the organisation/brand.

The rising popularity of debit cards led organisations/brands to co-brand these cards as a brand promotion activity which would in turn benefit their sales. The card thus acts a marketing tool for the brand.

The organisation gets to print its logo on the card. Both the bank as well as company leverage on each other's competencies as well as customer base.

These cards benefit the customer by enabling her/him to meet money requirements even when s/he is falling short of cash. They act more like prepaid cards. This is because these cards allow shopping only for the amount of balance available in the customer's account.

There are rewards and discounts associated with these cards in a wide range of categories like travel, lifestyle, entertainment, telecom, petroleum etc.

Courtesy: 

Some co-branded debit cards offered by banks:

HPCL-ICICI Bank co-branded debit card

The card comes as an association of HPCL with ICICI Bank. It offers the card holder a 2.5 per cent waiver on fuel transactions. The offer is however applicable at only selected HPCL petrol pumps.

The waiver is applicable only on transactions above Rs 400.

Apart from this benefit the card can be used for all other kinds of purchases like travel, lifestyle, shopping amongst others.

Every spend on the card earns reward points for the customer. These reward points are called i-mints. The customer gets to earn 1 i-mint for every Rs 100 spent at merchant locations in India.

For every Rs 100 spent at merchant locations outside India, the customer earns 10 i-mints and for transactions through websites, the customer earns 5 i-mints per Rs 100.

The card also brings with it air accident insurance worth Rs 50,000 and purchase protection worth Rs 25,000.

Shoppers Stop-Citibank ATM/Debit Card

This card allows the customer automatic membership to the Shoppers Stop First Citizen programme. With every Rs 100 spent on the card at Shoppers Stop, the customer earns five reward points.

For every card spend of Rs 100 at other merchant locations other than Shoppers Stop, the customer earns 1 reward point.

The card comes for annual fee of Rs 500.

It also brings personal accident cover worth Rs 1 lakh for the card holder.

Also, an add on card is provided with the original card. The add on card is linked to the Citibank suvidha savings account of the customer.

Indian Oil-Citibank Premium Card

This card comes as a tie up between Citibank and Indian Oil. It offers zero fuel surcharge to cardholders at all Indian Oil outlets.

The card has an annual fee of Rs 600.

Reward points are called as Turbo points in this card. For every Rs 100 spent using the card, the cardholder earns turbo points. These points are redeemable for cash credit.

The card comes with complimentary personal accident cover worth Rs 2 lakh. Add on card is also available with this card.