Question: What are co-branded credit cards?
A co-branded credit card is one in which a company, for example, an airline, signs an agreement with a credit card company. The credit card displays the company name and logo or colors, the credit card company (such as Capital One), and the credit card processing network (such as MasterCard).
Companies enter these partnerships to promote their brands and to offer special deals to their loyal customers. And these cards are very popular. According to MasterCard, co-branded credit card spending is growing at a faster rate than non-branded card spending. In fact, co-branded credit cards comprise 55 percent of all credit card spending.
While it might save you money to use a co-branded credit card for purchases you'd make anyway, it's important to read the terms and conditions. Credit cards that offer discounts and other benefits often have higher interest rates. So even if it's a co-branded credit card issued by a store where you shop every week, make sure you read all the fine print so you understand how to use the card to your advantage.
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