When does a cobranded credit card make sense?
Editorial Disclosure – Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post..
What is a cobranded card?
Cobranded cards are credit cards that earn points or miles for specific airlines or hotels. Examples are Hilton, American Airlines, Delta, and Marriott.
Once you have a strategy for earning flexible points, introducing cobranded cards into your strategy can allow you to begin to take advantage of loyalty perks.
The key is ensuring the cobranded card offers you perks that a flexible point-earning card cannot.
An example:
This is an excellent example of when a cobranded card may or may not be a good choice for you.
The American Express Gold card earns 4X the points on dining and at grocery stores.
The Delta SkyMiles Gold American Express Card earns 2X the points on dining and at grocery stores.
You may be thinking, but I need Delta SkyMiles. This is where transfer partners come in. The American Express Gold earns points you can transfer to Delta Skymiles Gold Amex card and earn at twice the rate!
There are no considerable benefits to holding the Delta Skymiles Gold Amex card.
I’m not saying you shouldn’t open a Delta Skymiles Gold Amex card, especially if you live near a Delta hub; I’m just pushing you to think about earning rates, cards that earn transferable points, and perks that come with cards to help you decide which cards will best serve your goals.
Cobranded cards with benefits:
Here are two more examples to help you frame your thinking on when a cobranded card may or may not be a good choice for you.
The Chase Sapphire Preferred earns 3X the points on dining.
The Chase Southwest earns 1X the points on dining.
The Chase Sapphire Preferred card earns triple the points on dining, and Southwest is a transfer partner of Chase, so I can use Chase Ultimate Rewards to book Southwest flights.
Why would I want a Southwest card? The big perk of holding a Southwest card is earning the signup bonuses that help you earn points towards a Southwest Companion Pass, and points earned from a Chase Sapphire Preferred do not count toward a Companion Pass.
Annual free night certificates
Why would I want a hotel card like the IHG Rewards Premier cobranded Chase card?
IHG is a transfer partner with Chase, so I could transfer points from my Chase Sapphire to book a point stay with IHG.
The big perk of holding most hotel credit cards is a free night certificate each year, which easily outweighs the annual fee. Having hotel credit cards also helps with hotel brand status, which can come with nice perks to take advantage of while traveling.
Cobranded business cards:
If you are looking for a cobranded card, it’s always a great idea to see if you can get the benefits and the points you need with a business card. A business card is a strategic option since it doesn’t count toward 5/24 (unless it is from Capital One, Discover, or TD Ameritrade).
Helpful blog posts:
Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
I found out about points and miles accidentally.
I was researching index funds and happened upon the points and miles community through creators who also post about budgets, financial independence, and investing.
Points and miles allowed those people to travel and work toward financial independence simultaneously.
Thank goodness I got started when I did. The past almost two years of travel have been something we will never forget.
Earning points and miles through credit cards is only a good choice if you have the financial discipline to use them, like cash/debit cards.
Since we started traveling with points and miles, we have had more money going into our investment and savings accounts than ever.
Now I'm excited to teach you!
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