Supermarkets, airlines and petrol stations offer cards bearing their own names: every purchase promises points, a discount or cashback. Sometimes these cards genuinely bring savings, and sometimes they simply encourage you to spend more. In this article we explain how loyalty and co-branded cards work, their real value, and which traps you should watch out for.
What is a loyalty or co-branded card?
A loyalty card is usually an internal programme of a single store or chain — as you make purchases you accumulate points, which you then convert into a discount or a gift. A co-branded card, on the other hand, is a payment card issued jointly by a bank and a brand (for example an airline or supermarket): the payment function and the loyalty reward are combined in one card. The first is simply a points card, while the second is a fully functional bank card.
How is the reward calculated?
The promised percentages look attractive, but to understand the real value you need to look behind the figure.
Where is the real value?
A co-branded card is worthwhile only on one condition: if it earns a reward on spending you would do anyway. If you shop from an online store every month and the card gives extra cashback precisely there, that is real saving. Likewise, for someone who flies often, an airline card's miles can carry genuine value. The key question is this: does the card push you into new spending, or does it reward your existing spending?
Hidden traps
The appeal of the reward sometimes obscures the real costs. Points to pay attention to:
- Annual fee: the card's annual service fee may exceed the reward you earn.
- Expiry of points: unused points are burned when they expire.
- Limited use: if points work only at one brand, your flexibility decreases.
- Encouragement to spend more: an unnecessary purchase made "to earn points" is the real trap.
- High interest: the interest rate on co-branded cards may be higher than on a regular card; if you carry a balance, the reward loses its meaning.
Comparison with a regular card
| Criterion | Co-branded card | Regular card |
|---|---|---|
| Reward | Tied to the brand, high | Universal or none |
| Flexibility of use | Limited | Broad |
| Annual fee | Often present | Often low/none |
| Who it suits | A customer loyal to that brand | Someone who spends in various places |
Is it right for you? A simple check
- Check your spending: how regularly do you spend at this brand?
- Weigh the annual fee against the reward: does the real value you earn over a year cover the fee?
- Read the terms of the points: where and until when can they be used?
- Look at your behaviour: if the card encourages you to spend more, the benefit turns negative.
When is it worth it, and when not?
A co-branded card brings real benefit to a person who is loyal to a specific brand, pays off the balance every month and already spends a lot at that brand. Conversely, for someone whose purchases are spread across various places, who carries card debt, or who spends extra purely "for the reward," this card is often a loss. Keep the rule simple: the reward should not change your behaviour; if it does, the card is enriching the seller, not you.
Conclusion
Loyalty and co-branded cards are not automatically good or bad — the benefit arises only when it matches your spending habits. Read the annual fee, the terms of the points and the interest rate carefully, and make sure the card does not encourage you to spend more. To compare different card options and terms, you can look at our cards page.
