Citibank has tied up with Shopper's Stop to offer a co-branded shopping card. Recently, ICICI Bank tied up with Big Bazaar to offer their co-branded card.

So what makes these co-branded cards different from ordinary credit cards? Are they really worth it?

Co-branded cards are offered by banks in conjunction with shops and stores and several discounts and rewards are offered to customers who shop at these places using the banks' credit cards. By doing this, the banks as well as the retail stores are attracting customers while sharing the costs.

For example, Citibank has a tie-up with Shoppers' Stop. The card provides an automatic membership to the Shopper's Stop's loyalty programme, the First Citizen Programme.

The First Citizen Programme membership entitles you to certain privileges such as product previews, priority billing, discounts and so on. Then there are some schemes that are available to the cardholders, one of which is the 0 per cent EMI scheme where you can pay for your purchases in three-month equated monthly instalments at 0 per cent interest.

However, this scheme is not available all round the year and one must check as to when one can avail this. Another interesting aspect for frequent shoppers is the reward point scheme. In regular Citibank cards, a swipe of Rs 100 entitles you to one reward point.

As against this, if you own a First Citizen's card, you will get many more points for a spend of Rs 100. For a First Citizens Golden Card, you will get five points on Rs 100 spent and on a silver card you will get four points per Rs 100 spent. Further, you will get additional points on amounts spent on in-house brands of Shoppers' Stop. Apart from this, if you use your card in places other than Shoppers' Stop outlets, you will accumulate one reward point for Rs 100 spent. You will also continue to enjoy the other benefits of regular credit cards such as free accident insurance, household insurance and so on.

There is an eligibility criterion that has to be met if you want to buy this card. If you are salaried, you must have a minimum income of Rs 72,000 per annum and if you are self-employed, the minimum income requirement is Rs 96,000 per annum. The annual fee on the card is Rs 750, which is what is charged by most credit card issuers today.

The interest rate on the card is also the same that is applied for all other cards, that is, 2.95 per cent. Further, all other charges, like service charges, transaction fees, etc, are also applicable.

ICICI Bank has tied up with retail chain biggie, Big Bazaar, for its co-branded card, the ICICI Bank Big Bazaar Card. Just like the Citibank card, this card offers cardholders discounts and certain privileges for transactions with Big Bazaar.

Here too, there is a provision wherein for a purchase of Rs 1,500 and above, you can settle your bill in three EMIs without incurring a financing charge. You get four reward points for Rs 100 spent at Big Bazaar and one reward point for Rs 100 spent at any other outlet.

There is an exception in case of EMI schemes availed at Big Bazaar where you get only one point for Rs 100 spent. On monthly purchases from Big Bazaar exceeding Rs 10,000, 100 bonus reward points are offered. This card also offers all the other benefits that are offered by the bank's other cards such as insurance and so on. Since this card is new in the market, it is being offered at an introductory application fee of Rs 500 for the first year and Rs 750 on each renewal. The eligibility criterion on this card is an annual income of Rs 60,000 for salaried persons and Rs 50,000 for the self-employed.

So does it make sense to get yourself a co-branded credit card? In terms of cost, most of the cards are priced at similar levels, both, for annual fees as well as interest rates, except that some might have some introductory offers on the annual fees.

What is more important to look at is the benefits offered in terms of discounts and rewards from the co-brand. While Shopper's Stop is restricted to apparel, a place like Big Bazaar caters to almost all aspects of shopping, from apparels to kitchenware, from groceries to upholstery.

If you are a regular shopper at places like these, to meet all your shopping needs, it would make sense to use the co-branded cards. While on one hand you can enjoy discounts from the shop, on the other, you can earn higher reward points. And as this card can also be used at other outlets, if a large portion of your credit card spends are at these retail outlets, you should definitely explore this option.

ET Intelligence Group