Why I’m not raving over the cobranded cards…

I want to take some time and give my two cents on the debate between co-branded credit cards and rewards cards—more specifically why I believe airlines aren’t giving enough incentive over premiere rewards cards. My opinion has been well heard about personal rewards cards like the Chase Sapphire Reserve, but I want to take some time to go over the pros and cons. I think both have their pros and cons, but my overall opinion is beginning to shift from where it first was.

Why I like co-branded cards:

  1. Sign-up bonus
    • Like many other cards, many of the co-branded credit cards offer some great sign-up bonuses. Some companies offer better bonuses than others, but many can pay for a full weekend of hotels or a roundtrip ticket across the country. As mentioned in my previous post, I got an exclusive offer from Delta and American Express for 60,000 points after $3,000 of spending in the first 3 months. These miles are taking myself and my girlfriend to Seattle and Victoria, Canada later this summer.
  2. Membership Status
    • For most hotels or airlines you will receive some kind of entry level status. Airline cards are not too generous with the status, but hotels will give you usually give you the first level of status. The Hyatt credit card will give you Discoverist status, the Marriott card will give you elite status, Hilton will give you gold elite, and so on. On the surface this doesn’t seem too valuable, but with my Discoverist status I have received some awesome benefits at Hyatt’s wonderful properties.

      Due to my Discoverist status with Hyatt (the lowest level!) I was upgraded to a city-view suite in New Orleans. 

      I booked a stay at the Hyatt House hotel in downtown New Orleans and because of my Discoverist was upgraded to a suite with a city view.

  3. Lounge/Suite Access
    • Whether it’s a hotel or airline card, a lot of these co-branded cards offer benefits like airline lounge visits or suite upgrades. For most airlines you have to pay for one of the premium cards, but it still makes the cards very valuable.
  4. Elite Qualifying Points
    • Like the perk above, this perk is usually offered on airlines for only the premium cards. But many hotel cards offer some sort of qualifying status points. It is worth mentioning for those new to the game that any kind of sign-up bonus does not go towards earning elite status. For someone that isn’t traveling on a regular basis this is a valuable perk to co-branded cards.
  5. Higher Earning Potential
    • Many co-branded cards offer either a certain amount of points back on points spent with the company, or points back when redeemed for award stays. A lot of the airlines offer extremely high multipliers on spending within that airline. If you are traveling specifically with one airline (and intend to pay for it), or one hotel, then a co-brand card might be for you.

This leads into the positives of co-branded cards—but if you intend to fly with one airline or stay exclusively with one hotel brand, it may be a good idea to supplement your spending and enhance rewards with that brand.

So when would be a good time to get a cobranded card…

  • You want to gain miles with one specific airline or hotel
  • You want to gain status or some elite benefits with a specific card
  • Looking for a specific perk
    • e. using the Southwest Credit Cards to help get you closer to the 110,000 points needed for the coveted Southwest Companion Pass
  • You need the sign-up bonus for a special trip you have coming up

Why I dislike co-branded cards:

  1. Restrict your loyalty
    • This is the most obvious downfall to co-branded cards—if you are paying for a card with a certain airline or hotel, you are more likely to forgo possible savings with one company to stay loyal. This has its benefits, but as people trying to SAVE, we should always want to find the best deals.
  2. Lack of benefits when spending
    • This really varies from card to card. But most cards only offer a bonus of spending for spending with the company itself. As I will go into depth in a separate post, a lot of bank rewards cards offer multipliers on certain areas of spending, like 3x points on travel and dining with the Chase Sapphire Reserve. To maximize your daily spending, it makes the most sense to be receiving multiple points when you can. So more often than not, you will pick the card receiving more points over the alternative.
  3. Lowest level cards don’t offer enough
    • This reason is admittedly weak and a little vague, but ultimately, I expected more from any kind of loyalty to an airline. DISCLAIMER: Most hotels offer only one credit card. But the lowest level cards with most airlines don’t offer any status. With my Delta Gold AMEX, as mentioned, I do receive priority boarding and a checked bag but I don’t even get upgraded to Silver Medallion status. Besides the miles bonus, there is not a ton of value in this card.
  4. Elite qualifying spend
    • As mentioned above, some higher fee cards will offer a certain amount of elite qualifying miles. But overall, the major US airlines have made credit card spend obsolete in achieving status.

      As you will notice in the above screen grab, credit card spend only gets me 50% of the way in achieving status. So as is similar to American and United, I can only get so far by spending on my credit card. I must complete a BLUE and GREEN bar, which means I must fly a lot (when I am gaining in the spend category anyways!

I intend on making a post like this but with the perks of a premium rewards card, like the Chase Sapphire Reserve.

The final leg…

There are many positives to cobranded cards, like high point bonuses or suite upgrades, but ultimately I find the cards falling short. As someone who travels quite often, there is definitely some bias here. I get a lot of the benefits from traveling that these cards could usually give you. If you have one airline you intend on spending a lot of money with, a cobranded card could be for you. With everything in this hobby, the strategy really depends on the person and how they want to attack.


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