Co-branded credit cards remained popular in 2023, as banks and fintech kept collaborating at a rapid pace to release innovative products, data compiled by BankBazaar revealed.
These developments were supported by the Reserve Bank of India’s policies that helped customers select their network provider and saw an expansion of credit cards to UPI, reported Business Standard, citing the data.
Notably, a co-branded credit card is issued by a bank in collaboration with a second entity, which could be a retail partner, travel website, premium hotel chain or a sports league. The card is sponsored by both the parties and is made to include features from both. Depending on the partner, customers get to enjoy several benefits while making transactions via the card.
Some of the most common co-branded credit cards are fuel and airline credit cards which allow customers to earn reward points that can be redeemed for air miles, flight awards, products, and travel upgrades.
In 2023 itself, credit card dues increased to Rs 2.4 trillion, as the number of credit cards outstanding surpassed 94.7 million in October, data cited in the Bankbazaar report titled ‘Moneymood 2024’ revealed. At the same time, credit card spending also grew to touch record levels at Rs 1.79 trillion. Average spending per credit card rose to Rs 5,577 from Rs 5,052 a year earlier, marking a growth of over 10 per cent year-on-year (YoY). Online spending per card also increased over 11 per cent to touch Rs 7,532, up from Rs 6,750 on a YoY basis.
"With Rupay cards now available on UPI, it is only a matter of time before other networks also get to leverage UPI. Credit cards will continue to remain the preferred instrument for larger spends, and the average spends are set to rise, with economic growth projections being revised upwards," said Adhil Shetty, CEO of Bankbazaar.
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