Cobranded Credit Cards 2023

The cobranded credit card is a significant part of U.S. card portfolios at major issuers. Unlike the private-label card, the cobranded card operates on an open network allowing the cardholder to use the card outside of the merchant. These card products, which are generally aligned with travel or retail merchants, offer a way for issuers to acquire a large base of loyal customers who will generate interchange revenue. Our research shows that customers who will use rewards associated with cobrands tend to be from younger generations, which is an attractive segment for issuers looking to grow their card portfolios.

Cobranded card portfolios tend to be weighted heavily toward either the travel segment or the retail segment, with travel being the dominant segment for cobrands overall. With economic uncertainty and a potential recession looming, issuers that have generated a significant number of subprime accounts may face difficulties; however, we maintain that issuers will continue to do well overall. Cobranded cards will continue to be an important part of the market and should at least be on the radar of your organization, regardless of the size of your portfolio.

Key Questions discussed in this report: 

• How important are cobranded cards to credit card issuers?
• Which segments are cobranded credit cards attractive to?
• How do cobranded credit card partners generate revenue?

Companies mentioned:

American Express, Apple, Athleta, Bank of America, Barclays, Bed Bath & Beyond, Best Buy, Bilt, Bloomingdales, Capital One, Chase, Choice Hotels, Citi, Comenity, Delta Airlines, Dillard’s, Discover, Exxon Mobil, First Electronic Bank, General Motors, Goldman Sachs, Kroger, Marriott Hotels, National Hockey League, Old Navy, Royal Caribbean, Sunoco, Susan G. Komen Foundation, U.S. Bank, United Airlines, UPromise, Walmart, Wells Fargo