Did you know that your dream vacation could get closer each time you charge a purchase on your credit card?
Did you know that whenever you use your credit card you could contribute to your favorite charity?
Sound interesting?
Co-branded and affinity credit cards not only help you earn free air travel, but they can also help you support your favorite educational or cultural institution.
Co-branded and affinity cards carry the name of a third party on the card, in addition to the name of the bank or financial institution that issued the card and the card brand.
Both co-branded and affinity cards offer additional value from each transaction made with the card.
The difference is who benefits.
Co-branded cards
With co-branded cards, you typically benefit by accumulating points for discounts with every charge.
Airlines pioneered the co-branded concept more than 12 years ago, awarding tickets, upgrades, and discounts based on frequent flier miles earned for charging tickets to the airline's co-branded credit card.
There are many co-branded cards issued by banks in Asia Pacific, with co-brand partners ranging from department stores, airlines, travel agencies to retailers, etc.
Today in some countries, as high as 35 percent of all cardholders have a co-branded card.
Co-branded cards sometimes have no annual fee and higher credit limits, but they may also have higher interest rates and annual fees than regular credit cards.
If you usually carry a balance on your card, you need to determine if the rebates you earn are worth the higher interest.
Affinity cards
With affinity cards, a third-party organization - an alumni association or a charity or a museum, for example - receives a portion of each transaction made with the card.
Some affinity card partners, like professional sports teams or environmental protection foundations, may also offer perks like discounts at selected stores or a free gift with the first purchase you make with the card.
"Know yourself" should be the motto of anyone shopping for a credit card.
A bit of research and a good deal of self-analysis of your credit needs and bill-paying habits should lead you to the right card.
Regardless of which card you choose, use your card wisely, and repay your debts on time.