"Why Companies Love Co-Branded Credit Cards So Much" - Article | Credit card reward programs | Discussion forum

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"Why Companies Love Co-Branded Credit Cards So Much" - Article
August 31, 2018
10:07 pm
User230
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https://www.creditcardscanada.ca/blog/why-companies-love-co-branded-credit-cards-so-much/

Found this article well surfing the web.

Basically, they do it to get a share of the interchange fee (or boost the rewards of their card), use it for advertising, build brand loyalty, and consumer data.

It mentions it's a good idea for consumers to understand why companies like co branded cards. To me, we are giving data to them more so than a regular store (although co branded and loyalty programs are becoming the norm. now).

Those extra points do come at a cost all be it a bit hidden by the companies. I mean who reads the small text on the consent forms and pamphlets the CC gives us other than me...

The data you give has a cost to you and a value to them. Points are a value to you and cost to them. Some what mutualistic but than factor in data breaches and possible identity theft. It becomes less clear if it's a good idea to par-take in so many loyalty programs. Eventually one might find themselves with issues they didn't sign up for.

Plus, they point out, people usually spend more because of points and loyalty programs.

Add up the increased risk to ones I.D security, data being used to weaponize marketers against you, and the larger likelihood of one spending more, it starts to show its ugly head. The downsides of all these programs so many of us willingly subject ourselves to without a thought or care sometimes.

Here is a quote from the article:

"This is backed up by a 2016 report by the Nielsen Company that found that two-thirds of consumers shopped more often and spent more at retailers with loyalty reward programs."

September 1, 2018
3:00 am
Loonie
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It's good to be aware of these issues.

I suspect that most users of this forum are among the one-third of consumers who are not going to spend more or more often because of a loyalty programme.

I agree that having fewer cards reduces exposure to possible breaches, but, unless you are going to carry around wads of cash and cheque books, you are always going to have this problem, no matter what card you use. Even a debit card or bank account itself could be vulnerable. Almost everything about you is on a computer somewhere, and they are all potentially subject to hacking.

That said, it makes sense to minimize the number of cards and loyalty programmes to things you really use. The rest is clutter at best and vulnerability at worst.

When I see a points offer on something I want to buy, I translate it into a percentage return or amount of cashback, in my head. This takes me only a few seconds. If the usually-premium cost of the item is not good value after adding in the points and any coupons I may have, I don't buy it. I intentionally ignore most offers on things I have never heard of or wouldn't normally buy.

That's easy for me, but, sadly, a lot of people simply don't have the basic math skills and can't make their way through the fine print - if they find it.

September 1, 2018
1:49 pm
Londonguy
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Loonie said: ...having fewer cards reduces exposure to possible breaches...

Not to be picky about it but the bank side is pretty secure, and it's actually far more likely for data breaches to occur on the merchant side rather than on the card issuer side. So if you wanted to reduce your exposure, you would have to conduct fewer transactions and at fewer merchants, not have fewer cards.

Examples I know of in recent years are Walmart and Home Depot. Both of their payments system records got hacked and coughed up a slew of valid card info which eventually made its way out into the wild, resulting in lots of fraudulent use that somebody (the insurer?) had to eat. I still have an old MBNA MC statement from one of those events that has over 100 bogus charges on it that had to be reversed

September 1, 2018
3:18 pm
Loonie
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Good point, Londonguy!

September 1, 2018
3:22 pm
User230
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Air miles was recently hacked, PC Financial Loyalty program was hacked a year ago I think .

There has been a recent explosion of hacks over the last few years.

http://www.informationisbeauti.....hes-hacks/

Canada loyalty programs are not immune.

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