Why Your Favorite Brands Offer These Hidden Credit Card Perks

What are speciality credit cards?

Speciality credit cards are cards that are issued by a company or organization to drive loyalty to them. Some of the earliest speciality credit cards available were airline branded credit cards. Now hotel groups are getting in on the act too, and even retail brands and sports teams. The rewards offered are usually very generous.

Why do these companies become credit card providers?

The reality is that these brands whether airlines, hotel chains or stores do not own and operate credit card companies. They will piggyback on an existing credit card provider’s expertise and work with them to create an over-branded card. These brands are looking to drive brand loyalists and points junkies to maximize their spend with them. It’s a win/win situation because if you signed up for the card in the first place, it’s because you are a regular user or advocate for their product or brand.

Do these cards work the same way as regular credit cards?

Speciality credit cards work exactly the same was as a regular credit card, but the rewards are heavily weighted towards the brand you have chosen. Airlines will go as far as rewarding their credit card loyalists extra frequent flyer miles when then pay for their flights on their branded card.

Any pitfalls to be aware of with these cards?

As we have already identified in this article, the rewards can be quite rich on these cards for the card’s brand issuer. Now as we all know, there’s no such thing as a free lunch! In the case of these cards the APR (or annual percentage rate) can be quite steep. A high APR is a good way for the card provider to claw back some of the cost of offering such generous rewards. APR is basically the cost you pay if you have an unpaid monthly balance on the card, wrapped in to the cost is of course the interest rate. Finally these cards can have quite weighty annual fees associated with them too.