Anatomy of a Co-Branded Credit Card
I have been contemplating creating a new credit card the last few years. Most likely under the Visa or Mastercard line.<p>The thought is, create a reward card specifically for high-value/vips that has the best rewards/cashback program on the market. Currently the best card is the SPG card from Amex which gives points that can be transferred to a plethora of partners and are among the most valuable points of all cards (around 2.9cents per point). What surprising is the cards currently for high-worth users have terrible rewards programs, ie the amex black card.<p>If you created a new card, the hope would be that you could offer more rewards to transfer partners by upselling 'these are vips' you should compete to get them.<p>The challenge is in figuring out how to make it all work. Credit cards make money 2 ways as far as I can tell- The 2.9% + 30cents on every transaction, as well as the interest paid on their bill.<p>So you should ideally have at least 3% of every transaction to give back to the user in rewards while living off of the 30 cents per transaction. Hopefully the interest paid on debts breaks even with the defaults.