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.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.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.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.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.