How does the Swiggy HDFC credit card compare with other cashback cards?

Key benefits include a free 3-month Swiggy One membership and 1% cashback on other spends

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India's largest bank HDFC Bank has partnered with food and grocery delivery platform Swiggy to launch a co-branded credit card. 

What does the card offer?

It offers 10% cashback on the Swiggy app across all of their services- food delivery, Dineout, Instamart and Swiggy Genie.

This is the first such offering from Swiggy. The main highlight of the card is that will offer a 10% cashback on spends on food, groceries and dining out on Swiggy, implying that you can avail a 10% cashback every time you order food, get groceries or use Dineout to eat at your favourite restaurant.

This is not the first time that HDFC Bank has partnered with another platform to offer a co-branded credit card. The company already offers co-branded credit cards with companies like Tata Neu, IRCTC, Indigo and more.

Cardholders will also receive a rewarding 5% cashback on shopping across multitude of platforms platforms such as Amazon, Flipkart, Myntra, Nykaa, Ola, Uber, PharmEasy, NetMeds, BookmyShow, and many more.

The additional 5% cashback will also apply on branded websites like Nike, H&M, Adidas, Zara to name a few. Furthermore, customers will also get 1% back on other spends.

How does the card compare with other cashback cards?

With the entry of the Swiggy HDFC co-branded credit card, the cashback benefits it offers could potentially make the Amazon-ICICI and Flipkart-Axis credit cards less attractive for most users. This is because the Swiggy card provides a higher cashback rate of 10% on food, grocery delivery, and dining out, as compared to the cashback that other cards, like the Amazon Pay ICICI credit card or  the Flipkart-Axis credit card offers for shopping on their respective platforms.

Additionally, the Swiggy card also offers 5% cashback for spends on several other e-commerce platforms. This makes the Swiggy card a far more versatile for users who shop across different online stores. 

"Most co-branded cashback cards have set the maximum earning at 5% with the partner brands. The Swiggy HDFC Bank Credit Card not only doubles that value but also allows users to earn 5% cashback on other online spends across all categories including those on popular platforms like Amazon, Flipkart, Myntra, Nykaa, Ola, Uber, BookMyShow and many more. This feature makes it a worthy competitor for cards like Amazon ICICI Credit Card and Flipkart Axis Bank Credit Card," said Rohit Chhibbar, Head of Credit Cards, Paisabazaar. 

Moreover, popular co-branded cashback cards like Flipkart Axis and Amazon ICICI do not have any capping on the amount of cashback that a user can earn. The Swiggy Card, however, limits the cashback earning to Rs. 1,500 per month each for their 10% and 5% cashback categories and Rs. 500 for the 1% cashback category, added Chhibar.
 

Is there a a catch?
But here is the catch: The cardholders will get cashback in the form of Swiggy Money which can be used across Swiggy for various transactions.  This means that the cashback amount can only be used for purchases made on the Swiggy platform and not on other platforms. If you frequently use Swiggy to order food and groceries or use Dineout for table bookings, you can fully enjoy the benefits which these rewards have to offer.

But for those users who prefer the flexibility of using their cashback on other platforms might still find value in the Amazon-ICICI and Flipkart-Axis cards.

"The cashback earned on Swiggy HDFC Bank Credit Card is redeemable only on Swiggy as Swiggy Money. Hence, it will be useful only for consumers who spend a significant amount on Swiggy every month for food delivery, grocery spends and dining out," said Chhibar.

Though Amazon ICICI Credit Card also offers cashback as Amazon Pay balance, it is easier to utilize the amount earned as Amazon caters to multiple categories including travel, insurance, utility bill payments, etc. With Swiggy Money, cardholders would have only three options- food delivery, dining out and groceries.

"The potential 'catches' could include things like an annual fee for the card, a minimum spend requirement to unlock the cash back, caps on the maximum cash back you can earn, or high interest rates if you don't pay your balance in full each month. You'd need to check the card's terms and conditions for these details," cautioned  Nitin Purswani - CEO at Medius AI.

Other benefits

As a welcome benefit, the cardholders will enjoy a complimentary 3-month Swiggy One membership, which offers benefits across food, grocery, dining out, and pick-up and drop services. In addition to earning cashback on everyday purchases, Swiggy HDFC cardholders will also enjoy World Tier Mastercard benefits such as free stay and dine, complimentary loyalty memberships etc.

The card  appears to offer a high cashback on spends on their respective platform and a nominal cashback on other platforms.

The credit card will be rolled-out in a phased manner on the Swiggy app over the next 7-10 days, post which all the eligible customers will be able to apply for it.

Zomato had earlier partnered with RBL Bank to offer a co-branded credit card, which included access to its premium membership. However, the card has now been discontinued.

This card is beneficial for?

The cashback offer on the Swiggy co-branded credit card i.e. 10% is much higher than what the other cards currently offer, i.e. 5%. The Swiggy co-brand card offers this cashback on food and grocery delivery, and dining out through Dineout. For customers who use Swiggy and it’s associated services frequently, this card is  a more rewarding option.

"Since RBL Bank’s Edition Program with Zomato (including their credit card) has been discontinued, this card could be a good option for consumers who wish to save on their dining and grocery spends. In addition, cardholders can also earn 5% cashback on other online spends and 1% cashback across other categories," said Rohit Chhibbar, Head of Credit Cards, Paisabazaar. 

"Since the card offers 10% cashback on Swiggy orders and a free Swiggy One membership, it could be particularly beneficial for regular Swiggy users. How it compares with other cards will depend on the exact cashback percentages, membership benefits, and any other perks that those cards offer. Some cards might provide higher rewards for categories other than food delivery, so the best card for the consumer would depend on his specific spending habits," said Purswani .

Why such collaborations? 

For banks, collaborations like these can help them attract new customers, particularly among the user base of the partner brand. It also helps increase credit card usage, from which banks earn interchange fees. For the partner brand, it encourages customer loyalty and increases spending on their platform, contributing to higher revenue. 

Many co-branded cards offer higher rewards and benefits when used to make purchases with the partnering brand. This allows customers to earn rewards faster and enjoy more significant savings every time they spend a specific amount. The focus is on creating more convenience for customers, and innovations are endless in this sector. 

"Enabling unparalleled convenience to consumers is at the heart of what we do at Swiggy. We recognize that modern-day consumers actively seek rewards, offers, and cashback programs that add value to their spending. Keeping this in mind, we have launched this all-encompassing card in partnership with HDFC Bank and Mastercard that makes everyday shopping moments across a range of categories more rewarding and convenient," said Rahul Bothra, Chief Financial Officer, Swiggy.

"Co-branded credit cards are a great way to get more rewards for your shopping, dining, and apparel purchases. These cards are created in partnership between a credit card issuer (like a bank) and a specific brand or company (like an airline, retail store, or e-commerce platform). Today, co-branded cards are being launched in many sectors such as restaurants, travel, retail, etc. These cards are designed to cater to the needs and preferences of the target customer base, which means that customers can enjoy a range of benefits and rewards specific to that brand. These benefits can include discounts, cashback, loyalty points, and exclusive offers," said Adhil Shetty, CEO of BankBazaar.