Sometimes I assume too much in my writings. TikTok and Instagram influencers are huge in the miles and points space, going over really basic ideas like “sign up for a credit card, earn lots of points” and answering questions about what that does to your credit, or “did you realize there are these things called points and you can redeem them?”

I run absolutely zero risk of becoming a TikTok influencer, but I also don’t write much around the very basics of miles and points collecting – in part because that’s probably not what I find interesting (I’ve been writing here for over twenty years because I write what strikes me as interesting each day) and in part because I’ve probably already written it multiple times.

So I just assume it’s obvious why banks partner with brands for their credit cards?

• It’s hard to find customers, people with means who spend heavily on cards, and convince them to stop what they’re doing and get your card and then use it.

• So banks go to brands that have customers who are passionate about them, and who value the currency they offer. Partnering with an airline or hotel company gets access to customers, who skew better off (higher spend), and who will be sticky because they value the brand’s points.

• These deals are expensive which is one reason card issuers have spent so much to build up their own proprietary programs like Membership Rewards, ThankYou Rewards, and Ultimate Rewards. Spending money awarding more of their points instead of spending money renting customer lists from an airline is a strategy if the points are lucrative enough. But they don’t tend to offer access to the same experiences (elite status).

Banks are spending billions of dollars to gain access to customers, and to convince those customers to run their spend through the bank’s products. However this strategy is difficult.

• There are fewer sticky brands as a result of consolidation. There’s no more Continental Airlines, US Airways, Northwest, or Starwood co-brand credit card. That’s one reason the cost of the deals has gone up!

• And the big deals are so large only a few banks can reasonably compete for them. Only the largest banks are in a position to compete with Chase over United or American Express over Delta. Barclays was never going to muscle Citi out of American AAdvantage (Citi had the opportunity to muscle out Barclays but wouldn’t pay a high enough price to do so in the last co-brand deal round).

As a result it can be a more fruitful strategy to fish for customers in new ponds. And we’ve seen a lot of that. Chase used to see small portfolios and feel they wouldn’t move the needle enough. Now they’re doing DoorDash, Instacart, and Air Canada Aeroplan’s U.S. co-brand.

With over 100 employees The Points Guy manages to attract just over double the readership of my site (which is just me, part-time) by one estimate. There are a handful of writers there who know their subject matter very well, while some of them seem to offer… occasional cries for help?

That’s what I thought of reading, “Enough with the super-niche cobranded credit cards already” on that site. The author may not understand the reason we’re seeing more smaller co-brand card partnerships, but if those are annoying him I have to think it’s because his editors keep wanting him to write about them?

Chase has launched the Instacart Mastercard and DoorDash Rewards Mastercard. While both are likely to be popular with fans of those brands, they don’t offer much to convince outsiders. The Instacart Mastercard offers just one year of Instacart+ (providing reduced fees on certain orders) before requiring cardholders to pay $99 a year for this service. The DoorDash Mastercard offers even less to convince outsiders: mainly discounts on orders, which aren’t permanent.

Other cards are even more niche.

Consider the fan-based credit cards from Cardless, offering cards related to NBA and English Premier League sports teams. Most cardholder benefits are related to a fan kit received on account opening, discounts on tickets and memorabilia, plus bonus earnings at the team’s official store. If you’re a die-hard fan of these teams, you may be excited to receive these discounts; for anyone else, these cards are unlikely to merit attention.

This take entirely misses the point. None of these cards is likely to be the most lucrative on the market. Here’s how to understand them instead.

1. Cardless isn’t competing in the pure rewards space (one of its co-founders, by the way, worked as an intern at The Points Guy!). Think of them competing more against retail co-brands than travel rewards. They are a startup with lower costs, and their play is an ability to quickly spin up a card product at low cost and therefore can do a lot of small brands – brands too small for Chase or Citi or Amex – and find customers that bigger banks aren’t reaching.

2. Instacart and DoorDash grew in popularity during the pandemic. They’re smaller, but Chase wants to be relevant to changing consumer tastes. There are customer bases that the bank wants to reach, and can tell a story about cross-selling banking products (that was the story about how losing big money on Sapphire Reserve was going to some day work out for them).

3. Most of these products won’t hit about their weight, though a smaller portfolio like Aeroplan should because it’s a really valuable program (Hyatt outperforms for Chase relative to size, and Starwood used to significantly outperform for American Express). The million Canadians with homes in the U.S. is also a good market to reach.

It’s not a new card in the past year (just past 18 months), and doesn’t get mentioned in the TPG piece, but a perfect example of going out and finding new, difficult to reach customers is precisely the Bilt Rewards play. They’re in the buildings in major cities where upwardly mobile young professionals rent. They’re processing their rent payments, teaching them about travel, and recommending home furnishings. They’ve built a pipeline to a customer that banks badly want to reach. They’re also offering a really strong value proposition. But to a bank it’s all about reaching their customer, the customer that everyone has been trying for.

You’re going to see more smaller-scale partnerships, not fewer, at least over time (any coming economic hiccups only forestall this, they don’t derail it). That’s because banks need to reach customers, those customers are harder and more expensive to reach, and startups like Cardless and Bilt offer new ways of reaching new customers.