Credit cards help in multiple ways. It allows you to shop big and pay in easy installments. Lending institutes also offer loans on credit cards. Companies like Cred provide attractive offers and discounts on credit card bill payments. Hence, you can meet immediate needs and save money with credit cards. However, getting a credit card requires an impressive credit record, a stable income, and a responsible spending pattern. These conditions make it difficult for students, freshers at entry-level jobs, and low-paying jobs to avail the benefits of credit cards.
So, what should they do? Can they enjoy the advantages of credit cards?
Yes, Add-on Credit Card is the perfect solution for this huge segment of society.
We will delve deeper and explain everything you need to know about Add Credit Cards in the following paragraphs.
What is Add-on Credit Cards?
A credit card holder can share their credit limit with family member/s through a supplementary credit card. The principal cardholder can keep a tab on family expenses via credit card/s and reduce the overall maintenance cost of multiple cards in the family. The beneficiary of the add-on credit card should be above 18 years of age. It could include parents, spouses, or children. Banks offer add-on credit cards for only premium and super premium customers. Several banks offer a couple of free add-on cards, and after that, they start charging annual fees and joining charges.
Leading Credit Cards and Fees for Add-on Cards
Air India SBI Signature Credit Cards – Nil
HDFC Regalia First Credit Card – Lifetime Free
Axis Bank Ace Credit Card – Nil
Citi Premier Miles Credit Card – Communicated at the time of sourcing a add-on credit card
IndusInd Legend Credit Card – Nil
Advantages of Add-on Credit Cards
Accumulated Reward Points
‘‘More the merrier, as they say, fits suitably with multiple add-on credit cards. If you direct bills of all credit cards to the principal credit card, all reward points will be accumulated against the primary card. These accumulated reward points can be redeemed for shopping, flooding, travelling, etc. Several credit card providers offer to convert your reward points into air miles. You can also avail the option to convert the reward points into cash. The converted cash is credited to the primary credit card account, which you can use for making payments.
Therefore, multiple add-on credit cards can give higher reward points and associated advantages. Consult your credit card provider to learn the options to use the accumulated reward points.
Milestone and Rewards
Milestones with credit cards are a certain threshold of spending. Banks offer bonus points and rewards after reaching these milestones.It would be difficult to reach milestones for lone spenders. If there are multiple spenders using add-on credit cards, reaching the milestone would be convenient. Milestone benefits are generally for affluent spenders and are offered to premium credit card holders. SBI Card Prime, HDFC Diners Club Privilege, Axis Vistara Signature, and SBI Elite are leading examples of such credit cards.
Introduction to Credit
Students and freshers can get their first introduction to the world of credit with add-on credit cards. This is good for financial awareness and literacy. People become more responsible towards spending and financial decisions. However, you should monitor their credit card spending and encourage them to use credit cards wisely. Explain reward points, account statements, penalties, and other essential aspects of using credit cards. Add-on credit cards help to understand how a credit card works. It will help students in the future with how to keep their credit scores strong and keep credit card bills under check.
The fees for add-on credit cards vary according to the credit card type. It ranges from nil to around INR 1000. The primary credit card holder is liable to pay all the bills from add-on credit cards in the family. The limit of credit stays the same for add-on credit cards and primary credit cards.
Things to Consider Before Applying for Add-on Credit Card
The primary credit card holder should consider the following aspects before applying for an add-on credit card.
- The person should show responsible behaviour towards spending. An irresponsible person can spend more than required, and you must bear the inflated bills. It is better to ensure a credit-responsible person before getting a supplementary card.
- Terms and conditions about credit cards and add-on credit cards are subject to change according to the internal policies of banks. The charges and penalties vary from bank to bank.
- Therefore, consult your credit card provider and ask about any new policies, charges about add-on credit cards, annual fees, and anything you need to know before applying for a supplementary card.
Credit cards are a responsible financial instrument. You should ensure a mature person for add-on credit cards to avoid unpleasant surprises. Ask your bank to clarify everything about add-on credit cards and enjoy the advantages.