In India, while obtaining an add-on credit card for minors is impossible, you can apply for an add-on credit card for individuals aged 18 and above. Credit card issuers allow the primary cardholders to issue secondary cards to their family members, including:
- Spouse
- Parents
- Children above 18 years of age
- Siblings
Using a credit card helps teach your children financial literacy and makes them adept at managing credit responsibly. Know the various perks of using a secondary credit card to maximise its benefits.
Brief Introduction to Add-On Credit Cards
If you want to enjoy the perks and benefits of a credit card, you need to meet some strict eligibility criteria regarding:
- Income and earning stability
- Credit score
- Existing debt and obligations
- Age
If you cannot meet the eligibility criteria, consider applying for a supplementary credit card with a family member. This card is issued against a primary credit card, allowing the primary cardholder to take responsibility for the secondary user.
You can enjoy all the add-on credit card benefits attached to the primary one using this card. In most cases, the charges related to the primary one are the same for the add-on credit card. In other cases, you can get the add-on card for free.
Giving your children a credit card may be an optimal solution when:
- They are travelling within India or overseas
- They are studying away from home in India or abroad
- They are in college and need to make educational, travel, lifestyle purchases
Generally, you can apply for two to three secondary cards per credit card, but some issuers even offer up to five cards. The application process is relatively simple, and you can apply by following these steps:
- Step 1: Visit the issuer’s official website or launch the mobile app
- Step 2: Apply for add-on credit cards based on the cues you see on screen
- Step 3: Fill out the form with the required information, if needed
- Step 4: Attach the necessary KYC documents of the secondary user
You can also apply for a secondary credit card offline by visiting the nearest branch of your issuer and discussing it with their representative. It’s a good idea to check with your issuer for specific details regarding benefits and setting spending limits before making a decision.
One of the many benefits of add-on credit cards is the opportunity to teach your children financial discipline. This will help them:
- Become responsible for managing their expenses
- Learn to prioritise spending and stay on a budget
- Understand how a credit card cycle works and why paying by the due date is necessary
- Save by seeking offers and deals
- Monitor and track their reward points
This experience can help them understand the benefits of credit cards and how to use them responsibly. In addition to functionality, they will also learn about related charges and fees, providing a solid foundation for managing credit in the future. While there is no add-on credit card for minors, you can give your child a debit card if he or she is above 10 and less than 18 years of age.
Factors to Consider Before Giving Credit Cards to Young Adults
While using a secondary credit card can give financial freedom to children, it comes with responsibilities. Educate your children on how to use a credit card with simple tips like:
- Using it for only emergency purposes or for things previously discussed with you
- Learning how to avoid peer pressure when it comes to spending on luxuries
- Not going over the limit set by you
It is important to note that usually, secondary credit cards share the limit of the primary card. It, therefore, becomes be a risky option to hand over an add-on credit card to children. Ultimately, the primary credit card bill will include the total charges of all secondary card holders.
Keeping this in mind, some credit card companies allow you to set a spending limit for the add-on card. That way, your children can stay accountable and not go over the limit. Some cards, like the One Credit Card, allow you to set and adjust the limit directly from the mobile app.
It also helps if you educate your children regarding the following aspects before handing the card to them:
- Calculation of interest rate
- The consequences of maxing your credit card
- Debt accumulation
This can help you teach them to be more responsible for their financial decisions.
How to Regulate an Add-On Credit Card
In addition to helping your children learn about the usage of this financial tool, you can control the usage of the supplementary card by taking the following steps:
- Monitoring the Credit Card Expenses
You can log in to your net or mobile banking account and check the expenses made on the card.
- Differentiating the Expenses
You can use any budgeting application, the issuer’s mobile app, the credit card statement or an Excel sheet for different credit cards. That way, you can differentiate the expenses made on the add-on credit cards.
- Setting a Reminder
You can use your mobile app to set up an alert. That way, you will get a notification for every purchase made using an add-on card, which will help you keep track of all the expenses.
Making the secondary cardholders understand the add-on credit card benefits will ensure they use it responsibly. If you are looking for a credit card that makes managing this easy, get the One Credit Card. With its MyFamily feature, you can give up to 5 family members an add-on card, set spending limits and monitor all transactions.
Moreover, you and the add-on card user can earn 5X rewards on the top two spending categories per month, which you can use to save on future transactions. Its full-stack mobile app allows you and secondary users to check offers around you via GPS, so you can take advantage of discounts. Apply now and enjoy all these benefits with your children!
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