Students who go to a different city or country to study would have a regular requirement for funds. Carrying a wad of cash all the time is much of a hassle for students and so is withdrawing money from ATM every few days. While banks in the USA offer student credit cards customized for the needs of students, there are no such cards in India.
Here, a credit card for students would only come in the form of add-on credit cards or secured credit cards. To apply for these cards, the applicant need not have an active credit history. Add-on cards can also be issued to a person without any income. Let us learn more about add-on cards and secured credit cards.
Add-on Credit Cards for Students
Students can get an add-on card on their parents’ credit cards. Most of the add-on cards have similar benefits as the primary credit card and would also attract an annual fee if the primary card does. Some banks offer a certain number of add-on credit cards for free. Usually, the add-on card shares the limit on the primary credit card. While the student uses the add-on card, the bill payment responsibility is on the primary cardholder.
Here’s why an add-on credit card is good for students:
- The applicant need not have a credit history to get an add-on card
- No income proof is needed for add-on credit cards
- The students can enjoy the benefits of credit cards without having to worry about the bills
- Having a credit card will make college life easier for the students as they can put bigger expenses like hostel accommodation fee, books and stationery expenditure, etc. on the credit card
- Students may also learn good financial habits when they have a credit card and have to strategize their payments as per the billing cycle
Secured Credit Card for Students
A secured credit card is offered against fixed deposit and is a good option for students. Those who have a fixed deposit with a bank can apply for a credit card against it. Usually, the banks would be ready to provide a credit limit of up to 80% of the FD amount. Some of the reasons why students should opt for a student credit card are:
- There is no need for an active credit history to apply for a secured credit card
- It helps the students start their credit journey and create a credit score
- Usually, secured credit cards do not have any joining fee or annual fee
- Students without regular income can also get a secured credit card
- Since the working of a secured credit card is much like a normal card, it would get the student acquainted with the usage of credit cards and the billing procedure
- The card would also offer rewards on the all purchases which can be redeemed later for vouchers and merchandise
- In case the student defaults on the credit card, the bank would recover the amount by forfeiting the fixed deposit
Must Read: Best Secured Credit Cards in India
How can Students Apply for Credit Cards?
Since there are no banks offering student credit cards in India, students can apply through their parents to become an add-on member on their credit card. If they wish to apply for a secured credit card, they must have a fixed deposit with the bank.
To apply for an add-on card, a primary credit cardholder must raise a request with their bank. The bank will then look into the credit card account of the user and, if satisfied, will issue an add-on credit card. Any fees or charges for the same will be deducted from the limit offered on the add-on card and should be paid when the bill is due.
To apply for a secured credit card, the fixed deposit customer can raise a request online or directly visit the nearest bank branch for an application. Some banks would also entertain the requests on their customer care helpdesk.