Credit cards are ideal for people who are working individuals with a fixed or variable monthly salary to have easy access to money. Eligibility for a credit card requires a credit score and official documents which a student ideally does not have.
Hence, to offer students a line of credit without having to constantly borrow from parents, banks have introduced student credit cards.
What is a Student Credit Card?
A student card is offered as an add-on or supplementary credit card by all major banks in the country. If you are a student and have a source of income by working part-time, you can be a primary cardholder. However, without any income, you will be an add-on cardholder with your parent as the primary cardholder.
Types of Student Credit Cards
There are distinctive kinds of Student Credit Cards. Subsequent to rounding out the application structure, you can get a card against one of the accompanying.
A Fixed Deposit in your name
In the event that you have a Fixed Deposit in your name, you could demand the bank to give you a Credit Card against your Fixed Deposit. Your FD record ought to have a specific sum in it for your card to get endorsed.
A Savings Account
In the event that you as of now have a Savings Bank Account and a decent reserve funds history, you could demand your bank to give you a Credit Card against it.
An Add-on Card
Another approach to acquiring a Student Credit Card is to get an extra card on one of your relative’s Credit Cards. Notwithstanding, the relative would have a decent record as a consumer and a Credit Score.
Eligibility for a Student Credit Card
- The applicant must be above the age of 18.
Documents required for the card
- Identity card of the school or college
- Birth certificate
- Address proof
- Passport size photograph
- PAN card
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What to Look for in a Student Credit Card?
In order to choose the right student credit card, there are a number of factors that must be considered such as the bank, fees and charges, the credit limit of the card, etc.
Here are the Features to Look for in a Student Card:
Validity of the Card
The validity of the card must also be considered for an add-on credit card. In the case of most banks, the card is valid for 5 years from the date of issue. In comparison, regular credit cards have a validity period of only 3 years.
Low-Interest Rate
Supplementary cards have a lower interest rate compared to regular cards. Since students do not have a fixed income, banks assign a lesser rate of interest to ensure students do not have to pay an excessive amount as interest every month.
Documentation
The application procedure and the documentation for a supplementary credit card is less extensive when compared to regular cards. Banks usually request minimal documentation for this card.
Fees and Charges
An important factor to note while choosing a supplementary card is the fees and charges involved with the card. Most banks do not charge any application fee for a student credit card. There is no joining fee. Along with this, if you misplace the card or it gets stolen, the bank will issue a duplicate card for free or for a nominal charge.
Credit Limit
The credit limit of student cards or add-on cards is lesser than the primary credit card. The credit limit can be predetermined by the primary cardholder depending on the expenses. This is majorly done so that the student does not incur excessive debt.
Special Deals and Rewards
The rewards and offers which come with the primary card, the same will be applicable to the add-on credit card. Cashback offers, reward points, and other offers from various shopping platforms come with the card which can be redeemed when needed. You as a supplementary credit cardholder will also be entitled to reward points with each transaction made.
How Do I Make the Most of My Student Credit Card
If you have already applied for a Student Credit Card, you are already on your way to becoming financially responsible. Here are a few things you could do to make the most of your Credit Card:
- Set a low credit limit in the beginning to get the hang of your expenses.
- While you could always carry over a balanced amount to the next month, it is better to pay off the balance on a monthly basis. This will help you build a solid credit history.
- Use the rewards or perks that come with the card carefully. Use it when you absolutely must. Splurging is not advisable. Spend responsibly.