Student add-on cards: Key things parents should watch out for

Students are quickly becoming financially responsible individuals by managing their own tuition payments and offsets after their courses or school houses as well as everyday spending. It is then that parents look for safe and effective ways of educating their children on financial responsibility. However, parents need to comprehend the nuances before plunging into it.

Here is a complete guide to parents in the year of 2025 in introducing them to the understanding of how student add-ons and cards work, for it offers descriptions of their advantages and how to apply.

What are add-on credit cards?

The card issued in the students' names has the same credit limit under the primary account to which it belongs and is mainly issued on behalf of a student who is a minor. In fact, under such circumstances, there is independent access to a card by the student for use; he or she does so with the parent still answerable for payments.

Who is eligible for getting an add-on card?

An add-on card is issued to:

• Children aged 18 years and above (some banks allow even those above 15).
• Parent, brother, or spouse to the primary cardholder.
• Person having valid id proof and relationship proof.

Key features of student add-on cards

• Shared credit limit: Add-on cards are a deduction from the primary credit card, credit limit and not a separate credit card. This keeps parents in charge and supervision.
• Individual card, individual bill: The primary cardholder's statement carries all charges even if a student presents his distinct card for a debit. This ensures that costs are entirely transparent and subsequently simplifies billing.
• Customised spending limits: Multiple banks allow for personal spending limits to be established on add-on cards, blocking foreign transactions & limiting the use to specific categories.

Why consider add-on cards for students?

1. Manage credit exposure: With an add-on card, children can learn to use credit without the potential for overspending. This fosters a sense of early discipline concerning finances while also serving as a training ground for money management.
2. Establishes a credit record: Some banks inform credit bureaus of activity on add-on cards. This way, the student builds up a credit score that may come in handy sometime in the future when loan or independent credit card applications come up.
3. Emergency money access: The card provides a safe and assured way to access money in an emergency for students studying abroad or elsewhere without having to chase cash transfers.

How many add-on credit cards can be availed on a credit card?

(Source: BankBazaar)

Risks parents should keep in mind

With add-on cards you do have flexibility, but they come with challenges. Here are just a few:

• Overspending: If students think there is unlimited money, they may perceive it as "free money."
• Effect on credit score: If parents are making late payments, they could negatively affect their credit score.
• Misuse: If students are careless with the card, the goal of providing financial literacy could be lost.

How to apply for an add-on card?

Major Indian banks offer add-on credit cards. In general, the process consists of:

1. Completing the application (either online or in-person in a branch).
2. Submitting the add-on cardholders' KYC documentation.
3. Verifying your relationship (such as an Aadhaar or birth certificate).

In most cases, approvals are stated to be reasonably quick, especially if the primary cardholder has a good repayment history.

In conclusion, an add-on credit card is a purposeful device that encourages learning and responsibility in the world where financial independence starts earlier - but without removing parental control. It can help give parents peace of mind while preparing a young person for future financial journeys using proper care and boundaries.

Disclaimer: Mint has a tie-up with fin-techs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.