Features and Benefits of Add-On Credit Cards

Credit cards are among the most useful financial tools, as you cannot only get an interest-free short-term loan but also earn rewards when you shop using your credit card (read our comparison between credit cards and debit cards).

However, since your credit card balance is essentially an unsecured loan, banks require you to satisfy a few eligibility criteria before you can apply for one. Two of the most important criteria used by banks to determine your eligibility for a credit card include a stable flow of funds in your bank account and a good credit score (usually > 750). Due to these eligibility criteria, financially dependent individuals, students, and even first-time job holders have a hard time getting a credit card. That’s where add-on credit cards come into the picture.

What Are Add-on Credit Cards?

Add-on credit cards or supplementary credit cards are additional credit cards issued under the credit line of the primary cardholder and share all the benefits of the primary credit card. The total credit limit on the card is shared among the primary and add-on credit card(s), i.e. spends on primary and all add-on credit cards count towards the total credit limit of the card. The primary cardholder, however, can limit the spends on add-on credit cards.

Features of Add-on Credit Cards

Add-on credit cards are always linked to a primary credit card, and the credit limit is shared with the primary and other add-on cards (in case more than one add-on credit card is issued). Add-on credit cardholders also enjoy the same reward points/cashback benefit as the primary cardholder. Following are some of the key features of add-on credit cards-

Shared Credit Limit

As mentioned earlier, the card’s credit limit is shared amongst the primary cardholder and all add-on cardholder(s). By default, the credit limit applicable on an add-on credit card is the same as that for the primary credit card, the primary cardholder can however limit the monthly spends on the add-on card.

Reward Points/Cashback

In most cases, add-on cardholders also earn reward points/cashback at the same rate as the primary cardholder. The Reward Points or cashback earned on add-on cards are added to the primary cardholder’s account and also count towards the max cap (if applicable) on the Reward Points/cashback.

Lounge Access

Many credit cards offer complimentary airport/railway lounge access. The lounge access benefit is usually not applicable to add-on credit cards. Some premium credit cards like HDFC Infinia Credit Card, HDFC Diners Club Black Metal Credit Card, and ICICI Emeralde Credit Card, however, do offer the lounge access benefit to add-on cardholders as well.

Consolidate Card Statement/Bill

The card issuer generates a single consolidated bill/statement for the primary and add-on credit card(s). The credit card statement includes all the primary and add-on credit cards transactions in the given statement cycle.

Benefits of Add-on Credit Cards

There can be many reasons to consider applying for an add-on credit card for your family members. Listed below are the benefits that you enjoy if you sign up for a supplementary credit card-

Zero or Minimal Membership Fee

Most card issuers in India including two of the largest card issuers- HDFC Bank and SBI Card, issue add-on credit cards for family members (spouse, children, parents, siblings) above the age of 18 free of charge. For this reason, having add-on credit cards for family members is more economical than each family member having a separate primary credit card, which usually incurs an annual membership fee.

Same Benefits at No Additional Cost

Except for a few exceptions like airport lounge access, add-on cardholders enjoy the same benefits as the primary cardholder. The reward rate for the primary and add-on credit cards is also the same.

Track the Spending on Add-on Credit Cards

Since transactions on the primary and all add-on credit cards are billed under a single statement, the primary cardholder can track the spends on add-on credit cards. This can be a useful feature for parents who want to keep tabs on their dependent children’s spending habits.

Limit the Spends on Add-on Credit Cards

Although the credit limit is shared amongst the primary cardholder and all add-on cardholders, the primary cardholder can set a limit on the maximum spends allowed on an add-on credit card in a given statement cycle. This feature allows the primary cardholder to have full control over add-on credit cards. Again, a useful feature for parents.

Credit Card Offers

All the credit card offers on the various online shopping portals and offline retail outlets are also applicable on add-on credit cards, thereby allowing add-on cardholders to also take advantage of the offers. In case of instant discount offers, add-on cardholders will also be able to purchase the item at the discounted price. As far as cashback or reward points offers are concerned, the cashback/reward points earned against the spending on the add-on card shall be credited to the primary credit card account.

Points to Keep in Mind

Although add-on credit cards offer many advantages, a few points must be considered before applying for one.

Billing

Since transactions on the primary and add-on credit cards are billed under a single consolidated statement, the primary cardholder is liable for all transactions made with the add-on credit cards.

Effect on Credit Score

Since add-on credit cards are linked with the primary credit card account, it is the responsibility of the primary cardholder to clear the dues on the add-on cards on time. Any default on payment shall reflect on the primary cardholder’s credit profile and impact their credit score.

Not a Credit Builder Card

Since an add-on credit card is issued against the primary cardholder’s credit line, it will have no impact on the add-on cardholder’s credit profile. Therefore, add-on cards are not useful for those who are ineligible for a primary credit card due to a poor credit profile and want to improve their credit score. To improve the credit score, one should consider a secured credit card.

Add-on Credit Card Fee

Most card issuers in India including big industry players like HDFC Bank, SBI Card, Axis Bank, and Kotak Mahindra Bank issue add-on credit cards to their cardholders free of cost. ICICI Bank charges a one-time add-on card fee of Rs. 250 on a few co-branded credit cards. American Express, on the other hand, issues 1 to 4 add-on credit cards (the number varies for different credit cards) free of cost, however a fee of Rs. 250 to Rs. 1,500 is applicable for additional supplementary credit cards.

Who Can Apply?

Immediate family members of the primary cardholder above the age of 18 can apply for an add-on credit card. Eligible family members include spouses, children (over 18), parents, parents-in-law, and siblings. It should be noted that the application for an add-on credit card must be submitted by the primary cardholder on behalf of the applicant.

How to Apply for an Add-on Credit Card?

The application procedure for applying for an add-on credit card is more or less the same for all card issuers. Most card issuers allow you to apply for an add-on credit card via net banking, by applying offline, or by calling the card issuer’s customer care number.

Documents Required to Apply for Add-on Credit Cards

Although no proof of income is required while applying for an add-on credit card (since add-on cards are issued against the credit line of the primary cardholder), you do need to submit the KYC documents of the add-on card applicant which include-

Proof of Identity- Aadhar Card, Voter ID Card, Driving license, PAN Card, Passport, Student ID Card, etc.
Proof of Address- Aadhar Card, Voter ID Card, Passport, Driving license, Electricity/Telephone/Gas/Water bill, LIC Premium receipt, etc.