Credit cards are one of the most useful financial tools as you not only get an interest-free brief period 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.
|Table of Contents|
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 share the credit limit with the primary and other add-on cards (in case more than one add-on credit cards are 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 credit limit of the card 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, primary cardholder can however limit the monthly spends on the add-on card.
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.
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 Credit Card, 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 transactions on the primary and all add-on credit cards 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 Spends 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 full control by the primary cardholder on 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 spends 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, there are a few points that one must keep in mind before applying for an add-on credit card.
Since transactions on the primary and add-on credit cards are billed under a single consolidated statement, the liability of all the transactions made with the add-on credit cards lies with the primary cardholder.
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 credit line of the primary cardholder, it will have no impact on the credit profile of the add-on cardholder. 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 absolutely 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 (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 spouse, 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 of 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 submitting an application 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.
Spends on the primary credit card and all add-on cards are billed under a single consolidated statement (no separate statement is generated for add-on credit cards). Therefore, your credit score will definitely be impacted by any default on the payment of the dues on the card statement (which includes transactions on add-on cards as well).
The default credit limit of the add-on credit card is the same as that of the primary credit card, which is shared amongst the primary and all add-on cardholders. The primary cardholder can however decrease the credit limit on any of the add-on credit cards.
No, only adults (over the age of 18) are eligible for an add-on credit card.
Yes, you can withdraw cash from ATMs with your add-on credit card. The same cash advance charge, as applicable on the primary credit card, will also be applicable on the add-on credit card.
No, you need not submit any proof of income while applying for an add-on credit as add-on cards are issued against the credit line of the primary cardholder. However, KYC documents (address proof and ID proof) of the add-on card applicants need to be submitted to the card issuer.
Yes, you will earn Reward Points/cashback on spends on add-on credit cards. The reward rate applicable to add-on credit cards is the same as that for the primary credit card. The Reward Points/cashback earned on the add-on credit cards are credited to the primary credit card account.