Sometimes, getting a credit card for a family member may prove challenging. Each card has its own eligibility criteria in terms of income and credit history. The lack of regular income or the absence of a borrowing history could lead to a credit card applicant being turned away. Fortunately, there is a simple workaround that allows your family members to develop credit lines: you could simply extend your own credit line to them through an add-on credit card.
What Are Add-On Cards?
Using your exiting credit card account, you may provide your family supplementary credit cards mapped to your primary card account. The supplementary cards carry the benefits of the primary card as well as its spending limit. In the absence of a sub-limit on the spending, the add-on card will have 100% of the spending limit of the primary card. In some cases, the most exclusive benefits may be restricted to the primary card holder. However, the supplementary card holder would be able to carry out regular transactions – both online and offline – with the add-on card.
Who Can Get Add-on Card?
Immediate family members of the primary credit card holder may be able to procure the add-on card. These immediate family members would be spouse, children, siblings, parents, and parents-in-law. Most card companies allow between 2 and 5 add-on cards. The actual eligibility and rules will vary from one card company to another.
Features, Billing & Annual Fees
Multiple add-on cards don’t result in multiple statements. All the charges carried on the add-on cards are mapped to the primary card, whose statement summarises the activities on all add-ons. This helps cut down the overall credit card maintenance costs in a family. Also, all members can share the card’s provided rewards, offers and benefits. For example, the airport lounge access may be shared between the primary and add-on users. Reward points earned through the add-ons are also vested with the primary account. The primary card holder can control the family’s spends by setting sub-limits on the add-on cards. The add-on cards typically carry no additional annual fee or a fee which is less than that on the primary card. Despite this, the add-on users have their own, limited financial independence to transact as per their convenience.
Effects On Credit Score
Since transactions on add-on cards are mapped to the primary card, the onus of tracking and clearing the dues lies on the primary card holder. If the primary card holder doesn’t clear the dues on time, the debt will rack up and the applicable interest rate will be charged, along with any late payment penalties for not making the minimum payments. Unpaid card dues will then impact his credit score, which will make it difficult to obtain new loans or credit cards in the future. Therefore, the primary user must instruct and advise the add-on users about responsible usage of their cards in order to maximise rewards and minimise costs.
How To Get Them
There are multiple ways to get an add-on card on your credit card account. You must get in touch with your bank either at the branch or on the phone to place the request. Submit the add-on application form along with the required KYC documents and photograph of the add-on users, and get the card in a few days.
The writer is CEO, BankBazaar.com