Add-on credit cards: What are they, their benefits and how to get them? | Mint

Credit cards offer numerous benefits to users. However, not everyone can get them. For example, students, homemakers, senior citizens, etc., without any income source and credit score, will find it difficult to get credit cards. At the same time, they would not like to miss out on the credit card benefits. In such a scenario, add-on credit cards can help these people if someone in the family already holds a credit card. In this article, we will understand what add-on credit cards are, how they work, what their benefits are, and how to apply for them.

What are add-on credit cards?

An add-on credit card is a supplementary card issued to a family member based on a primary credit card already held by someone in their family. For example, Rajesh is a 50-year-old individual working as a Vice President in an IT company in Bengaluru. He holds an HDFC Bank credit card. Rajesh’s daughter Varsha is pursuing her MBA in IIM, Ahmedabad. As Varsha is a student, she doesn’t have an income source and a credit score. In this case, Varsha can be issued an add-on card based on the credit card held by her father.

The credit card held by Rajesh is the primary credit card. The other credit cards issued based on the primary credit card are known as add-on cards or secondary cards or supplementary cards. Based on his primary credit card, Rajesh can apply for add-on cards for his children, spouse, parents, etc., if they are not eligible for a primary credit card on their own. All add-on cards are linked to the primary credit card.

How do add-on cards work?

The features and benefits of an add-on card are similar to that of the primary card. The add-on cardholder can use the card for various spends online and offline. All the spends on add-on cards are added to the primary card. The primary cardholder gets a single consolidated bill at the end of the billing cycle. That way, the primary cardholder can keep a tab on the spends done on the add-on card(s). The primary cardholder has to pay the entire bill, which includes expenses done on add-on card(s).

There is no separate credit limit on add-on cards. It works on a pooled concept wherein the primary and add-on cards share a common credit limit.

Application of add-on cards

The number of add-on cards issued against a primary card will vary amongst banks. Most banks issue up to 2 to 3 add-on cards. Some banks may issue more than three add-on cards. The add-on card application can be made when applying for the primary card or any time later. Similarly, the primary cardholder can cancel the add-on card(s) anytime.

You can apply for an add-on card by filling out the application form in net banking or the bank’s mobile application. The other option is to visit the bank branch and submit a duly filled physical copy of the add-on application form. The add-on card applicant must meet the eligibility criteria like age, etc. The applicant must submit a copy of their photograph and KYC documents along with the application form.

Banks give add-on cards to the primary cardholder’s immediate family members only. These can include spouse, children, parents, siblings, etc. The age of the add-on card applicant must satisfy the minimum age criteria, which is usually 18 years and above.

What are the benefits of an add-on card?

With an add-on card, the primary cardholder can give financial freedom to their family members within the set limits. For example, in the earlier example, we saw how Rajesh, who is staying in Bengaluru, can give an add-on card to his daughter Varsha, who is studying in Ahmedabad.

Varsha will be free to put her regular spends on the add-on card. Rajesh can monitor Varsha’s spends and pay the bill at the end of the billing cycle. By providing add-on cards with suitable limits to your family members, you can avoid the need to give cash or do online fund transfers to their bank accounts.

The eligible spends on an add-on card earn regular reward points as well and accelerated reward points (if any), similar to the primary card. The eligible spends on an add-on card also count towards benefits like milestone spends, unlocking lounge access, reversal/waiver of annual fee, etc. If there are any limits or exclusions on earning reward points on specified categories applicable to the primary card, the same will apply to add-on card(s).

Some banks provide benefits like lounge access to add-on cardholders. For example, HDFC Bank provides unlimited complimentary airport lounge access to Diners Club Black (DCB) and Infinia primary and add-on cardholders.

How to manage add-on card(s)?

The primary cardholder can disable or set limits on various channels on add-on cards. For example, the primary cardholder can disable international transactions on-add cards. They can set limits on offline and online domestic transactions for add-on cards.

The primary cardholder is responsible for paying the monthly bill, which includes the spends done using the primary and add-on card(s). If the payment is not made before or by the due date, the primary cardholder’s credit score will take a hit.

Should you take add-on card(s)?

With add-on cards, you can provide your family members the flexibility of owning a credit card. They will have the freedom to use the card as they desire. But, at the same time, you can keep track of the spends and even disable or set limits on certain usage channels. Do you have any family members who will benefit by using a card, but are not eligible for it? If yes, you can leverage your primary card to get add-on cards for them, and thus provide them the convenience of owning a card.

While the family members can enjoy using their own cards, you can manage things centrally and simplify financial management within the family. Thus, you can extend the benefits of your primary credit card to your family members through add-on cards.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.