Credit Cards: What are add-on cards and their advantages? | Mint

Do you have a grown-up daughter or a son who is studying in a different city and managing her own expenses? If she is not an earning member of your family, then the chances are that she is not eligible to apply for a credit card. And of course, you would not risk handing over your debit card to her. Then what is the alternative?

To address this very problem, banks typically give an option of an add-on credit card, which is linked to the main credit card held by another family member.

The primary credit card’s credit limit also includes the add-on card’s limit.

An add-on credit card is a supplementary credit card issued under the primary cardholder’s account. It is linked to the same credit limit and billing account as the primary card. Add-on cards are usually offered by credit card issuers to allow family members or dependents to access the same account.

Key features

1. The credit limit of an add-on card is shared with the main cardholder’s account. The combined spending of all cards (primary as well as add-on) cannot cross this limit.

2. Transactions made using the add-on card reflect on the primary cardholder’s statement. This means, all the payments are consolidated.

Eligibility

1. Add-on cards are issued to close family members, such as children or partner.

2. The minimum age requirement for add-on cardholders may vary from bank to bank. Typically, some issuers allow cards for individuals as young as 18.

Why should you consider an add-on credit card?

1. For a child: One of the key purposes is to help family members such as child staying in a different city or manage his expenses while keeping control over spending.

2. Maximise rewards: Another reason could be to maximise benefits or rewards from a credit card by pooling expenses.

3. Financial flexibility: Besides this, an add-on card give financial flexibility to a family member who may not qualify for his/her own card.

Advantages

I. In an add-on card, primary cardholders can monitor spending and often set individual spending limits for each add-on card.

II. Since notifications are sent for transactions made via add-on card, this can help the primary card holder manage expenses effectively.

III. Add-on cards usually provide the same rewards and benefits (such as cashback and points) as the primary card, thus enabling you to make the most of the rewards offered to you.

Only the primary cardholder is responsible for the payments on both the primary and add-on cards. For obvious reasons, add-on cardholder does not build his/her own credit history since the account is not in their name.