Student credit cards: Which are the best cards with no annual fee? Check details | Mint

If you are a student, then being unemployed and not having a credit history may come in your way of getting a credit card. There is, however, a way to procure one. Broadly, there are two options for a student to get a credit card: the first is to get an add-on card to a primary credit card held by a parent, and the second is to get a credit card against a fixed deposit (FD) account.

Most banks offer these credit cards, and interestingly, these cards have no joining fees. Let us understand more about this here:

Student credit card offers a range of benefits. These include:

A. Building credit score: This helps you build a good credit score which is vital to procuring a loan later on.

B. Reward points: Most student credit cards help you earn reward points with every purchase. These points can be redeemed for cash, vouchers and air miles.

C. Emergency financial backup: This also gives credit card holders a financial backup during emergencies.

Types of student credit cards

There are two ways in which student credit cards are given. One is a supplementary card issued to a primary credit cardholder. It allows the sharing of most benefits of the primary card without the need for a separate joining fee or annual fees. 

This can be provided by parents as financial convenience to children and it is handy for times when they need to handle expenses on their own. The second option is to give a credit card against fixed deposits (FD).

Credit card against fixed deposit

Some banks offer credit cards against fixed deposit accounts. The credit limit for such cards is usually a percentage of the funds in the FD (90 per cent of the FD amount).

Eligibility: Usually, the only credit card eligibility for students is their age since they don’t have a monthly income or a credit score. The minimum age to obtain a credit card is 18 years, but it may vary from bank to bank.

The documents required for a valid student credit card are a valid ID, address proof, a passport size photograph and other documents required by the bank.

Some of the credit cards offered for students:

IDFC First Bank Wow Credit Card: IDFC First Bank offers FD-backed assured credit cards. This requires no credit history and income proof. The minimum age criteria to apply for this credit card is 18 years. These cards have features like No Forex conversion fee, 4X Reward Points on spends and an ATM cash withdrawal limit of 100 per cent of the FD value.

ICICI Bank student credit card: ICICI Bank gives the option of taking a student credit card against a fixed deposit (FD) guarantee and an add-on card. The FD should be of a minimum value of ₹50,000. A Student Credit Card generally comes with no joining or annual fees, reveals ICICI Bank website.

Axis Bank student credit card: Axis Bank also offers credit cards with no proof of income, i.e., credit cards for students. The documentation for a student credit card is far simpler than that required for a regular credit card. 

These cards are issued based on education loan approval, primarily the cardholder’s credit history and on the basis of FD held with the bank. Additionally, only the KYC documents are required and age-proof documents that show the student is above 18 years of age.

Most student credit cards have a small credit limit of ₹15,000 and are valid for five years. And when it is an add-on card, the credit limit is linked to that of the primary card and in an FD-backed card it is related to the amount of the FD.

Kotak Mahindra student credit card: These cards are offered with zero annual fees, interest-free cash withdrawals and 2X rewards. These cards are known as 811 #DreamDifferent Credit Card. This can be set up through a fixed deposit at Kotak Bank and can be operated at zero annual fee.

This helps them get a credit card even while they are not earning. The credit limit is up to 90 per cent of the fixed deposit amount and is known upfront at the time of application. The high credit limit is up to ₹16 lakh.

Student credit cards issued by state governments

West Bengal Student Credit Card Scheme: Under this scheme, students from the state of West Bengal can pursue secondary, higher secondary, undergraduate, graduate and professional degree courses from an affiliated institute.

The scheme is also available for students studying in coaching institutions for various competitive examinations in civil services, engineering, and medicine, among other fields.

Bihar Student Credit Card Yojana: Under the Bihar Student Credit Card Scheme, students who stay in Bihar can get an education loan of ₹4 lakh at 4 per cent interest. For students with disability, female students and transgender students, interest is only 1 per cent.

A student who wishes to pursue an undergraduate degree can apply for this scheme. The scheme is valid for students who reside in Bihar and are under 25 years of age. They should have completed their higher secondary education or secondary education in the case of a polytechnic diploma.