What is add-on credit card – how to manage it

As the term “add-on” suggests, its issued as a supplementary card to the dependents of original card holder which includes parents, spouse or children.

Being a husband you can ask your bank to issue an add-on credit card to your wife for your groceries and other expenses. It comes with a very basic fee, which varies between Rs 150 to Rs 1000. Some banks are also offering it for free i.e. without any charges.

Depending on your original credit card, expenses incurred on your add-on card are billed to the primary holder’s billing address for payment. It’s the responsibility of the original card holder to make payment before the due date.

Features of Add-on card

What is an add-on credit card – how to manage itCredit limit of your original credit card gets divided between your main and add-on by which both will be in your manageable credit limit.

Banks are also helping you to fix the credit limit for your add-on card. If you want your spouse to use it for groceries and do not want the expenses to go above the limit of Rs10000 then you can set the maximum limit to be spent on it as Rs 10000. The primary owner can get issued 3 to 5 add-on cards based on his requirements.

On the statement date, you will receive a comprehensive bill including details of your add-on card to help you in managing your budget for the next month. To be within the budget, you can also strike out your unnecessary expenses for future.

Reward points, discounts and all other offers that are applicable to the original or primary card will also be applicable to the add-on.

Impact on your credit score

What is an add-on credit card – how to manage itBefore approving your loan, bankers will first have a look on your Credit scores. Credit scores are maintained by independent credit agencies like CIBIL.

Your score will be determined based on your financial credit history that banks are maintaining with credit agencies like CIBIL. If you are a defaulter of a loan or not paid your credit card bill then bank may report it to these agencies by which your credit score will get affected.

It’s the responsibility of primary owner to make payments for both primary and add-on. In case of default on payment of add-on card, bank will report it to credit agencies.

This will be reflected on both primary and add-on card holder’s credit score i.e. being an add-on card holder, if the primary owner did not make payments then your credit score will also get affected.

How to manage your add-on card

We suggest you to put a sub limit to your add-on card and then keep track of your purchases that are made by using it. Registering for SMS alerts to your mobile phone will be a great help to keep your expenses within limit. Do not issue it to a person who cannot manage their credit responsibly.

Some banks are charging fee while issuing you an add-on card in addition to annual fee. You can negotiate with these banks for a waiver of such fees.

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