If you wish to teach your kids the responsibilities that come along with financial independence, a student credit card is the best way to go about it. Credit cards are shaping the way we spend and manage our money. It seems only prudent to make your kids understand how they work and how they can affect your credit worthiness in the future.
While the concept of student credit cards is quite new in India, we suggest every student and parent to look into it. This article explains how to apply for student credit card, and which are the best credit cards for students in India.
What is a student credit card?
A student credit card, as the name suggests, is a credit card which is issued to a student who is 18 years of age or above 18 for managing their expenses in a responsible manner, without getting into a debt trap. It is customized for the needs of a student. Therefore, it has many reward points and special discounts on fuel, travel expenses, etc.
The student credit cards don’t have any special eligibility criteria other than age. Moreover, these cards attract lower interest rates than a regular card and have a validity of 5 years instead of 3 years for normal credit cards.
With a good credit history with the card, the student credit card can be easily updated to a regular credit card. Since it’s a student credit card, the application process doesn’t require the interested parties to show income proof for the documentation process.
Now that you understand what a student credit is, let’s also understand how to apply for student credit card and which banks in India offer student credit card?
How to apply for a student credit card?
Every bank has different criteria for student credit cards. And since it’s the latest entrant in the Indian market, only a few banks provide student credits cards. You must note that not all students are eligible to get a student credit card.
There are a few pre-requisites which need to be followed.
- To get a student credit card, you need to be 18 or above 18 years old.
- You need to be a full-time student at a college or institute and should hold the institution’s college ID card.
- For some banks, you should have an education loan with the bank to get a student credit card.
Documents required to apply for a student credit card
- Birth Certificate
- College ID
- Permanent address proof (can be your Aadhar Card, Driving license, Voter ID, etc.)
- PAN Card
- Passport size photograph
There are different ways to get credit cards for students with no income in India. But remember, the credit limit for most of the cards is Rs. 15000 only.
Ways to get a student credit card with no income
Read on to know a few ways to get credit cards for students with no income:
Against a Fixed deposit
Many banks offer secured credit cards to students against a fixed deposit in their name. Some of the credit card issuers only provide student credit cards against a collateral. Given that students have no income source, the issuer’s risk is high in this system.
Therefore, these banks require a fixed deposit as security to issue the card. Most of the times, your card’s limit will be equal to or lesser than the fixed deposit’s amount.
An add-on credit card
Many regular credit cards come with an add-on credit card. Students can ask their parents or elder siblings to open one for them. We will discuss about add-on cards further in the article.
Against a savings bank account
One can also get a student credit card against their savings bank account, given that the account maintains a specific balance specified by the bank.
To get the best credit cards for students, you need to check with the individual banks to understand their policy around student credit cards.
Benefits of using a student credit card
A student credit card can help students with zero income to build a credit score which might prove essential in future to get loans. Moreover, it teaches you to manage your finances well and responsibly to be prepared for a salaried individual.
More on add-on cards
An add-on card, as the name suggests, is a supplementary card issued with a regular card. It has very low limit. The add-on card uses the same limit as the primary credit card.
We hope now you know the method to get a free credit card for students in India. Get yours today!