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A supplementary credit card, also termed as an add-on card, is an additional card issued under an existing credit card account. The supplementary cardholder enjoys more or less the same privileges that the principal cardholder is entitled to. Supplementary cards come with scores of advantages, especially for family members, and the number of supplementary cards that can be applied for varies from one bank to another. In most cases, banks allow for one or two supplementary cards under an existing account.
As far as credit limits for supplementary cards are concerned, in most cases, the limit is lesser than that enjoyed by the primary cardholder. Supplementary cards are also charged an annual fee but the fees is usually half the principal card fee. In some cases, banks do not charge an annual fee on supplementary cards. Let us take a look at some advantages that supplementary cards have to offer.
Expenditure on Supplementary cards can be tracked easily:
All purchases made by family members using the supplementary card issued to them can be tracked with ease. The transactions performed using supplementary cards are documented in the same statement as that of the principal card. This way, expenditure can be planned more systematically and effectively.
A feature that perhaps stands out with respect to supplementary cards is the independence that family members enjoy. For instance, if you’ve applied for a supplementary card to be issued to your parents or spouse, they can use the card for purchases without procedural authorisation. As long as the credit limit isn’t exceeded and usage is planned, supplementary cardholders can enjoy complete freedom.
Say you are a principal cardmember and your credit card allows you to enjoy a wide range of exciting offers and discounts in the form of cashbacks, rebates and reward points. An impressive feature of supplementary cards is that the same features and benefits can be earned and enjoyed with every swipe. So, every time your family member swipes their card, they get the opportunity to earn reward points or cashbacks applicable to the card. Moreover, as all these points or cashbacks are earned under a single credit account, you as a principal cardholder can earn extra reward points through purchases made using the supplementary card.
Credit cards can be used to make cash withdrawals at ATMs and attract a certain percentage of interest. Typically, cash advances are charged a cash advance handling fee of 5% or 6% of the amount withdrawn and an interest charge of about 28% p.a. Interest charges are levied on an everyday basis at a compounding rate until the entire amount is repaid in full. As for supplementary cards, they can be used to make cash withdrawals as well. The interest charges and cash advance handling charges are the same as those applicable to the principal card.
As a primary cardholder, you can monitor the spending behaviour of your children if they’ve been issued a supplementary card by you. Thus, with an enhanced degree of transparency, you can, at all times, keep a tab on the expenses incurred on your credit account.
There might be times when your dependents aren’t really aware about how to use/manage credit before they’ve been issued a supplementary credit card. By giving them one, you can help them learn how to use and manage credit in a prudent and effective way. This way, if they are to hold a credit account in their name, it’ll be easier for them to manage their credit more efficiently.
Thus, issuing your family member(s) supplementary cards comes with an array of benefits, provided they’re well educated about the ways of credit usage and the risks associated with overspending and mishandling of credit. At the end of the day, as a principal cardholder, the onus is upon you to ensure that your dependents do not go out of line in handling credit. If used effectively, supplementary cards can certainly be a boon as far as accumulating reward points, rebates, cashbacks and discounts are concerned.