Why a student credit card is a good option for young people

5 MinsAug 26, 2021

Amrita Sondhi, 21, wants to become a lawyer. Her family is based in Jalandhar, Punjab, where her father, Jasbir Singh, runs a sports goods manufacturing enterprise. Amrita has got admission into a prestigious law school near Delhi and has decided to stay with her aunt for the course duration. Since she will be staying away from her parents, her father insists that she also get a credit card issued in her name. “It will teach you to spend responsibly,” he tells his daughter.

student credit card


All these years, Amrita’s needs have been taken care of by her parents. Whenever she has wanted anything – books, clothes, electronic gadgets – they would buy it for her. She is, therefore, a little apprehensive about holding a credit card in her name. She feels her expenses are not huge enough that she would need a credit card.

Let’s see what the features of a student credit card are and how it can help Amrita.

Types

Student Credit Cards come in three variants. Some banks issue credit cards to those students who have availed of education loans from them. Others give it as an add-on card, typically linked to a family member’s credit card. The third variant is a credit card backed by a Fixed Deposit.

Documentation

Documentation for a student credit card is far simpler than that required for a regular credit card. Since students are not expected to have any independent earnings, they need not provide income proof. Such cards are issued based on education loan approval or the primary cardholder's credit history in case of an add-on card) or holding an FD with the bank. The usual Know Your Customer (KYC) documents are required, and the student must be above 18 years of age.

Credit Limit

Most student credit cards have a small credit limit of about Rs. 15,000 and are valid for five years (The rationale behind the limited tenure being that during this period, the student may have finished her course and got a job, in which case, she becomes eligible for a regular card). In the case of 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.

[Also Read: Checklist To Look At When You Choose Your Credit Card]

Features and Benefits

A student credit card entitles the holder to numerous benefits. Amrita will be able to avail of cash backs, discounts and deals that the bank offers. Some banks even provide cashback on refuelling vehicles, which could be helpful to Amrita since she plans to use her two-wheeler for commuting to college. Besides, she will earn reward points that can be redeemed for attractive offers (depending on the bank's tie-ups) ranging from discounts in restaurants to apparel, cosmetics, costume jewellery and entertainment options.

She could use her credit card for shopping online and offline and will not have to worry about carrying large amounts of cash in an unfamiliar city. What's more, she can also withdraw money from a nationwide network of ATMs. However, Amrita should make such withdrawals only in emergencies since they carry a steep interest rate.

Her father explained the last – and perhaps the most vital benefit. “You are a young lady stepping into the world. It is time you learnt to take financial responsibility. Using a credit card in an appropriate manner would be the first step towards that,” he told his daughter.

Axis Bank offers a range of credit cards with various benefits tailored to its customers' preferences. Customers are also entitled to Edge Reward points depending on their spending patterns. You can redeem them for a range of attractive deals and offers.

To know more about Axis Bank Credit Cards, click here.

Disclaimer: The Source, a Mumbai-based content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.