What is a supplementary credit card?

A supplementary credit card, also known as an additional or authorised user card, is an extension of a primary credit card account. It allows another person, typically a family member, to access the credit limit and benefits of the primary cardholder’s account. This blog will explore the features, benefits, and considerations of supplementary credit cards, and answer common questions about their usage.

Apply for your new Airtel Axis Bank Credit Card by Airtel Finance from the Airtel Thanks app today! Get benefits such as low joining fees, low interest rates, relaxed eligibility criteria and much more.

Understanding Supplementary Credit Cards

Definition and Purpose

A supplementary credit card is issued under the primary cardholder’s account, allowing the supplementary cardholder to make purchases and use the credit limit assigned to the main account. The primary cardholder remains responsible for all charges made by both their own card and the supplementary card(s).

Eligibility

Supplementary credit cards are usually issued to close family members, such as spouses, children, or parents. The primary cardholder must authorise the issuance of the supplementary card, and the supplementary cardholder must meet certain eligibility criteria set by the credit card issuer.

Read more: How to get a credit card without a CIBIL score

How Supplementary Credit Cards Work

Application Process

To obtain a supplementary credit card, the primary cardholder must apply through their credit card issuer. The application typically requires information about the supplementary cardholder, such as their name, date of birth, and relationship to the primary cardholder.

Credit Limit

The supplementary card shares the credit limit with the primary card. For example, if the primary card has a credit limit of $5,000, the combined spending of both the primary and supplementary cardholders cannot exceed this limit.

Billing and Payments

All transactions made with the supplementary card appear on the primary cardholder’s statement. The primary cardholder is responsible for making payments on the entire account balance, including charges made by the supplementary cardholder.

Read more: How long does it take to improve your credit score?

Benefits of Supplementary Credit Cards

Convenience

Supplementary credit cards provide convenience for families, allowing multiple members to make purchases without needing separate credit card accounts. This is especially useful for managing household expenses and ensuring that all family members have access to credit when needed.

Reward Sharing

Any rewards earned from purchases made with the supplementary card, such as cashback, points, or miles, accumulate in the primary cardholder’s account. This allows families to pool their spending and maximise their reward earnings.

Building Credit History

For individuals who may not qualify for their own credit card, such as students or young adults, being a supplementary cardholder can help build their credit history. Responsible use of the supplementary card can positively impact their credit score, making it easier to qualify for their own credit card in the future.

Financial Control

Primary cardholders can monitor the spending of supplementary cardholders, providing a level of financial control. Some credit card issuers offer features to set spending limits on supplementary cards, helping manage the overall account balance and prevent overspending.

Read more: How to improve your credit score – complete guide

Considerations and Risks

Responsibility for Debt

The primary cardholder is ultimately responsible for all charges made on the account, including those made by the supplementary cardholder. If the supplementary cardholder overspends or incurs debt, it is the primary cardholder’s responsibility to pay off the balance.

Impact on Credit Score

While supplementary cards can help build credit history for the supplementary cardholder, they can also affect the primary cardholder’s credit score. High spending or missed payments on the supplementary card can negatively impact the primary cardholder’s credit score.

Communication and Trust

Trust and communication are crucial when sharing a credit card account. The primary cardholder must trust the supplementary cardholder to use the card responsibly, and both parties should communicate regularly about spending and payments to avoid misunderstandings and financial stress.

Fees

Some credit card issuers charge additional fees for issuing supplementary cards. It’s important to review the terms and conditions of the primary card to understand any potential costs associated with supplementary cards.

FAQs About Supplementary Credit Cards

Q1: Can a supplementary cardholder make payments on the account?

Yes, a supplementary cardholder can make payments on the account, but the primary cardholder remains ultimately responsible for ensuring the balance is paid.

Q2: Will a supplementary cardholder’s credit score be affected by the primary cardholder’s credit behaviour?

Yes, a supplementary cardholder’s credit score can be impacted by the primary cardholder’s credit behaviour. Late payments or high balances on the primary card can affect both the primary and supplementary cardholder’s credit scores.

Q3: Can a supplementary cardholder have a different spending limit?

Some credit card issuers allow the primary cardholder to set different spending limits for supplementary cards. This can help manage the overall account balance and prevent overspending.

Q4: How can I remove a supplementary cardholder from my account?

To remove a supplementary cardholder, the primary cardholder should contact their credit card issuer. The issuer will typically require verification and may process the removal within a few business days.

Q5: Do supplementary cardholders receive the same benefits as primary cardholders?

Yes, supplementary cardholders generally receive the same benefits as primary cardholders, such as access to rewards programs, travel insurance, and purchase protection. However, certain benefits may be exclusive to the primary cardholder.

Conclusion

Supplementary credit cards offer convenience, reward sharing, and the potential to build credit history for additional users. However, they also come with responsibilities and risks, particularly for the primary cardholder who is accountable for all charges on the account. Understanding how supplementary cards work, the benefits they offer, and the considerations involved can help you make informed decisions about managing shared credit card accounts effectively.