Student Credit Cards Gaining Popularity In India
Credit Cards were earlier available to successful professionals drawing fat salaries. Student credit cards are now being much more widely offered across India. Globalization and the growth in economy has led to bank to reconsider their financial strategies and today you can see banks offering credit cards to a diverse range of customers belonging to different economic strata, though the general rule for credit card is that the applicant needs to have some income.
This, however, does not apply to Student credit cards offered by different banks. Student credit cards are customized versions of credit cards that allow students to avail different benefits on their spending. Let’s take a look at the financial aspects and eligibility of student credit card.
Important aspects of Student Credit Card
Student credit card is issued with fewer formalities and less paperwork. To get a student credit card, the applicant need to be 18 years or older. The credit card has a validity of 5 years and there is no income based eligibility for the card. Most student credit cards also have low interest rates.
Credit Card options for students
Against fixed deposits
The easiest way of getting a student credit card is against fixed deposits. Students need to open a fixed deposit account with the bank and then apply for a credit card. Banks are more inclined to offer such credit cards and the credit limit of such cards is around 90% of the fixed deposit amount. The interest rate on such student credit is lower than the traditional credit cards, and the repayment and other terms are also much simpler.
Students can get credit cards for their own use if their parents have credit cards. Such credit cards are also known as add-on cards. For an add-on credit card, the responsibility of repayment lies with the person holding the parent credit card. However, the add-on card can be used just like any other credit card.
Pros and Cons of Student Credit Card
Student credit card gives the student freedom from carrying paper money. It also gives them a sense of financial security in case of an emergency and a peace of mind that they have a financial resource to cover expenses related to books and other educational expenses. The reward points and cashback help them save money while repayment helps them understand finer nuances of finances and prepares them for the future. One of the disadvantage of student credit card is sometimes they the holder, because of lack of financial maturity, may go overboard with their purchase. This can result in late payments, which in turn can blotch the credit score.
Two Popular student credit card schemes
SBI Student Plus Advantage Card
It is an exclusive credit card given only to those applicants who are availing an education loan from the State Bank of India. You can also get this credit card against a fixed deposit at any SBI branch. There is no joining fee, but the annual fee is INR 500 that you need to pay from second year onwards, but only if the total purchase amount on the card in the year gone by is less than 35,000. You get 1 reward point on every 100 rupees spent and you get a 2.5% fuel surcharge waiver for fuel purchases between Rs. 500- Rs. 3,000.
ICICI Bank Instant Platinum Credit Card
You can get this credit card against a fixed deposit of 20,000 or more. Some of the financial privileges that you get with this card are:
- 3 Payback points for every 100 Rs spent
- Zero Annual Fee
- 2.5% fuel surcharge waiver
- 15% saving on dining at selected 800 leading restaurants
- Rs. 100 Off on movie tickets booked through bookmyshow.com two times a month