The transaction value processed through credit cards in FY 2018-19 amounted to Rs.6 lakh crore, demonstrating a 30% increase over FY 2017-18. Such an increase in usage of credit cards can be attributed to the variety of such cards available in the market, each catering to a specific demographic in the country. For example, student credit cards are vastly popular among individuals pursuing higher education in the country or overseas, as it boosts savings rate through substantial reward points on each transaction.
Nonetheless, before you go ahead with a student credit card apply, several parameters should be considered, as it can affect your current financial standing as well as your future credit score.
Student card apply – Essential points to note
Eligibility criteria
Most financial institutions offering student credit cards require applicants to be over 18 years of age and enrolled at a registered educational institution for higher studies.
Multiple types of student credit cards
Student cards offered are usually add on credit cards or are provided against fixed deposits. If your parents have a credit card, you can avail an add-on credit card from the same financial institution. Alternatively, individuals can also avail a credit card against fixed deposits with a credit limit equivalent to the funds available in the deposit. Such student credit cards are often associated with a validity period.
Student credit cards usually come with such clauses as applicant individuals don’t have a regular a source of income, and hence repayment of credit card bills might cause significant financial stress. Individuals can use a credit card wisely to ensure no unnecessary financial burden, through reasonable purchases and EMI facility for repayment.
Extensive reward points are applicable for specific spending
Rewards point regime on student credit cards is designed to cater to specific financial requirements which a student might have, to ensure maximum savings through discounts and cash backs. Individuals can use such cards to pay for all expenses such as lodging, stationary, travel charges, etc.
You can redeem your credit card reward points to avail discounts on future purchases, cash backs, vouchers, or avail a reduced monthly statement.
Know about the associated charges and credit limit
As such cardholders don’t have any stable source of income to ensure timely repayment of all purchases, credit limit associated with such cards are usually nominal. This is done to ensure you can repay your credit card debt on time.
In the case of add-on cards, the CIBIL score of your parent will also affect your approved credit limit.
Standard credit card rules and regulations related to associated charges are applicable on such cards, wherein joining fees, annual maintenance expenses, and interest rate (in case of outstanding bills) are levied.
Alternatively, individuals can also opt for standard unsecured credit cards, which come with a wider range of benefits starting from a higher credit limit and better reward points on transactions and purchases. Bajaj Finserv offers the Bajaj Finserv RBL Bank SuperCard, which provides extensive benefits such as cash withdrawal and personal loans at no additional charges.
Like standard credit cards, properly managing student credit cards can also have a positive effect on your CIBIL score, which, in turn, affects future approval of credit-based products. Developing a good CIBIL score while pursuing higher studies through a student card apply can be beneficial for you not just to meet your current expenses but also for future usage.
