Looking For Add-on Credit Card? Know What Liability Of Repayment On Primary Cardholder Means

Add-on credit cards are basically supplementary credit cards that are issued against a primary credit card

New Delhi: Are you among those looking to apply for add-on credit cards? If yes, then you should be aware of the master directions issued by the central bank regarding the issuance of credit and debit cards. The directions were issued on April 21.

The new directions on credit cards clarified that add-on credit cards must be issued with a clear understanding that the liability will be that of the principal or the primary cardholder.

What are add-on credit cards?

Add-on credit cards are basically supplementary credit cards that are issued against a primary credit card. For instance, there is someone in your family who is not eligible to avail a credit card, then there is the option to apply for an add-on card in the name of that family member.

Also, note that the overall credit limit remains the same for the primary and the add-on card put together. It means that holder of the add-on credit card will share the credit limit with the primary cardholder. Remember, there will not be any extra credit limit on his card.

In fact, a single consolidated credit card statement including the transactions made on the add-on card will be issued to the primary cardholder. Such a consolidated statement will show all the payments, purchases and other credit and debit transactions besides the details of reward points earned on the primary and add-on card.

What’s the liability of payment in add-on cards?

Remember that the primary cardholder will be solely responsible for the payment of dues incurred on the add-on card. In case of an unpaid balance on the add-on card, the charges incurred for the same will get reflected in the primary cardholder’s statement. This will also directly affect his/her credit score.

Therefore card users should use the card with discipline and ensure that all dues are cleared on time to avoid charges.

Normally, the add-on credit cards can be availed free of cost. Card issuers such as SBI Card and ICICI Bank offer supplementary card without any additional fee. But remember that charges including cash advance fees, over-limit charges, late payment charges and others will continue to be applicable.

Fees and charges on add-on credit cards vary from one issuer to another; card users must check the applicable charges before applying for an add-on card.