January 16, 2025 · 11 mins read
Santosh Kumar
Nowadays, with the rapidly changing world, students use credit cards more commonly to fulfill their financial requirements. Access to credit cards for students without fixed deposits (FDs) is an unprecedented chance for young people to begin forming a good credit history, control spending, and even collect/redeem points/rewards.
This comprehensive guide explores everything you need to know about credit cards for students, including how they can apply for one, the advantages, the best cards available, and tips for responsible use. Please turn to learn how students can experience the advantages of credit cards without the purpose of an FD.
A credit card is a tool issued by banks or other financial institutions that allows the holder to borrow funds up to a certain credit limit for purchases or services. Unlike a debit card that uses your account balance, the credit card has a credit limit to spend on, repay, and borrow again. That's why credit cards are often helpful in budgeting for short-term needs. Credit cards are useful to students, for example, for purchasing purposes, covering education fees, emergency management, and developing a personal credit history that will be used to apply for loans in the future.
Credit cards offer students several benefits, some of which are crucial in their journey towards financial independence.
Building Credit History: A good credit history is the most important requirement while applying for loans and mortgages, not to mention a certain job. Students can also responsibly use a credit card to develop a credit score, which would be advantageous for better financial conditions later on.
Emergency fund: Any time a student stays off-campus, there are possible unexpected costs associated with a medical situation or paying for some type of unexpected travel. These things are very easily paid for on credit cards, so immediately afterwards, the balance is repaid in instalments.
Rewards and Discounts: Credit cards are disproportionately equipped with reward points, cashback, purchase discounts, etc. For students, rewards can be very good, with the possibility of money-saving or bonus benefits. . Cash Flow Management: Students can manage their monthly expenses more effectively. Credit cards enable practitioners to make payments in pieces rather than in cash.
Safety and Security: It is safer to carry a credit card than a lot of cash. In addition, credit card provides better fraud prevention than cash.
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Credit cards have historically been only issued to individuals holding a Fixed Deposit (FD) in the bank account. The FD served as a form of security, where in case the individual defaulted on repayment, the bank could recover the credit amount from the FD.
However, these days, most banks and financial institutions issue credit cards to every student holding an account with no FD. Rather, the other factors such as:
Income Proof (If Applicable): There are loan credit cards which may require proof of income, particularly, if the student worked part-time or has monthly allowance.
Co-signer/Guarantor: In various scenarios, banks can provide credit cards to students with or without a co-signer or guarantor. Usually, this would be a parent or legal guardian agreeing to write off the debt if the student cannot.
Student Status: Proof that an applicant is a current student of an accredited college or university is a necessity.
Age: Most banks have a minimum age prerequisite of 18 years old, but, in certain cases, credit cards may be issued to older students above the age of 21.
Bank Relationship: Because of a long-term relationship with a bank or has a savings account with the same bank, a person will have a greater probability of becoming a credit card applicant.
Many banks in India and abroad issue to students credit cards without FDs. Below is an overview of the different types of credit cards that are available for you to select:
Certain banks issue secured credit cards whose credit limit is a function of the amount of money invested in a bank account. Even though this requires an initial deposit it is not a standard FD where your money is locked up. You, in effect, are not granted the card initially as they will not give you a fullisable card with a deposit as a security for the credit limit.
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The set of cards is intended for students and is one of the most affordable versions available for young adults. Cards are available for students regardless of having an FD and are usually not very restrictive in the application process. These cards come with several features, such as:
Low Credit Limits: Student credit cards generally have a lower credit limit than the general-use credit cards. This allows students to both budget their spending and prevent going into debt.
No Income Proof Required: Most student credit cards do not require proof of income as long as the applicant is enrolled in an educational institution.
Rewards and Discounts: Student credit cards typically come with discounts on, among other features, dining, travel, and goods. There may also be cash back on the purchases and/or points as a reward that could be exchanged for gift cards and/or other rewards.
Minimal Fees: Fees (e.g., annual fees, late payment fees) are frequently waived or are kept to a very small amount to spur the use of the card responsibly.
If a student is unable to get a credit card on their own, they can apply for an add-on card. An add-on card is an extra card with the main cardholder's account (typically the parent's) associated with it. The primary cardholder is accountable for all charges made with the add-on card.
If you’re a student looking for a credit card without an FD requirement, here are some of the best options:
Eligibility: Students between the ages of 18-25 years with proof of admission in a university.
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1: 1,500 Reward Points as a welcome gift.
2: 1 reward point for every ₹150 spent.
3: Fuel surcharge waiver.
4: EMI options available for larger purchases.
Eligibility: Students older than 18 years with a valid student ID and proof of enrollment.
1: A lower credit limit for first-time users.
2: Interest-free credit period of up to 50 days.
3: Cash withdrawal facility from ATMs.
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Eligibility: Students aged between 18 and 25 years who are enrolled in an accredited institution.
1: A nominal annual fee.
2: Reward points on every purchase.
3: Special discounts on online shopping.
Eligibility: Here, it is not necessary to provide any income proof, and it has instant approval.
1: No annual fee for the first year.
2: Free add-on cards for family members.
3: Instant approval and card delivery.
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Below are a few procedures for applying for a student credit card.
Research Credit Cards: Look for credit cards specifically designed for students or those with minimal requirements.
Check Eligibility Criteria: Make sure that you satisfy student credit card eligibility criteria. They could be for instance age, student status and sometimes also a co-signer.
Submit Documents: Submit the required documents, i.e., certificate of enrollment, proof of identity, and proof of residence. If necessary, get a parent or guardian to co-sign the application.
Choose a Card: Considering the features that are most suitable for you (e.g., interest rates, fees, or rewards), choose a card and apply online or offline.
Approval and Activation: After your application is approved, the bank will mail you the card. Just follow the instructions to activate (power on) your card and begin to use it.
Credit cards are very valuable. However, they carry the obligation to use them responsibly. Here are some tips for students:
Pay on Time: Never miss a credit card payment and therefore miss on interest charges and late payment fees. Timely payments also help you build a good credit score.
Avoid Over-Spending: Maintain your credit limit and don't overspend what you can repay.
Track Your Spending: Maintain a spending record, using the mobile banking app or card statements.
Build Credit Gradually: Get into the habit of buying small items and paying for them in full every month to develop a good credit record.
Use the Reward Points: When a reward, use it to buy something useful, or cash it back if it's on offer.
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Credit cards for students with no FD [sic] are a great way to achieve financial independence, establish a credit history, and build spending habits. Due to the availability of various choices from various banks, students can choose from a card suitable for their requirements and habits. By using these cards responsibly, students can set the foundation for a bright financial future while enjoying the benefits and rewards that come with owning a credit card.
From the point of view of students, when applying for a credit card, students need to be properly informed of application conditions and daily spending behavior. Wise financial management is the core of using a credit card to its fullest potential and to preserve a good level of credit afterwards. Student credit cards without an FD provide financial independence, help to build credit, and offer rewards in a responsible way of spending money.
1. Are student credit cards different from regular credit cards?
Yes, student credit cards are targeted towards students with lower credit limits, fewer fees, and straightforward eligibility criteria. They usually have less benefits than standard credit cards, but constitute a good learning ground for students on financial management.
2. What is the typical credit limit for a student credit card without FD?
The credit limit of student credit cards is usually small, an amount of at least between ₹10,000 and ₹25,000, though this depends on the bank and student profile. This is created to avoid students going to big loans.
3. Is a parent allowed to be a co-signer on a student's credit card?
Yes, a parent or guardian can take on the role of co-signer or guarantor when applying for a student credit card. It is the parent’s responsibility to pay back the debt should the student fail to do so.
4. Do student credit cards come with any benefits or rewards?
Yes, a range of student credit cards come with cash back, discount and reward points on purchases. These rewards can be cashed out for future purchases or other concessions, depending on the card provider.
5. Is it possible for a part-time student to apply for a credit card?
Yes, if the student works part-time and maintains a stable income, credit card application is possible. In these situations, they might have to produce proof of income as well as a copy of a student ID and proof of enrollment.
6. Can students apply for international credit cards without FD?
Right, some banks provide to international students credit cards without requiring an FD. These cards allow students to make international transactions and may offer additional benefits like travel rewards, though eligibility requirements may vary based on the student’s financial background and bank relationships.
7. What does it do to a student's credit score when they use a credit card?
A credit card can positively impact a student’s credit score if used responsibly. Timely payments, maintaining a low balance, and avoiding maxing out the credit limit are key factors in building a good credit score.
8. Can a student improve their credit limit over time?
Yes, with appropriate use, by grade level, a student could eventually qualify for an increase in credit limits. This often requires a solid history of timely payments and low credit utilisation, demonstrating to the bank that the student is capable of managing higher credit limits.
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