September 3, 2024 · 11 mins read
How Students with No Income Can Get a Credit Card: Insider Tips
Santosh Kumar
A credit card represents financial responsibility and independence in today's evolving financial world. For Indian students without a reliable source of income, getting a credit card may seem like an unattainable goal. However, this desire is attainable if the proper strategy and knowledge of the possibilities are used. This will help make financial goals a reality by examining how students in India who don't have a job can obtain credit cards.
Credit cards for students with no income is a versatile tool for expenses and everyday purchases; however, it also contributes to the increase of the credit score needed for future financial activities like renting an apartment or a car, taking out a mortgage or loan, etc.
Also Read: What is the Use of CIBIL Score?
Credit cards for students with no income are valuable tools for teaching students financial responsibility and establishing credit. They are specifically made to cater to the monetary requirements of college students. Some of the basic features of these cards include discounts, rewards programs, and interest-free periods.
Those who are not eligible to get Credit cards for students with no income or do not have a way of meeting the requirements because of a very bad credit score or no past credit score can apply to be an authorised user of a parent or guardian credit card account. The student is given full privilege to use the credit card account and pay for goods and services when needed. Though the account is opened in the primary cardholder's name, subsequent credit card payments shall also be made by him or her. This is because, through credit card privileges, students can establish a credit history without having to manage the card on one's own.
Banks and other financial organisations provide credit cards, which give a line of credit for purchases or cash withdrawals up to a certain amount. They provide unmatched convenience in budgeting, establishing credit, and handling crises. A credit card helps students establish a good credit history early on, opening doors for later financial endeavours.
Using a credit card for students with no income is one of the easiest ways for students without earnings to secure a credit card easily.
Crucial matters such as spending limits and the degree of obligation between the primary cardholder and the student should be well spelt out so that one does not undo the other, with the possibility of adversely affecting their respective credit scores.
Student credit cards are similar to normal ones, but they have lower credit limits and less extensive reward programmes, which might initially sound disadvantageous. However, such features are congenial for inexperienced students who opt for credit because the opportunities to take on too much debt are significantly limited.
The criteria for issuance of a Student Credit Card are listed below:
1. A person needs to be eighteen (18) years old. You must be enrolled in college or university to be eligible for a student credit card. This is a variable factor as some banks do offer teenagers or people below 18 years old the enrollment of a card but with a guardian supervision.
2. A student would need a student ID card. Other essential documents may include the marksheets, school details, guardian details, and other supporting documents of parents.
3. Some student credit card companies could urge parents or students to open an account with a fixed deposit for a specific amount. Fixed deposits would act as security because these credit cards provide unsecured credit.
4. Certain banks in India could require an account in a savings account holding a minimum quarterly value to qualify for a student credit card. The banks can also ask the parents to open a joint holding account instead of a single account of the student.
5. Certain banks only allow customers who have obtained a higher-education loan from them to apply for student credit cards. However, the terms and conditions may vary depending upon the bank requirements.
Kindly know that these requirements are wide and can be specific according to different banks, hence its advisable to first check the official sites of the bank to ascertain the full criteria.
Also Read: Is 720 a Good CIBIL Score?
Most providers specify that the applicant must be in college or a university and produce a college acceptance letter or student identification. The student receiving financial aid doesn't need a regular source of income. However, they might have to demonstrate the availability of documents from education loans, scholarship grants, or their allowances. This enables them to ensure they are in a position to make the minimum monthly payments on their credit and manage their credit wisely.
This kind of credit card demands that the user deposit cash. This payment, a cash deposit, sets the credit limit and acts as security for the card. To keep cardholders from exceeding their spending restrictions, a secured credit card's available credit limit is frequently equivalent to the payment amount. Secured credit cards work substantially differently from unsecured cards, which lack security and only rely on the cardholder's credit history. Secured bank cards are ideal for people with insufficient credit history or poor credit scores who cannot be approved for traditional credit cards. Offering collateral lowers the issuer's risk and speeds up the application procedure for cardholders.
1. Examine your options: Secured credit cards are available from several Indian banks. It is readily available after visiting the bank and making the appropriate request based on what best suits your demands.
2. Apply with a deposit: Many people apply for a secured credit card by filling out the secured credit card application form and submitting a security deposit.
3. Employ caution: Proper credit management entails that the person embarks on small, frequent purchases and pays all the balances on time.
Today, many Indian banks have student-specific credit card facilities. These cards are easier to secure for those who do not have stable employment because of the easier requirements and relatively low credit limits. They are meant to be a viable financial asset to students and help establish their creditworthiness.
Also Read: Is 650 a Good CIBIL Score?
1. Verify your eligibility: The general rule that applies to credit cards for teens is categorised by some bank requirements. Generally, a co-applicant is needed, and the student should attend an accredited school.
2. Get your documentation ready: Banks need evidence of your name, address, and enrolment. Ensure that the required documents are nicely arranged so that there are fewer hurdles throughout the application process.
3. Apply online or in person: Although you may apply at a branch, most banks allow credit card for teens applications online.
Another good choice is a shared credit card, wherein a student is linked to a parent's or guardian's account as an additional cardholder. With this card, students can establish a good credit score and obtain a credit card for students with no income without the need for a steady source of income.
1. Take help from the primary credit card holder: Speak with your guardian or parent about adding you as an authorised user to their current credit card account.
2. Recognise the terms: Make sure that everyone understands the conditions of the card and how payments are handled.
1. Establishing Financially: Having a credit card does not end with applying for it; establishing good credit is crucial. Students should focus on managing their cash, budgets, and savings for future basic needs. An understanding of money matters and budgeting should be taught anyway, although there is no money to spend.
2. Pay before the due date: Irresponsible handling of credit cards affects credit history. To avoid being charged interest on the credit card, ensure your credit is high, and you pay your bills on time. Do not acquire unimportant items; try to clear the balance in full each month.
3. Analyse the credit report: Equally important is monitoring the credit report periodically to correct entries where necessary. The credit report agencies in India are Experian, CIBIL, Equifax, and CRIF High Mark. The reports are beneficial for promptly detecting and preventing anomalies that may appear in the enterprise.
Besides the strategies mentioned above, students also have other options for credit building that may, in turn, assist them with acquiring their credit cards in the future. One measure includes opting for rental accommodation where the tenant's monthly rent is reported to the credit bureaus. Even though this does not directly offer a credit card, it does offer a positive contribution to their credit history, hence making them appealing to credit card providers.
Further, students can concentrate on other types of credit that are presumably much easier to qualify for, like a small personal credit from a credit union or store cards. Most people never realise that even a phone contract or utility payment, if reported, can be used to build credit. Positive payment history on these forms of credit will help build students' credit, allowing them to apply for credit cards.
1. Recurring and Fixed Deposits: While RDs and FDs have no bearing on the credit rating, it may be helpful to keep these accounts open to demonstrate to potential creditors that one is a good credit risk.
2. Based on Education Loans: Educational loans can also help build a credit history. Repaying these debts on time will increase your credit score. Still, expected earnings often secure such loans; reasonable loan management is a sign of maturity.
Students can properly access credit through the use of student credit cards. Even without a steady source of income, students may still get credit cards by knowing their alternatives and employing the appropriate tactics. Recall to make sensible decisions and handle credit cards with care!
It is thus not easy to secure a credit card for a student with no income, but this should not be a hindrance if a student is determined by following the correct procedure and identifying the right credit card companies to approach. Having a credit card for teens is empowering, and being able to financially support oneself while a student and dealing with the ups and downs of managing a credit card is a definite plus. However, having a credit card may be advantageous before delving into the many possibilities.
When one cannot apply for a credit card for students with no income, and there is no way the student can become an authorised user, the best option remains with secured credit cards. A secured credit card functions similarly to a traditional credit card but with one key difference: what holds it's the client to a contract is asking for a cash deposit guaranteed. This deposit typically defines the credit limit and is practically devoid of risk for credit providers. For students who may have saved some cash, perhaps by working during their summer break or maybe as a result of gifted money, this deposit can be used to get a secured credit card.
In India, obtaining a credit card as a student without a source of income requires careful thought and consideration of several possibilities. Other ways to get and manage credit include shared, secured, and prepaid cards. Long-term financial stability requires prudent use, prompt payments, and consistent monitoring to build a healthy credit record.
Using these tactics, students can bridge the gap between their current financial status and their desired credit. With cautious handling and a proactive mindset, the desire to get a credit card may come true, setting the foundation for a sound financial future.
What are student credit cards?
Student credit cards are issued to students without an income to meet their financial requirements.
Can a student get a credit card?
Credit card issuing companies, like banks, issue credit cards to students or add-on cards along with a family member or guardian’s credit card.
What requirements apply to a student credit card?
The procedure for obtaining a student credit card is straightforward. Still, certain documents, such as a PAN card, Aadhaar card, and a recent passport-sized photo, are required for approval. Additional documents frequently needed include evidence of enrollment in a school, details about your guarantor, or proof of your income.
Do students find credit cards useful?
Students can quickly raise their credit score with an Add-on credit card. With every credit card purchase, students can accrue reward points. The reward points can be redeemed for cash or brand coupons that can be used to purchase food, dining out, vacation, and other items.
What is the student card limit in India?
Student credit cards typically have a Rs.15,000 credit limit. This is to prevent reckless spending from resulting in debt. When a specific amount is spent using the card, the student cards come with rewards, including loyalty programs that pay cashback or cash points.
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