India is one of the few countries in the world with the most number of young people. By 2022, the country is predicted to become the youngest country with the millennials dominating the country’s population.
In such a scenario, businesses are also targeting the largest generation by designing products and services that cater to their specific needs. Student credit card is one such solution woven around the needs and necessities of this generation teens. It is designed to cater to the needs of students pursuing their education in India and abroad.
The basic concept of the credit card remains the same even in student credit card except for a few changes in its features and benefits that are customized to provide financial freedom to the youngsters while ensuring their spends are within limits. Despite these changes, parents are still apprehensive about allowing their teens to have a credit card.
If you are one among those here is a detailed explanation of the most common features of student credit cards. You can go through the same and decide whether or not to provide a student credit card to your teen.
Features Of Student Credit Cards
Many nationalized as well as private sector banks are offering student credit cards with a variety of benefits and features. Though the facilities offered by the cards vary from bank to bank there are some common features that make them an attractive option for the teens. Let’s explore them in detail.
- Joining and annual fee: Apparently credit card companies have considered the minimum funds available for the Indian students compared to those in other countries where they do some part-time jobs to earn some extra money. This made them introduce student credit cards with no joining fee and annual fee. Therefore, students who wish to apply for the card need not worry about paying the fee. They just have to pay whatever they spent on the card.
- Credit limit of student credit cards: Unlike the regular credit cards, which have higher credit limits decided based on the applicant’s income potential and trustworthiness, student credit cards have lesser credit limits typically decided by the banks themselves. The students do not have an option to apply for a specific limit nor can they enhance the limit. Hence, parents can rest assured about their children’s expenses.
- Attractive rewards and cash backs: The reward points program offered along with student credit cards are customized to the spending behavior of the students. While earning reward points for every penny spent on the card, students are also eligible for cashback and other discounts. This way they can earn while they pay and also get benefitted compared to normal spends.
- Monthly statements: Just like regular credit cards, monthly statements depicting the expenditure on the card will be generated. Parents can be smart here by registering their e-mail addresses with the bank instead of their children. This way they can know the spending patterns of their kids and question them if they are unnecessarily spending on something.
Well, this is how student credit cards are designed. In the current days, carrying a card is considered a better alternative to having cash in hand. With India moving towards the digital economy, there is no harm in introducing these generation kids to digital payments. However, the onus is on the parents to make sure they are not misusing the available funds.