Owning a credit card is one thing–but applying for supplementary cards is another. Owning a credit card translates to additional financial advantages as well as responsibilities as opposed to paying everything in cash. Meanwhile, supplementary cards can take your credit card experience to a whole new level, allowing you as the principal cardholder to extend the advantages and responsibilities of credit cards to the members of your family. If you are planning to get supplementary cards for the members of your family, you might want to ask yourself these questions first.
But first, what are supplementary cards?
Supplementary cards are additional credit cards you can request from your credit card provider on top of your principal credit card. Acting as an extension of your credit card account, supplementary cards can be given to any member of your family, granting them the same cashless payment advantage that you have. Aside from allowing them to pay with a single swipe, supplementary cards also have the same privileges such as cash advance and accumulation of rewards points.
(Check out: Get Wise Before You Swipe: Four Mantras You Have To Keep In Mind Whenever You Use Your Credit Cards)
Although supplementary cards have the same function as primary cards, they don’t have the same ceiling as their principal credit cards; either the credit limit of supplementary cards is much lower as compared to the principal by default or the principal cardholder can set the limitations himself. Furthermore, the number of supplementary cards that can be requested by the principal cardholder depends on the type of credit card owned by the cardholder. Some credit cards, especially top-tier cards like platinum and gold cards, can have as many as 9 supplementary cards.
Supplementary cards will provide your family members the same financial convenience that you have, but before you apply for supplementary cards to your family members, ask these four questions to yourself first.
Can I shoulder the expenses that come with supplementary cards?
Whether you like or not, the supplementary cards will be used to pay for products and services in lieu of cash; after all, handing out those cards to your family members count as consent to use them. However, keep in mind all purchases made using supplementary cards will go to your account, and since all purchases made using credit cards are debt, you have to pay them. So ask yourself: can you shoulder the expenses that come with supplementary cards?
Is the annual fee worth it?
Like regular credit cards, issuing banks charge annual fees for each supplementary card issued. An annual fee is one of the finance charges billed by banks to the credit card users; it is the fee a person must pay for the convenience of owning a credit card. While the annual fees of supplementary cards are much lower as compared to that of the principal’s, you must first assess whether or not the annual fee for the supplementary cards is worth it. If the supplementary card may be used rarely, then it may not be worth it at all. If you’re going to get a supplementary card, make sure to use it frequently albeit wisely. Once you get a supplementary card, banks will charge you with annual fees whether you use them or not.
Are your family members financially responsible enough to possess supplementary cards?
Having a credit card, even if it is a supplementary card, is a big step towards financial responsibility. When wielded by a person with extreme financial discipline, credit cards can be powerful tools. However, credit cards can plunge a person towards financial disaster if every swipe made is out of impulse. While you can use credit cards to instill financial literacy to your household, it is not advisable to hand out supplementary cards to them if you think they are irresponsible when it comes to handling money. Mull over the potentials risks and rewards, and see if your family members can handle a supplementary card without putting you all at financial risk.
Do your family members really need a credit card?
Probably the most important question you have to ask yourself, knowing whether or not your family members really need a credit card is the final nail in the coffin when you’re thinking about getting supplementary cards. Try to assess whether or not a supplementary card is a necessity and not just a status symbol or a bragging right. Once you’ve realized how crucial supplementary cards will be for them, then by all means apply for a supplementary card.
Supplementary cards are more than just extensions of your principal credit line. If used correctly, they can turn your family members to savvy cardholders. Just make sure that your finances are stable enough to apply for extensions or you’ll get caught in a downward spiral of debt.