Ever wished your loved ones could enjoy the benefits of your credit card without the hassle of applying for their own? Well, a supplementary card might be the perfect solution!
In this blog, we’ll delve into the world of supplementary cards, explaining exactly what they are and how they work. We’ll cover everything from who can get one to how spending limits are set, and explore the advantages and potential drawbacks of adding a supplementary card to your account.
So, whether you’re looking to help out a family member or build their credit history, keep reading to find out if a supplementary card is the right fit for you!
What is a Supplementary Card?
A supplementary card, sometimes called an add-on card, is a plastic card linked to an existing credit card account. Unlike a primary card, which is issued directly to the account holder, a supplementary card is issued to another person authorised to make purchases using the primary card’s credit line.
Here’s how a supplementary card differs from a primary card:
Primary Cardholder vs. Supplementary Cardholder
The primary cardholder is the main person responsible for the credit card account. They control the account, manage payments, and are ultimately liable for all charges.
The supplementary cardholder is an authorised user who can make purchases with the card, but they don’t have direct control over the account.
Independent vs. Linked
A primary card functions independently, with its own credit limit, billing statement, and rewards program (if applicable). A supplementary card, on the other hand, piggybacks on the primary card’s features. It typically shares the same credit limit, receives a combined billing statement, and may or may not participate in the same rewards program, depending on the bank’s policy.
Think of it like this: The primary card is the main house, and the supplementary card is a guest key. The guest can access the house (make purchases) but doesn’t own it (control the account).
Linking to the Primary Account
A supplementary card is linked to the primary cardholder’s account through the card issuer (bank or financial institution). The issuer assigns a unique card number, expiration date, and CVV code to the supplementary card for security purposes.
However, all transactions made with the supplementary card are reflected in the primary cardholder’s statement and contribute to the shared credit limit.
How Does a Supplementary Card Work?
Functionality:
A supplementary card functions just like a regular credit card in terms of everyday use. The supplementary cardholder can use it to:
- Make purchases at stores that accept the card’s network (e.g., Visa, Mastercard).
- Pay for online transactions on websites that accept credit card payments.
- Get cash advances at ATMs (depending on the bank’s policy and any set limits).
The process is identical to using a primary card, with swiping, tapping, or entering the card details and PIN for verification.
Shared Features:
Here’s what supplementary cardholders typically share with the primary card:
- Credit Limit: Both cards tap into the same credit limit allocated by the bank to the primary card account. This means all purchases made with either card contribute to the total balance that needs to be repaid.
- Rewards Programs (Optional): Some banks extend the primary card’s rewards program to supplementary cards. In such cases, points or cashback earned through both cards are accumulated in the same account.
- Billing Statements: Supplementary cardholders typically don’t receive separate billing statements. All transactions made with both cards are consolidated and reflected in the primary cardholder’s monthly statement. This allows the primary cardholder to track and manage overall spending on the account.
Optional Features
Some banks offer additional features for supplementary cards that provide more control to the primary cardholder:
- Spending Limits: The primary cardholder might be able to set a specific spending limit for the supplementary card. This restricts the amount the supplementary cardholder can spend within the credit limit.
- Transaction Controls: Certain banks allow limitations on specific types of transactions, like online purchases or cash advances, for supplementary cards. This can help manage spending habits or prevent unauthorised activity.
Who Can Get a Supplementary Card?
Supplementary cards are typically issued to people who have a close relationship with the primary cardholder and may benefit from shared credit privileges. Here are some common examples:
- Spouses or Domestic Partners: Sharing a credit card through a supplementary card can be a convenient way for couples to manage joint expenses or build credit together.
- Children (Age Dependant): For teenagers or young adults, a supplementary card can be a useful tool to learn responsible credit card use under parental supervision. Banks often have minimum age requirements (usually 16 or 18) for supplementary cardholders.
- Parents or Elderly Dependents: In some cases, adult children might use supplementary cards to help cover expenses for parents or elderly dependents who may not qualify for their cards.
Eligibility Checks
While the specific requirements may vary by bank, it’s generally expected that the supplementary cardholder has a good relationship with the primary cardholder. Sometimes, the bank may conduct a soft credit check on the supplementary cardholder, especially if they are young or have no credit history. This doesn’t impact their credit score but allows the bank to assess potential risks.
The primary cardholder remains ultimately responsible for the account and any charges incurred by the supplementary cardholder. This is why choosing someone you trust and who demonstrates responsible financial habits is crucial.
In Summary
A supplementary card can be a valuable tool for sharing credit privileges and building credit history for authorised users. However, it’s important to understand the key points before adding one to your account:
- Linked Account: A supplementary card is linked to the primary cardholder’s account, sharing the credit limit, rewards program (if applicable), and billing statement.
- Shared Responsibility: The primary cardholder is ultimately responsible for all charges made with both cards.
- Optional Features: Some banks offer spending limits and transaction controls for supplementary cards, allowing for more control over spending.
Considering a supplementary card? Make sure to choose an authorised user you trust and who demonstrates responsible financial habits to avoid potential overspending and strain on your finances. Communicate spending expectations and limitations with the supplementary cardholder. Discuss responsible credit card usage and set clear boundaries.
