It is always a difficult choice when deciding what your child’s first gift should be – their first toy, their first bike, their first mobile phone, etc. Now that they are grown up and are in university, are you yet again faced with the decision of what their first should be – a student credit card or a supplementary credit card?
Let’s see what your kid’s future would look like with both these cards so you can make an informed decision.
Spending Limit on Student Credit Cards vs Supplementary Credit Cards
In Singapore, student credit cards come with a pre-set spending limit of S$500. This limit will help students manage their expenses better and cover most necessary purchases and payments they need to make on a monthly basis.
With an add-on credit card or a supplementary credit card, you (the primary cardholder) can decide what limit you want to set for your kid on their card. However, the onus will be on you to decide what an appropriate spending limit is for your kid. This could prove to be an advantage or a disadvantage depending on how you look at it.
Credit Card Habits with Student Credit Cards vs Supplementary Credit Cards
A student credit card will be completely detached from your card, i.e. you will not have any responsibility over your kid’s spending habits, bill payments and so on.
When your children are completely responsible for their own credit cards and expenses, it inculcates responsibility for their actions. They learn financial education and independence because their card is not tied to yours. The responsibility of making timely payments will be on them and they will become answerable for their expenses and spending habits.
On the other hand, with supplementary card, your child will never be the primary cardholder as the card is always linked to your card. Also, as the credit limit on the card can be increased or decreased by you at any point in time, you may end up changing the limit as and when your kid pleads with you. You will always put your kid’s comfort first and therefore, if the limit needs adjusting, that is likely what you will do.
Although supplementary cards can also teach your child valuable financial lessons, it may not provide them with as much financial independence as a student credit card.
Rewards on Student Credit Cards vs Supplementary Credit Cards
Student credit cards are designed to offer benefits that are specific to students and rewards that students would want.
For instance, the Citi Clear Card offers students exclusive privileges at Zouk, Wine Bar and Velvet Underground . Additionally, they will earn Citi Rebates at Starbucks and Burger King, joints that students (and many of us adults) love to frequent.
The Maybank eVibes Card offers 1% cash rebate on all purchases and the Standard Chartered MANHATTAN S$500 Card offers 0.25% cashback on all purchases. The DBS Live Fresh Student Card is an all-in-one credit card which students can also use as an EZ-Link card and travel to school every day or as an ATM card to withdraw money. So, students can earn rewards on any and all expenses they incur. This will definitely come in handy.
On the other hand, supplementary cards share the same benefits as the main card. So, if you own a shopping credit card or a travel credit card, your child will enjoy the same features and benefits. However, note that miles and points accumulated are typically added to your account, and are not split between main cardholders and supplementary cardholders.
If you look at the larger picture, a student credit card may be more suitable for your kid than a supplementary credit card. This is because they will not only have financial independence, but they will also learn the responsibility of managing their own expenses, whilst enjoying specific rewards and benefits specifically designed for students.
What would you get for your kid?