Unexpected Reality of Student Credit Card Debt

Student Credit Card Debt: Unlike regular credit cards available on the market, student credit cards are introduced to meet the needs of college students who are studying in the country or abroad.

Students can obtain these credit cards online for managing different expenses like buying books, paying tuition fees, conveyance, leisure activities, etc. 

Those who are above 18 years are allowed to apply for student credit cards. It comes with no income requirement or low-interest rate and remains valid for five years. To know more about a student credit card, continue reading.

Statistics of Average Student Credit Card Debt in India   

The credit card debts of students have escalated in recent times. The statistics show their rising trend in recent years. Between 2016 and 2019, the average student credit card debt has augmented from Rs. 87156 to Rs. 115263.

Compared to the western countries, this average is relatively low. Even so, students are highly recommended to sidestep unwanted expenses to avoid falling into debt-trap. 

How to Obtain a Student Credit Card in India?

It is because credit card users are students; in general, financial institutions do not look at the typical eligibility criteria that apply to a normal credit card, such as stable income, credit score, etc., while approving applications for these cards.

However, one can obtain these credit cards by any of the following means:

1. Against an FD

You can apply for this credit card online or offline against an FD if the Fixed Deposit is your name. However, the amount of credit card that you will be eligible for varies between banks.

2. Against Your Savings Account 

If you possess a savings account with a consistent average balance on a monthly basis, you can apply for this credit card against your savings account. 

3. Add-On Card

If any of your family members has a credit card with good credit background, you can be eligible to get a student credit card like an add-on card. 

4. Government Scheme Advantages 

In recent years many state governments have introduced credit cards for college students, such as West Bengal Student Credit Card Scheme, Jharkhand Student Credit Card Scheme, Bihar Student Credit Card Scheme, etc. and you can avail their benefits.

Features and Benefits of Student Credit Cards

A student credit card is a specialised kind of credit card offered to students in schools and colleges to fulfil their needs. It helps them meet their expenditures and manage their funds sensibly.

In general, the terms of these credit cards vary from one lending institution to another. Following are some key features and benefits of student credit cards:

  • A student credit card remains valid for a period of 5 years
  • The rate of interest is low to facilitate prompt and convenient repayment
  • Student credit cards provide fast funding
  • It helps to earn reward points and convert them for getting discounts against credit card transactions. 
  • The student credit card provides a low credit limit in such a way that students do not get burdened by a debt trap. 
  • Several financial institutions provide the scope to convert a student credit card into a normal credit card as soon as the student completes their education.  
  • Student credit cards come with zero or minimal fees and charges
  • A student credit card enables a cardholder to create a healthy credit score since it facilitates quick and timely repayments. 
  • Students can only use their credit cards during emergency situations since it offers less cash withdrawal limit.  

Eligibility Criteria and Documents Required for Availing of a Student Credit Card

Usually, a student credit card has no eligibility or income limit.

This is why students above 18 years can easily avail of this card. The student credit cards remain valid for five years with relatively lower interest rates.

All they need to submit is a PAN card, Aadhaar card, ID proof issued from college or university, and birth certificate to get this card. 

After you meet the eligibility criteria and collect the necessary documents, you can proceed to the application process for this card.

Steps to Apply for a Student Credit Card 

Mentioned below are the steps to apply for a student credit card online:

Step 1: Navigate to the official website of your preferred financial institution.

Step 2: Meet the eligibility criteria and select the ‘Apply Now’ option.

Step 3: Upload the necessary documents 

Step 4: Click on ‘Submit’.

Upon completion of all these steps, your application for availing a student credit card will be submitted successfully.

List of Financial Institutions Offering Student Credit Cards in India

Many financial institutions in India have started offering student credit cards. You can opt for an HDFC credit card that comes with notable advantages.

Following are some other popular lenders where you can apply for it:

  • State Bank of India
  • ICICI Bank  
  • Axis Bank 
  • Kotak Mahindra Bank  

Having a comprehensive understanding of student credit cards may help you avail of this facility with diligence.

However, remember that the terms and conditions of all credit cards vary from lender to lender. So, you have to conduct thorough research about them in the first place and take your decision sensibly. 

FAQ’s on Student Credit Card Debt

How can Students Avoid Credit Card Debt?

Students can avoid credit card debt by being responsible for their credit card usage. They should only use their credit card for essential purchases and avoid using it for luxury items. Additionally, they should make timely payments on their credit card balance to avoid accruing interest and late payment fees.

What are Some Tips for Responsible Credit Card Usage?

Only use credit cards for essential purchases and avoid using them for luxury items. – Create a budget and stick to it to avoid overspending. – Pay off credit card balances in full every month to avoid accruing interest. – Set reminders for payment due dates to ensure timely payments

In conclusion:

In India, student credit card debt is an increasing concern. Due to easy access to credit and rising educational costs, students are incurring debt at a younger age.

Students can avoid falling into debt by adhering to a few simple guidelines, such as paying bills on time, avoiding unnecessary expenses, and seeking assistance from financial experts.