Disadvantages of HDFC Add-On Credit Card

An HDFC add-on credit card, also known as a supplementary card, is issued to family members of the primary cardholder, sharing the same credit limit and offering similar benefits. Below are the advantages and disadvantages of HDFC add-on credit cards based on available information:

Advantages of HDFC Add-On Credit Card

• Shared Benefits for Family Members:
  • Add-on cardholders (spouse, parents, siblings, or children above 18) enjoy the same privileges as the primary cardholder, such as reward points, cashback, discounts, and lounge access (if applicable). For example, reward points earned on add-on card transactions can be redeemed for discounts or vouchers.

• Cost-Free Issuance:
  • HDFC add-on cards are lifetime free, with no annual or joining fees, making them a cost-effective way to extend credit card benefits to family members.

• Flexible Credit Limit:
  • The add-on card shares the primary card’s credit limit, but the primary cardholder can set a sub-limit for the add-on card to control spending. This sub-limit applies to Point of Sale (PoS) transactions but not online purchases.

• International Usability:
  • If international transactions are enabled on the primary card, the add-on card can be used for shopping abroad, offering convenience for family members traveling internationally.

• Reward Points and Offers:
  • Add-on cardholders earn reward points on their transactions, which contribute to the primary cardholder’s reward pool, helping achieve milestones faster. These points are redeemable for travel bookings, vouchers, or cashback.

• Lounge Access:
  • If the primary card offers airport lounge access, add-on cardholders may also benefit from it, depending on the card type (e.g., Regalia or Infinia).

• Easy Application Process:
  • For HDFC account holders, applying for an add-on card is seamless through NetBanking or the mobile app. Non-account holders can submit a form at a branch, with minimal documentation required (e.g., photo ID and address proof).

Disadvantages of HDFC Add-On Credit Card

• Primary Cardholder’s Liability:
  • The primary cardholder is solely responsible for all payments, including those made by the add-on cardholder. Late or missed payments on the add-on card can negatively impact the primary cardholder’s credit score.

• Shared Credit Limit:
  • Since the add-on card shares the primary card’s credit limit, excessive spending by the add-on cardholder can reduce the available credit for the primary cardholder, potentially causing inconvenience.

• Credit Score Dependency:
  • The add-on card’s usage affects the primary cardholder’s CIBIL score, as all transactions are reflected in their account. Irresponsible spending by the add-on cardholder can harm the primary cardholder’s credit history.

• Restricted Eligibility:
  • Add-on cardholders must be over 18 and related to the primary cardholder (spouse, parents, siblings, or children). This restricts issuance to non-family members or minors.

• Cumbersome Process for Non-HDFC Customers:
  • For individuals without an HDFC account, the application process involves downloading a form, filling it out, and submitting it physically to a branch or mailing it to HDFC’s Chennai office, which can be inconvenient compared to other banks like Amex.

• Potential for Misuse:
  • If the add-on cardholder spends recklessly, it can lead to disputes or financial strain for the primary cardholder, who bears full responsibility for settling the bills.

• No Independent Credit Building:
  • Since the add-on card is linked to the primary cardholder’s account, the add-on cardholder cannot build their own credit history, which may be a drawback for younger family members like students.

Recommendations

HDFC add-on credit cards are a convenient and cost-free way to extend credit card benefits to family members. It also offer shared rewards, lounge access, and easy expense tracking. However, the primary cardholder assumes full liability for payments and credit score impacts, and the shared credit limit can be a constraint. The application process is straightforward for HDFC customers but less so for non-account holders. To maximize benefits, the primary cardholder should ensure responsible usage by add-on cardholders and set appropriate sub-limits where needed.

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