Supplementary credit cards, sometimes also called add-on cards, allow primary credit card holders to assign an additional credit card for the use of their loved ones or friends, with the supplementary credit cards sharing the same credit limit as the primary credit card they are tied to.
Since those under the age of 18 will not be able to apply for credit cards of their own, parents applying for a supplementary card and assigning it to their children can be a useful way of allowing their kids to enjoy some of the convenience and benefits of credit cards.
Before parents apply for a supplementary card for their children, here are some pros and cons they should know about and consider.
Pro #1: Combining Reward Points
Certain credit cards allow cardholders to combine reward points. This means that the primary credit card holder actually earns reward points when the supplementary cardholders spend money. This can help to speed up your point accumulation, and hence allow you to redeem rewards faster as well.
As an example, we use Citibank’s Rewards Calculator to find out how much more you can earn in reward points from giving your child a supplementary card. Let’s say you set the credit limit per month at the minimum $1,000, and your child spends $100 per month on each of the following aspects:
You would have earned an extra 38,400 points on your children’s expenses – this is the equivalent of a $90 cash rebate, or $91 worth of points that you can use to pay redeem at participating merchants.
Pro #2: Having Extra Funds On Hand In Case Of Emergencies
If your child does not have a source of regular income, there is a risk that he or she may not have enough in the savings account to tide over emergencies, and this is the time that a credit card will come in handy.
Also, if your child is heading overseas for extended periods (such as completing his/her studies overseas, going on exchange, summer school, grad trip), then a supplementary credit card will definitely come in handy. It is one of the best all-purpose payment methods, accepted widely abroad. It is also useful for certain expenses such as renting cars and apartments, which typically do not accept debit cards as a form of payment.
Having a credit card available while travelling also allows your child to have more than one form of payment should a larger purchase be needed. This is especially crucial in times of emergencies, where your child is not able to pay using the limited cash they have on hand, or in their savings accounts.
By carrying a credit card for purchases rather than debit cards, you can report and terminate your child’s card without false purchases affecting your bank account if fraud ever occurs.
Pro #3: Ability To Use Apps And Services That Require Credit Cards
With a supplementary card, your child can use a credit card to register for apps and services that require cashless payment systems. This includes taking Grab, booking movie tickets, and more. In addition, there are many discounts and promotions that can only be enjoyed with credit cards. Having a supplementary credit card gives your child more options and the ability to learn how they can stretch their dollars.
Pro #4: Monitor Your Kids’ Spending
For those who realise that their child is suddenly spending a lot of money, or never manages to save any money every month, getting him or her a supplementary credit card can be a good way for you to track his/her expenses from the credit card bill.
As mentioned earlier, your child may have added the supplementary credit card as the payment mode for apps such as Grab and Taobao. By looking at your credit card bill, you may find out that your child is spending a few hundred dollars every month on ride-hailing, food deliveries, and online shopping with the supplementary credit card.
If you are concerned about the big-ticket expenses, you can then have a talk with your child to uncover the reasons behind them, as well as how you can work together to cut down on the expenses. For example, he or she could be frequently taking Grab because waking up late for school has become a (bad) habit that even your child did not realise.
Your child may also be more inclined to be careful of his or her expenditure, knowing that you are able to keep track of how much and what they are spending on.
Pro #5: Learning About Credit Cards Early
Last but not least, your child gets a better understanding of how credit and loans work before he or she is equipped with a primary credit card. When done right, your child is more informed about maximizing the benefits of using a credit card, without putting him or herself at risk of being a ‘credit card slave’.
Con #1: Paying Additional Fees
As fantastic as a supplementary credit card may sound after you have read the pros of getting one, do take note that you may actually have to pay additional fees to get supplementary cards for your child. Some banks give fee waivers, but only for the first or second cards.
See the tables below for examples of different ways fees are charged to Citibank and UOB credit cards. Citibank gives a 1st year waiver on all cards, then charges an annual fee for certain cards:
|Citibank Credit Cards||Annual Fee|
|Citi Prestige Card||Free for life|
|Citi PremierMiles Visa / American Express® Card||Free for life|
|Citibank Rewards Visa Signature||$96.30|
|Citibank Rewards WORLD MasterCard||$96.30|
|Citibank Platinum Visa||$85.60|
|Citibank Clear Platinum Card||$85.60|
|Citi Cash Back Visa Signature||$96.30|
|Citi Cash Back WORLD MasterCard||$96.30|
|Citibank Partner Cards|
|Citibank M1 Platinum Visa||$96.30|
|Citibank SMRT Visa Platinum (2-year annual fee waiver)||$96.30|
On the other hand, UOB completely waives the fees on your first and/or second supplementary cards, and then charges an annual fee for subsequent cards:
|UOB Supplementary Credit Card Fees|
|Supplementary Card||First/Second Card(s)||Subsequent Cards (Inclusive of GST)|
|UOB Lady’s Solitaire Metal Card||No annual fee on the first and second cards||S$288|
|UOB Lady’s Solitaire Card||No annual fee on the first and second cards||S$192.60|
|UOB PRVI Miles Platinum American Express® Supplementary Card||No annual fee on the first and second cards||S$128.40|
|UOB PRVI Miles Visa Supplementary Card||No annual fee on the first and second cards||S$128.40|
|UOB PRVI Miles World MasterCard Supplementary Card||No annual fee on the first and second cards||S$128.40|
|UOB Visa Signature Supplementary Card||No annual fee on the first card||S$107|
|UOB One Supplementary Card||No annual fee on the first card||S$96.30|
|UOB Preferred Platinum Supplementary Card||No annual fee on the first card||S$96.30|
|UOB Preferred Platinum Visa Supplementary Card||No annual fee on the first card||S$96.30|
|UOB Lady’s Platinum Supplementary Card||No annual fee on the first card||S$96.30|
|SingTel-UOB Platinum Supplementary Card||No annual fee on the first card||S$96.30|
|Metro-UOB Platinum Supplementary Card||No annual fee on the first card||S$96.30|
|UOB Professionals Platinum Supplementary Card||No annual fee on the first card||S$96.30|
|UOB UnionPay Platinum Supplementary Card||No annual fee on the first card||S$96.30|
|UOB JCB Platinum Supplementary Card||No annual fee on the first card||S$32.10|
|UOB YOLO Supplementary Card||No annual fee on the first card||S$96.30|
You can visit the following websites in order to check the fees and charges applicable for other financial institutions’ supplementary cards:
– DBS Supplementary Card Fees
– CIMB Supplementary Card Fees (waived for all cards since 23 November 2018)
– OCBC Supplementary Card Fees
– Maybank Supplementary Card Fees (free for all)
– BOC Supplementary Card Fees (SGD 95 per annum)
Con #2: Unintentionally Creating A “Spend First” Mentality Towards Money
Using a credit card is borrowing money from the bank to pay for your expenses, while using a debit card is paying with money that is already in your bank account.
There is a possibility that your child will get too used to spending first before paying, especially if you are helping them to pay for all their supplementary card bills. When your child gets a personal credit card in the future, he or she may keep using the credit card to pay for all their expenses and forget that they actually have to pay off their bills with added interest.
One way you can prevent this from happening is to enforce that your child pay back a portion, or even all of their supplementary card bills, within a certain period of time. It teaches them to think twice before swiping their card.
Manage The Downsides To Still Reap The Benefits
As with all tools, supplementary cards have really attractive benefits, with downsides you need to be aware of and carefully manage. By incorporating good financial education and close communication with your child, both of you will be able to enjoy the best that credit cards have to offer, while avoiding the pitfalls.