Primary Credit Card Holder vs Secondary Credit Card Holder

Posted on Thursday, September 19th, 2024 | By IndusInd Bank

In today’s age, credit cards have become a useful financial tool for individuals and families alike. Many credit card holders may also wonder whether they can extend the benefits of their credit card to their loved ones. This is possible – the main credit card holder, also called the primary cardholder, can assign another individual as the secondary credit card holder. 

However, not everyone fully understands the distinction between a primary and secondary credit card holder, especially when managing responsibilities and benefits are concerned. Here’s a guide on the same.

Understanding Primary and Secondary Credit Card Holders

• A primary credit card holder is the person who applies for the credit card. Upon approval, they are solely responsible for managing the account. 

• The primary cardholder is legally bound to pay off any outstanding balances. This is applicable even if the secondary credit card holder made the transactions.

• A secondary cardholder is an individual who has been granted access to the credit card by the primary holder. 

• Secondary cardholders are also referred as authorised users. They can use the credit card just like the primary holder. However, they do not hold any legal responsibility for the repayment of the debt incurred.

• A primary and secondary credit card holdercan use a single credit card account separately with the help of an add-on credit card.  

An Overview of Add-on Credit Cards

Banks issue add-on credit cards under the primary credit card account. However, it is given to a secondary credit card holder. It allows the secondary holder to make purchases, withdraw cash, and enjoy the benefits associated with the card.

The credit limit on an add-on card is shared with the primary card. So, the total spending limit is divided between the primary and secondary cardholders. This setup can be beneficial for families. With such a setup, parents can provide their children or other dependents with a card for emergencies or daily expenses.  

Roles and Responsibilities of a Primary Card Holder

The primary credit card holder bears the full responsibility of managing the credit card account. This includes:

1. Account Management

The primary holder must manage the credit card account. This includes paying off the balance, monitoring transactions, and keeping the account in good standing.

2. Liability for Debt

The primary holder is legally responsible for repaying any debt on the card. This includes purchases made by secondary cardholders.

3. Credit Score Impact

How each cardholder uses the card directly impacts the primary holder’s credit score. Late payments, high balances, and defaults can affect the credit score negatively. 

4. Setting Limits

The primary credit card holder can set spending limits on add-on cards to control expenses and avoid exceeding the credit limit.

5. Access to Rewards

The primary holder is entitled to all the rewards, cashback, and points earned on the primary and add-on cards.

Roles and Responsibilities of a Secondary Card Holder

A secondary credit card holder enjoys many of the benefits of credit card. However, they also have certain responsibilities:

1. Responsible Usage

The secondary credit card holder should use the card responsibly. They should keep in mind the spending limits and the impact their transactions have on the primary holder.

2. Follow the Limits

If the primary cardholder has set spending limits on the add-on card, the secondary holder must adhere to them.

3. Communication

The secondary holder must have communication with the primary holder. This is particularly relevant in the case of large purchases or issues to avoid misunderstandings.

4. Impact on Primary Holder’s Credit

The spending habits of the secondary credit card holder can impact the credit score of the primary holder. Hence, they must keep this in mind when using the add-on card.

Also Read: Credit Card Repayment- Watch Out For APR Interest

Conclusion

It is important to know the roles and responsibilities of both primary and secondary credit card holders for smooth card management. While the primary cardholder carries legal and financial responsibility, the secondary cardholder must use the card responsibly to maintain a healthy financial relationship. 

Whether you are looking to apply for a credit card or share one with a family member, it is essential to choose the right provider. With IndusInd Bank’s range of Credit Cards, you have access to robust features, rewards, and financial security. By selecting an IndusInd Bank Credit Card, you can enjoy a wide range of benefits while sharing the card with your loved ones.

Apply now for an IndusInd Bank Credit Card now! 

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.