Building a solid financial foundation early is a massive advantage. College students in India often struggle to get credit cards because they do not have income proof, pay tax filings, or have a credit history. However, banks offer specialized student credit cards (often called secured credit cards) to solve this issue.
Let's review the best student credit cards in India and outline how students can use them to build an excellent credit score before graduation.
How Secured Credit Cards Work
Since students do not have steady salaries, banks cannot assess their repayment capacity. To mitigate risk, banks issue cards against a **Fixed Deposit (FD)**. The process is simple:
- You open an FD with the bank (starting from Rs. 5,000 to Rs. 10,000).
- The bank issues a credit card with a credit limit equal to 90% to 100% of your FD.
- Your FD continues to earn regular interest.
- If you fail to pay your bills, the bank can recover dues from your FD. However, as long as you pay on time, your deposit remains untouched.
Top Student Credit Cards in India
1. IDFC FIRST WOW Credit Card
The IDFC FIRST WOW is an exceptional secured card. It requires a minimum FD of just Rs. 5,000. It is a lifetime free card that charges zero forex markup fees, making it excellent for international students or tech-savvy teens purchasing software online. It also offers reward points on all spends.
2. Kotak Dream Different Credit Card
Issued against a Kotak fixed deposit of Rs. 10,000 or more, this lifetime free card offers reward points on online spends, fuel surcharge waivers, and complimentary interest-free cash withdrawals for up to 48 days.
3. OneCard Secured Credit Card
A mobile-first metal credit card issued against a fixed deposit of Rs. 5,000 or more. It features a sleek app interface, instant virtual activation, and attractive reward points structures, making it highly popular among college students.
Tips for Students to Build an Excellent CIBIL Score
- Pay in Full: Never carry a balance. Set up auto-debit to pay the total bill on time every month.
- Keep Spend Low: Do not exhaust your credit limit. Keep utilization below 30% to maintain a healthy CIBIL score.
- Monitor Credit Reports: Use free tools to check your CIBIL score quarterly and check for errors.
Conclusion
Starting your credit journey as a student sets you up for financial success in adulthood. By getting a lifetime free secured card like the IDFC FIRST WOW, you can build a credit history that will make future car and home loans easily accessible and affordable.