Opening credit cards for college students: Possible approaches under current banking policies

With increasingly diverse expenses related to education and living costs, many students wish to own a credit card for convenient payments and short-term financial management. However, the biggest obstacle when applying for a credit card for students is the income verification requirement, which most students are unable to meet.

In reality, students can still access credit cards through alternative forms of financial proof, depending on the policies of each bank at different times. This article will help you understand the common options currently in use.

1. Why do college students have difficulty getting credit cards?

Credit cards are unsecured or partially secured consumer loan products, therefore banks always need a basis to assess the cardholder's ability to repay. For students, the lack of stable employment or regular income makes their applications more likely to be rejected if only considering standard criteria.

Students often face obstacles when opening credit cards because they lack a stable income to demonstrate their ability to repay the loans.

Therefore, many banks have developed more flexible options, allowing students to open credit cards based on the financial creditworthiness of their sponsor or existing legitimate assets, rather than salary income.

2. Option 1: Open a supplementary credit card through a relative.

This is the most common and accessible option for students. Students are issued a supplementary credit card based on their parents' or close relatives' primary credit card.

The supplementary card retains all payment functions and benefits and can be used within the limits allocated by the primary cardholder. The final payment responsibility rests with the primary cardholder, not the student.

Before choosing this option, several basic conditions must be met:

• A relative has a valid credit card.
• The primary card's spending and payment history is in good standing.

Supplementary credit cards for students share the same credit limit and are subject to the financial creditworthiness of the primary cardholder.

Advantages of supplementary cards:

• Students do not need to provide proof of personal income.
• Simple procedures, fast processing time.
• Suitable for students who do not yet have their own financial resources.

3. Option 2: Open a credit card based on a life insurance policy.

In the case where a student is the policyholder of a life insurance policy and directly pays the premiums, this policy may be considered as a basis for proving financial capacity.

Depending on the policies of each bank and the specific period, life insurance policies may be accepted as a form of indirect financial security. However, not all policies are eligible for approval.

Typically, the bank will consider:

• The insurance policy is still valid.
• The insurance period is long enough.
• The total amount paid must reach the minimum threshold as stipulated in the internal regulations.

This option is suitable for students who have long-term financial plans and proactively participate in insurance early on.

4. Option 3: Open a credit card using a savings account or passbook.

If students have a savings account or passbook in their personal name, this is one of the clearest pieces of financial evidence that banks will consider when issuing a credit card.

The bank will determine the credit limit based on the value of the deposit, rather than requiring monthly income.

Some common conditions apply:

• Students are the legal owners of the passbook or savings account.
• The balance must meet the minimum level required by each bank.

Savings accounts help students demonstrate their financial capacity when applying for credit cards.

The advantage of this option is that the credit limit can be a high percentage of the deposited amount, and there is no requirement to prove salary income.

5. Documents required when opening a credit card for students.

Regardless of the chosen application method, students need to prepare all the required documents to ensure a smooth review process. Typically, the basic application package will include:

• Valid identification documents (ID card/citizen identification card or passport)
• Proof of residence (household registration, temporary residence permit, or valid residence information)
• Card issuance application form (bank template)
• Documents proving financial capacity may include:
  • Savings account
  • Life insurance contract
  • Property collateral documents
  • Documents related to the sponsor's primary credit card.

Proper and complete application preparation will help students minimize the risk of rejection or prolonged processing times.

6. Important things students need to know before opening a credit card.

Besides the card application requirements, students need to carefully consider the accompanying financial responsibilities. The use of credit cards must ensure the following:

• Pay on time to avoid incurring interest and fees.
• Don't overspend.
• Understand the terms regarding annual fees, interest rates, and statement dates.

Credit cards are only truly beneficial when used for the right purposes and with a clear financial plan.

Opening a credit card for students isn't impossible, but that doesn't mean proof of financial capacity isn't required. Instead of salary income, students can choose suitable options such as supplementary cards, savings accounts, or life insurance, depending on their personal circumstances and the policies of each bank.

For detailed advice, the latest conditions, and to choose the most suitable solution, you can contact SeABank or visit the nearest branch/transaction office for specific support based on your individual case.