If you have a credit card, then it is possible that the financial institution has offered you an extension of it. If you want to know what a credit card extension is and what its benefits and disadvantages are, do not forget to read this article.
It is possible that under certain circumstances you may find it convenient for a family member to use your credit card. The typical case is that of your spouse, who collaborates in the tasks of purchases required at home. Another common case is when you have a child, who is still financially dependent on you, studying outside the home. But, as you well know, only you can use the credit card you own. Therefore, it is not possible for any of your family members to use it, however convenient it may be.
However, there is an alternative in this case: request an extension of your credit card.
What is a credit card extension?
A credit card extension is an additional card that your financial entity issues to your family members. Issuance only occurs if you expressly request it and, in addition, you meet a series of requirements given by the entity. Purchases made with the additional card will be reflected in your statement. In other words, for the purposes of the entity, they will be credits whose payment you automatically assume.
Each entity has its own requirements when issuing credit card extensions. One of the most common is that it is a direct relative of the holder.
What benefits does a credit card extension grant?
• Allows family members to be covered with a credit line, which they can use in case of an emergency.
• Help with the financing required by children when they are pursuing higher education away from home.
• It allows family members to understand how these credit instruments work, experience that will be useful to them in the near future.
What disadvantages does a credit card extension have?
• Prevent your family members from building their own credit history, which is important when applying for loans.
• You, as the cardholder, are responsible for paying the debt incurred using the additional cards.