Amazon Launches ‘Credit Builder’, a Secured Card with Rewards
Amazon is trying to expand its footprint into the financial market by launching a secured credit card that targets people with limited or poor credit. Consumers who do not qualify for the current Amazon Store Card or Amazon Prime Store Card can now opt for a secured credit card version of these cards through Amazon Credit Builder.
These new cards have no annual fee and can only be used for Amazon purchases. Amazon is offering 5% cash back on certain purchases with these cards, but consumers need a Prime Membership in order to qualify for the rewards. Amazon is partnering with Synchrony Financial on these secured credit cards.
A secured credit card can help a person build their credit score if it is used prudently and reports to the major credit bureaus. With a secured card, the consumer puts up the money for the credit limit. In the case of these Amazon secured cards, this ranges from $100 to $1,000. Users must repay their balances or make minimum monthly payments each month, just like a traditional credit card. Once the account is closed, any money from the initial deposit is refunded after the balance is completely paid off.
Secured credit cards give consumers a chance to build their credit without any financial risk for the card issuer. For Amazon, this also means access to a new sector of the market. Amazon is also rumored to be developing a checking account for the underbanked with JPMorgan Chase.
Interested parties can apply for Amazon Credit Builder online. Applicants must first be considered for a traditional Store Card or Prime Store Card before being reviewed for a secured account. Amazon notes, “Although you are required to submit a dual application that allows you to be considered for both cards, only one inquiry will be placed on your credit file.”