Amazon launches Credit Builder card for 'underbanked' customers
The online retailer is offering a credit card to 'underbanked' customers with bad credit.
Amazon partnered with Synchrony Financial to create the Credit Builder card. The card is for ‘underbanked’ customers who want to repair their credit.
Amazon Credit Builder card details
Amazon already has the Amazon Prime credit card for customers. The Amazon Store Card Credit Builder is similar to the Amazon Prime card with an interest rate at 28.24% and 5% cash back rewards on purchases. However, customers have to make a security deposit of $100-$1000 to open the secured Credit Builder card. The amount that consumers deposit is the Amazon Credit Builder card’s credit limit.
Benefits of the card include no annual fee and financial literacy tips sent to consumers as they use the card. Once customers pay off the balance of the Credit Builder card, they’re eligible to apply for an unsecured card with a higher credit limit.
Why is Amazon offering a credit card to the ‘underbanked?’
The card could be popular with US consumers that are ‘underbanked’ with bad or no credit. A 2017 Federal Deposit Insurance Corporation (FDIC) survey found that 25% of US households either have low credit scores or no bank account.
Tom Quindlen, chief executive officer (CEO) of Synchrony’s credit card division, explained that Amazon wants to extend credit to a new customer base.
‘There’s always going to be people that we can’t give credit to — this is a large population that we weren’t able to reach. It’s a new segment of the market,’ said Quindlen.
‘It’s putting credit in the hands of people in a responsible way,’ added Quindlen.
What do credit card experts say about Amazon’s Credit Builder Card?
Ted Rossman, a credit card analyst, said that the Amazon Credit Builder card could help customers rebuild their credit.
‘If used properly, this card can help you improve your credit while saving on interest or pocketing an attractive cash back return,’ said Rossman.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on stock opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
