Will a credit builder program create a new legion of loyal Amazon shoppers?
Amazon.com has launched a new program with Synchrony that the two companies say is designed to help people who have no credit history or want to rebuild their credit scores do so responsibly. Prime members will also gain access to five percent cash back on orders placed on the e-tailer’s site as well as financing options on eligible purchases.
Amazon Credit Builder is a secured card with a credit line equal to a security deposit put down by each cardholder. The deposit, from $100 to $1,000, is similar to those used to rent an apartment. It cannot be used for purchases made from Amazon and is refundable at the point when a person’s score has reached a level enabling them to achieve unsecured credit status. Members of the program may be eligible to upgrade from Credit Builder to the Amazon Store Card in as little as seven months. The interest rate for the card is 28.24 percent.
According to FICO data, the average American’s credit score is 700, although 11.5 percent have scores between 300 and 549. While providing consumers with an opportunity to establish or raise their credit scores, Amazon Credit Builder also provides access to free tools, such as the TransUnion CreditView Dashboard, and tips on how to maintain strong credit.
“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,” Tom Quindlen, executive vice president and CEO of Synchrony’s retail card business, told CNBC. “It’s a new segment of the market.”
- Amazon Prime Store Credit Card Builder – Amazon.com
- The CreditView Dashboard – Amazon.com
- The Road to Building Good Credit – Amazon.com
- Here’s What American’ FICO Scores Look Like – How Do You Compare? – The Motley Fool
- Amazon launches a credit card for the ‘underbanked’ with bad credit – CNBC
DISCUSSION QUESTIONS: Do you think a large number of people with bad credit or no credit will be attracted to the Amazon Prime Store Credit Card Builder program? What do you think Amazon expects the eventual payoff to be from this effort?