Amazon has just announced the launch of its very own secured credit card, in partnership with Synchrony Bank, to reach out to its customers who are not yet eligible for a regular credit card, or those who have bad credit history. It is part of the e-commerce giant’s “Amazon Credit Builder” initiative, which is a plan to reach out to people who had been deemed not eligible for credit from banks.
A secured credit card is a type of credit card that holds an amount which is equal to the credit limit, as collateral to be recovered in the event of the holder of the card not being able to back. For example, if a person wants to avail this type of card with a credit limit of $1000, he or she will have to pay a deposit of $1000 to avail it.
Experts have concurred that this is a good way of putting credit within reach in a responsible way for millions of people. Using such a card, Amazon can reach out to several million potential customers who cannot avail a conventional credit card. Moreover, users who utilize Amazon’s secured credit card can also build up their credit score and become eligible for the more conventional Amazon store card. The credit building card provides cash back of 5%, which would be a good incentive for Amazon shoppers to use it.
With room for growth in the US shrinking for Amazon, this credit card is an excellent way for the e-commerce behemoth to extend its outreach to previously overlooked customers.