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Building Credit with Amazon

Credit scores are important. They can determine whether you get a loan or credit card application approved, so if you have a bad score, it can feel impossible to raise it. After all, raising your credit score can be done by making loan and credit card payments on time. But if your low score is keeping you from having a loan or credit card, how are you supposed to improve your credit score?

Amazon is now offering a new program that can help you build your credit history with minimal risk. The secured credit card, Amazon Credit Builder, is designed to help people with poor credit improve their scores.  IO Scout will help you to get answers on all your questions.

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What is Amazon Credit Builder?

Amazon and Synchrony Bank bring you the secured Amazon Store Credit Builder Card, which has a low credit limit, like most credit cards meant to build user credit. The card has a 28% APR, which is also typical for a credit-building card. There is no annual fee, and you can even receive a $10 Amazon gift card after making a deposit on your card.

How Does the Amazon Credit Builder Card Work?

The Amazon Credit Builder Card is a secured card. This means that once your application for the card has been approved, you must make a refundable security deposit equal to the card limit to use the card. That way, you don't spend money you don't have. This minimizes the risk of your credit score dropping any further.

The deposit acts as collateral, which Amazon will take if you are unable to make the minimum monthly payments on your card. This is how Amazon ensures they won’t lose money by allowing you to use the card. It’s also how you establish a line of credit.

Your line of credit is the maximum amount of money you can borrow when using a credit card. If you max out your line of credit, you’ll need to pay off the card before you can use it again. However much money you deposit will be the limit on your Credit Builder Card. 

The deposit is refundable only if you close your account with all your payments made in full. If you have remaining payments on your card when you close it, Amazon will take what you owe out of the deposit.

Paying your Amazon Credit Builder bills works just like any other credit card: you make monthly payments on your account of anywhere from the minimum payment to the full balance of the card. 

Amazon Credit Builder Card vs. Other Cards

There are a few differences to note between the Amazon Credit Builder and other credit cards.

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Credit Builder:

  • Does not charge interest if you make your payments on time and in full
  • Can only be used on purchases made from Amazon
  • Helps Amazon Prime members earn 5% cashback on all purchases made with the card
  • Has financing options for cardholders, such as equal pay and deferred interest plans
  • Gives card owners the option to upgrade to an unsecured credit card after making a certain number of payments on time
  • Also comes with a $10 Amazon gift card as a bonus when you sign up and make a deposit

Other credit cards:

  • May charge monthly interest if you have a balance on your card, even if you made your payment on time
  • Can be used to make purchases anywhere
  • May help cardholders earn rewards when they use the card, such as points, cashback, or airline miles

Is an Amazon Credit Builder Card Worth It?

Determining whether a Credit Builder Card is right for you is based on your individual needs and circumstances. Consider the pros and cons before applying for any credit card to avoid making a mistake that could negatively impact your credit score.

Pros:
  • This card is an easy way to build your credit score if you have no or bad credit
  • No annual fee
  • If you have Amazon Prime, you can earn 5% cashback every time you use the card
  • You won’t be charged interest as long as you make timely payments in full
  • You have financing options available on certain products if you need them
  • Using a secured card is less risky in case your card is stolen
  • If you make timely payments for long enough, you could upgrade to a card that doesn’t require a security deposit and has more benefits
Cons:
  • You can only use the card on Amazon, so you will have to use Amazon frequently to build your credit
  • While the card itself has no annual fee, it may be easier to get approved as an Amazon Prime member, which is not free
  • The 28% APR means that if you miss a payment, you will be charged 28% interest. For reference, that would turn a $150 payment into a $192 payment. This also hurts your credit score
  • If you make a late payment on your financing option, you’ll be charged retroactively for interest on the product
  • Your line of credit will be lower if you cannot make a substantial security deposit up front

Is it hard to get an Amazon credit card?

Getting an Amazon credit card is relatively simple. You just need to follow the application instructions. If you are looking for an unsecured Amazon Store credit card, you will have a difficult time getting approved with no credit history or a bad credit score. 

However, the Credit Builder Card is meant for people with low or no credit, so it should not be difficult to get approval and start building your credit.

Benefits of Amazon Credit Builder 

There are several benefits of being a Credit Builder card owner. Aside from the biggest benefit, the ability to build your credit, these include:

  • Rewards for Amazon Prime members when they use the card
  • Mobile support from Synchrony Bank through the ‘My Synchrony’ app for Android and iOS. It’s easy to use, convenient, and has all the functions the website has
  • Security measures taken by Synchrony protect your data and information
  • Customer service is available through Synchrony 24/7 online, on the phone, or in a live chat

Financing Options with the Amazon Store Credit Builder Card

There are multiple financing options available for certain Amazon products when you use the Credit Builder card. These are good for larger purchases that you’d like to pay for in increments, rather than all at once. 

  • The Deferred Interest financing option is available for qualifying Amazon products. 
  • With Deferred Interest, you will be charged no interest to your account as long as you pay for the product in full within the timeframe given. 
  • Depending on how big your purchase was, this timeframe could be 6, 12, or 24 months. 
  • If you do not pay for the full purchase in that timeframe, you’ll be charged all the interest that accrued over the months. 
  • The Equal Pay financing option allows you to make equal payments each month for 12 months on eligible purchases of $300 or more. 
  • After the 12 months have passed, you will have paid off the purchase in full. 
  • This option also charges no interest as long as you pay off the purchase within the agreed-upon timeframe. 
  • If you do not make the full payment in that timeframe, you will be charged for the interest that has accrued.

Note: purchases made with these financing options do not qualify for the 5% cashback reward for Prime members.

FAQ

Is an Amazon credit card good for building credit?

Yes. The Amazon Credit Builder Card and secured credit cards like it are specifically intended to build and improve credit for people who need it. 

How do I apply for the Amazon Credit Builder Card?

There is no direct application for the Amazon Credit Builder. Instead, you will need to apply for a regular, unsecured Amazon Store credit card, which has a minimum credit score requirement of 640. If your score is lower than that or you have no credit history, you will automatically be considered for the Credit Builder Card by Synchrony Bank.

If you are approved for a Credit Builder Card, you will have 60 days to make the security deposit on your account. Deposits must be a minimum of $100.

How do I cancel my Amazon Credit Builder Card?

You can cancel your card any time by contacting Amazon and closing your Credit Builder account. Once the account is closed, you can apply for a refund of your security deposit. 

Remember that Amazon will take any unpaid balance on your credit card out of your deposit, though. If you want the full deposit back, wait until your card has a $0 balance before closing the account.

Can you get approved for an Amazon credit card with bad credit?

Yes. A regular Amazon Store credit card has a minimum credit score requirement that all applicants must meet to get approved. If you have a poor credit score, you will likely not be approved for this type of unsecured card. But the secured Credit Builder Card is meant to help people who have bad credit, so it's possible to be approved for this card with a bad credit score. 

What credit score do I need for an Amazon credit card?

An unsecured Amazon Store credit card requires cardholders to have a credit score of 640 or higher. If you have a credit score lower than that, you will only qualify for the Amazon Credit Builder Card.