Have bad credit? Does Amazon have a solution for you (as long as you have the collateral).
The e-commerce giant has a new store credit card targeted at people with less-than-perfect credit scores. In partnership with Synchrony Bank, the “Amazon Prime Store Card Credit Builder” lets people put down a refundable security deposit (yes, like an apartment), which will be used to set the card’s total credit limit. Synchrony will then collect that deposit from you and give you a line of credit.
From there, people can spend money on amazon.com using their new credit from money they footed. Depending on how much money they spend on the card, users get 6, 12, or 24 months of no interest. (If people spend less than $149 with the card, they are not eligible for this promotional financing.)
The card’s APR is 28.24%.
According to WalletHub, the average interest rate for people with fair credit is 22.99%, and the average store credit card interest rate is 25.76%.
This Credit Builder card has the perks of its sibling cards, including no fee and 5% cash back. The idea behind this program is to attract a new swath of customers–that is, people with poor credit–to buy items on Amazon and repay in time, which will increase their credit scores and thus give them the opportunity to get another credit card, one that doesn’t require them to prepay the credit line in full.
This is all part of Amazon’s plan to bring anyone and everyone into its credit program. It’s essentially a subprime credit card option that mitigates the risk for Amazon and Synchrony because they aren’t actually footing the initial money; they only stand to rake in fees and interest once the promotional period is over. Which is to say, it’s another way for corporations to make money off poor people while creating a pathway for them to spend more money.