New Amazon Credit Card: What Lies Behind Its Intro 0% APR
This week Amazon in cooperation with Synchrony Bank came out with their new Amazon Credit Builder credit card. It is not difficult to guess that the card is aimed at people who need to build or rebuild their credit. So, what is offered to them and is it really worthwhile?
What are the Terms?
Let’s start with the charges. It cannot but rejoice that the Amazon Credit Builder has a $0 annual fee and a 0% intro APR for purchases during 6, 12 or 24 months depending on the purchase amount.
Another pleasant moment is that Amazon didn’t leave their cardholders without rewards. All Eligible Amazon Prime members will earn 5% cash back on Amazon.com purchases and purchases made at physical Amazon locations. These rewards can be redeemed either for eligible purchases at Amazon.com or as a statement credit with 1 rewards point being equivalent to $1. In addition, new cardholders will receive a $10 gift card after account opening.
Besides the listed above, the Amazon Credit Builder card can help improve your credit as not only it reports to the three major credit bureaus, but also provides you with the access to TransUnion® CreditViewTM dashboard where it is possible to view your VantageScore® credit score for free and to a simulator tool to understand how different activities can affect that score.
Are There Any Hidden Catches?
The main thing to know about the Amazon Credit Builder is that this card is secured. Therefore, you will have to put a security deposit on it before it is activated. It is very unusual for store cards which are typically unsecured. But with the new Amazon card, you should be ready to deposit the amount between $100 and $1,000 that is to become your credit line. Be careful with that, since you won’t be able to change this limit in the future.
However, that’s not all. Yes, as it was mentioned, you will bear no interest on purchases if you pay your balance in full within the promo period. But there are three significant additions to this condition. First, note that 6 months offer applies only to purchases between $149 and $598.99; 12 months offer – to purchases between $599 and $798.99; and 24 months offer – to select purchases of $799 or more. Second, if the balance is not paid in full within the relevant period, interest will be charged to your card from the very purchase date. Third, the standard variable purchase APR is 28.24% that is really high.
To sum up, the Amazon Credit Builder credit card may be an attractive offer for Amazon shoppers with not so good credit. Nevertheless, there are some pitfalls that can outweigh all the benefits. All in all, no one can know better than you whether this offer is suitable for you or not. But always keep in mind there is a promotional period and follow the rule to pay all your bills in full, so as not to be faced with a huge interest.
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