Building good credit takes time and effort, and that’s particularly true if you have made credit mistakes in the past. But one niche of credit cards—secured credit cards—are actually geared to people who need to take on this monumental task.
With a secured credit card, you put down a cash deposit as collateral in order to “secure” a line of credit you can borrow against. In the meantime, the secured card issuer reports your credit movements to the three credit bureaus, which helps you improve your credit score over time.
If you have heard of the Amazon.com Store Card or the Amazon Prime Store Card, you should know that the Amazon.com Store Card Credit Builder and Amazon Prime Store Card Credit Builder are secured versions of these cards. This means that, with an Amazon Credit Builder account, you can get some of the benefits of Amazon.com store credit cards without having the good or excellent credit rating you would normally need to qualify.
Details of the Amazon Credit Builder accounts
|Amazon.com Store Card||Amazon Prime Store Card|
|Earns rewards||No||5 percent back at Amazon with an eligible Amazon Prime membership, or choose promotional financing instead. Also, earn 5 percent to 15 percent back on select items throughout the year|
|Requires Amazon Prime membership||No||Yes|
|Promotional financing offers||Yes||Yes|
|Issued by||Synchrony Bank||Synchrony Bank|
How does the Amazon Credit Builder work?
Both Amazon Credit Builder accounts work just like any other secured credit card. When you apply, you put down a cash deposit as collateral, which secures the new line of credit you have access to. According to Amazon.com, you have to initiate your security deposit submission within 60 days of opening your account, and you can facilitate this transaction via an electronic funds transfer from your bank or by sending a check or money order to Synchrony Bank.
Remember that your security deposit is only used as collateral, so you will get it back by mail when you close your account in good standing or upgrade to an unsecured version of your card.
The biggest difference between Amazon Credit Builder accounts and other secured credit cards from Visa or Mastercard is the fact that Amazon Credit Builder cards can only be used for eligible purchases. Amazon.com says the following retailers are eligible merchants for your Amazon Credit Builder account:
- Amazon Business
- Amazon Prime membership
- Amazon Go
- Amazon Bookstore
- Amazon’s 4-star stores
- Alexa Skills
- Amazon Pay
- Amazon Fresh
How to redeem your rewards points
If you sign up for the Prime version of the Amazon Credit Builder account, or the Amazon Prime Store Card, you’ll earn 5 percent back rewards on all your eligible spending, as well as 5 percent to 15 percent back on select purchases throughout the year. When it comes to redeeming your rewards, you have the option to cash them in for a statement credit to your account or for any Amazon.com purchases you want to make.
What credit score do you need for the Amazon Credit Builder?
Since Amazon Credit Builder accounts are essentially secured credit cards, you can qualify if you have poor credit or no credit history. Just remember that you’ll have to put down a cash deposit as collateral and that you can only use your card for eligible Amazon.com purchases.
Pros and cons of the Amazon Credit Builder
Amazon Credit Builder cards come with some serious benefits, but you’ll also want to think over the downsides that come with this type of financial product. If you’re wondering if the Amazon Credit Builder account is right for you, here are some pros and cons to consider:
- Reports to the three credit bureaus: Amazon.com guarantees that “Synchrony Bank will report to the major credit bureaus whether you make at least the minimum payment due on time every month.” They also state that “building a history of on-time payments can help build your credit.”
- Potential to earn rewards on spending with Prime membership: If you’re an Amazon Prime member already or you want to pay for a membership, this version of the Amazon Credit Builder account makes it easy to earn rewards on your spending.
- Chance to upgrade your card later: Synchrony Bank says they may consider letting you upgrade to the unsecured Amazon Store card in as little as seven months when you make seven on-time payments on your card and don’t fall behind on other bills. You must also be free of recent bankruptcies, foreclosure, repossession and delinquent accounts to qualify.
- No annual fee: You won’t have to pay an annual fee to build credit with an Amazon Credit Builder account.
- Card isn’t useful for emergencies: Since the Amazon Credit Builder is a store card, you cannot use it for emergencies like you can with other secured credit cards. For example, you cannot use your Amazon Credit Builder account to pay for emergency car repairs or cover your utility bills when cash is tight.
- Cash deposit required to get started: You have to put down a cash deposit as collateral with this product, just like you do with other secured credit cards.
- Rewards for Prime version come with limited redemption options: While the rewards you can earn with the Prime version can be lucrative, you can only redeem them for statement credits or stuff from Amazon.com.
Is the Amazon Credit Builder right for you?
The Amazon Credit Builder is a really good option for consumers who fit a few unique categories. Consider signing up for this card if you:
- Have poor credit and you cannot get approved for an unsecured credit card
- Don’t mind putting down a cash deposit as collateral
- Shop on Amazon.com all the time anyway
- Pay for an Amazon Prime membership and want to earn rewards
If your credit score is in the “good” range, meaning you have a FICO score of 670 or higher, then you should consider unsecured credit cards instead. In fact, you may even be able to qualify for some of the best credit cards on the market today.
With good credit, you could even consider the Amazon Prime Rewards Visa Signature Card, which lets you earn 5 percent back at Amazon.com and Whole Foods Market, as well as 2 percent back on purchases with restaurants, gas stations and drugstores. You also earn 1 percent back on all other purchases made with this card and get the benefit of a traditional Visa credit card (meaning you can use it at millions of retailers and merchants around the globe).
Alternatives to the Amazon Credit Builder
If you’re on the fence about an Amazon Credit Builder card but you have poor credit, you should know there are plenty of other cards to consider. We suggest comparing all the top secured credit cards on the market today, including ones that let you earn rewards on your spending.
With the Discover it® Secured Credit Card, for example, you can earn 2 percent back at gas stations and restaurants on up to $1,000 in combined spending per quarter (then 1 percent), as well as 1 percent back on all other purchases. There’s no annual fee, and Discover will also match all the rewards you earn the first year.
The benefit of picking a secured Discover credit card is the fact that you can use it to shop anywhere Discover is accepted, including Amazon.com.
The bottom line
An Amazon Credit Builder account can help you build credit as you shop on Amazon.com. If you have a Prime membership, you can even earn Amazon.com rewards for each dollar you spend.
Just remember you’ll have to put down a cash deposit as collateral, and that you can only use your card with a limited number of Amazon-affiliated stores. If you can accept these minor downsides, you may be able to build your credit enough to upgrade to an unsecured Amazon.com store card in as little as seven months.
All information about the Amazon Prime Rewards Visa Signature Card, Amazon.com Store Card Credit Builder and Amazon Prime Store Card Credit Builder has been collected independently by Bankrate.com and has not been reviewed or approved by the issuer.