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- The Amazon Prime Secured Card is geared toward cardholders with bad credit, so you're required to put $100 to $1,000 as collateral to get this card.
- Despite the security deposit requirement, this card offers unique benefits, like no annual fee with a Prime membership and 2 percent back on Amazon.com purchases.
- There are other benefits to using this card as well, like a low promotional APR and the ability to upgrade after responsible use, but it may not be the right card for everyone.
If you want to build good credit, it takes time and effort to do so. And, that’s especially true if you’ve made a few mistakes with your credit in the past, as there can be a lot more hurdles to clear when you have blemishes on your credit report.
But there is one niche of credit cards — secured credit cards — that is geared toward those who need a little help building credit but can’t get approved for the best unsecured card options on the market. Secured credit cards, like the Amazon Prime Secured Card, require you to put down a cash deposit as collateral in order to “secure” a line of credit you can borrow against. Secured credit card issuers then report your credit movements to the three credit bureaus, which helps you improve your credit score over time.
That said, one major downside of secured credit cards is that they come with very few cardholder benefits, and the Amazon Prime Secured Card is no exception. While the Amazon Prime Secured Card* has no annual fee and offers 2 percent back on Amazon.com purchases (with an eligible Amazon Prime membership), you won’t get the same perks as more premium rewards credit cards like the Amazon Prime Rewards Visa Signature*.
Amazon Prime Secured Card benefits
Ultimately, the Amazon Prime Secured Card is for people with bad credit or no credit who want the chance to improve their score and overall credit health over time. Before you decide to apply, it may be helpful to know about the Amazon Prime Secured Card benefits you can qualify for.
No annual fee with Prime membership
This secured credit card doesn’t require an annual fee if you’re an Amazon Prime member. While Amazon Prime membership will set you back $139 per year, you get benefits like free two-day shipping on eligible items, free access to Amazon movies and shows, access to music and exclusive deals and more.
You do have to put down a security deposit of $100 to $1,000 as collateral to get this card. However, like with all secured credit cards, the deposit is fully refundable when you close your account or upgrade your card in good standing.
Earn 2% back on Amazon.com purchases
Cardholders earn 2 percent back on Amazon.com purchases made with the card, and these rewards do not expire as long as the account is open. Rewards can be redeemed for more Amazon.com merchandise or for a statement credit on your account.
With a rewards rate of 2 percent back, you will essentially earn $2 in merchandise or cash back for every $100 they spend on the card.
Free credit-tracking tools
Cardholders also get access to a TransUnion CreditView Dashboard that lets them track their credit score and progress over time. Since the point of getting a secured credit card is improving credit, this tool can prove immensely helpful over time.
Low ongoing APR
While the Amazon Prime Secured Card does not have a traditional 0 percent intro APR, it does offer a low fixed APR of 10 percent, which is not variable. This interest rate is significantly lower than the average credit card interest rate charged right now.
0% APR offers
Note that cardholders can opt out of earning rewards in favor of securing promotional 0 percent APR offers instead. That said, these offers may only be extended for specific purchases, and they set you up on a fixed monthly payment plan that has you paying off your balance by the time the promotional APR offer ends.
These offers also charge fees if you don’t pay your balance off before the intro APR offer ends. On top of that, you’ll have to pay the regular APR of 10 percent on remaining balances.
Generally speaking, Amazon’s promotional APR offers are extended in increments of six, 12, or 24 months.
Ability to upgrade to the Amazon store card later on
Finally, the card issuer (Synchrony Bank) says they may consider letting you upgrade to the unsecured Amazon Store Card* in as little as 12 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.
Maximizing the Amazon Prime Secured Card
While the limit on your Amazon Prime Secured Card can only be for up to $1,000, you can still use this card to earn considerable rewards and boost your credit in the meantime. The following tips can help you accomplish both goals.
- Pay your credit card bill on time each month. Your payment history is the most important factor that makes up your FICO credit score, so you’ll want to make sure your bills are paid early or on time each month with no exceptions.
- Keep revolving debt at a minimum. Most experts suggest keeping your credit utilization ratio at 30 percent of your available credit or lower. This means never carrying a balance over $300 if your credit limit is $1,000.
- Redeem your rewards for items you need the most. Redeeming rewards for items you need can help you reduce household spending. Fortunately, Amazon.com lets you buy anything from deodorant to dish soap to toothpaste.
- Upgrade your card in as little as 12 months. Finally, you will become eligible to upgrade to another Amazon credit card, the Amazon Store Card, in as little as 12 months. If you take advantage, you’ll earn 5 percent back on Amazon purchases with no annual fee. You’ll also get your security deposit back at this time.
The bottom line
The Amazon Prime Secured Card 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 and access Amazon Secured Card benefits all along.
Just remember, you’ll have to put down a cash deposit as collateral, and 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 12 months.
*The information about the Amazon Prime Secured Card, Amazon Prime Rewards Visa Signature Card and Amazon Store Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.