Table of Contents
Like any other regular credit card, Amazon’s credit card is not any different. It provides the same credit line to its customers, which is equivalent to the deposits made by the customer or the cardholder to the bank chosen by Amazon, which is Synchrony bank. Once the card is issued, you will definitely utilize it for purchasing and other things. It will help you in building your credit score by the monthly payments made. Keep in mind that only the on-hand customers of Amazon can use the option of utilizing Amazon credit builder, and you can not swipe the card other than Amazon or to put it this way, you can only use the card at Amazon.
Moreover, the usage of the card gets even more cramped because, on Amazon, the card can only be used for purchasing from a definite number of retailers who offer “pay with Amazon” this can be indicated by the printings on the card.
Suggested Read: Remove Paid Collections From Credit Report
Mechanism of Amazon Credit Builder
Amazon credit builder has a sort of mechanism in which it automatically keeps its customer from getting in debt or trouble. It makes you pay refundable security deposits right after the submission of the application. These deposits perform as collateral. Now the question arises what collateral is? If a customer falls short on making the payments guaranteed, in such a case, Amazon starts consuming from security deposits which it uses in overtaking the losses, and they are your credit line as well.
The pinnacle amount or the limit of the amount that you can borrow through your card is called a credit line or line of credit.
No Huge Deposits
A benefit not offered by many others, which is Amazon credit builder necessitates no big deposits. The lowest deposit is 100 dollars, whereas other cards require a deposit of at least 200 dollars. The advantage of the low deposit is that Amazon credit builder can gain the trust of their customers easily. There is even a deposit even lesser than 100 dollars, and the minimum offered is 49 dollars. However, this all relies on your credit.
Ranges of Credit
The amount deposited is the limit of the credit card, and if you make a purchase of 10 dollars. Then they will deduct just 10 percent from the credit in hand. For instance, if you deposit an amount of 100 dollars. Then they will only allow the credit limit of 100 dollars. The more you deposit, the more they grant you. If you purchase the 10 dollars worth of product, then they will subtract the same amount of credit.
The maximum amount of credit enjoyed by the customers is 1000 dollars, less in comparison to its substitute cards. There are alternatives proposals present which can amplify the amount up to (2,500) by using Citi secured MasterCard, and up to (5000) by Green dot primor, MasterCard and Gold secured credit card.
Despite the limit, the current center of gravity is a credit score. Utilize as much credit as possible. If you are eligible to make large deposits, then go for it because it boosts your credit.
Credit card companies have begun to assist users with low credit limits. If you’re having trouble, get the Milestone Gold Card here.
Leverage of Being a Prime Member
There is a difference between a local customer and a VIP. VIPs are always offered some additional services as compared to the locals and enjoy its benefits.
The same is the case between an ordinary member and an Amazon prime member. Prime members are offered a reward rate of 5 percent by Amazon credit builder. The additional rate of 5 percent offers an increase in reward points. Which are obtained or achieved on each purchase you make. These points can be used in purchasing from Amazon. Suppose you wish to buy a certain product, you will be offered to purchase the product in terms of certain points, depends on the price of the product, or will give a discount in exchange for points.
The expiration of Amazon points is not something to be worried about, and you can collect them for as long as you want or to the desired amount. Now to answer the question which everyone has been waiting for, can these points be claimed as cashback? No, they cannot be claimed as cashback and can only be utilized for the above-mentioned purposes. Sorry for ruining those dreams.
What Makes Amazon Credit Builder Different
The comparison is between regular credit cards and Amazon credit builder, all the pros and cons and goods and flaws and every single detail will be discussed in this comparison so that it can be made clear if it is better to possess an Amazon credit card or regular credit card.
Regular Credit Cards
First, let’s discuss regular credit cards. The credit card does not have any resemblance to debit cards. The money in the debit card is owned by the account holder. Each time the card is swiped, the amount is deducted from the account of the holder, and no interest is charged. Such is not the case with credit cards. The money brought into play while utilizing a credit card does not come from the account or prepayments.
A matter of fact is it is provided by the bank. The meaning of the word credit is loan. It’s a sort of short-term loan taken by the bank. There are various cards that contain various credit limits and are given to customers on-demand according to their financial situation. At the end of the month, you have got to pay the amount utilized from the card during the month with a charge of significant interest. This way, you take a loan from the bank to satisfy your needs and weave it off at the end of the month.
Amazon Credit Builder
The first major difference is that there is no interest charged, unlike credit cards, if the payments are complete and made within the due dates. Unfortunately, if the payment couldn’t be made in the time, the interest is charged, but Amazon still awards the customer by providing equal payment plans and adjourns the interest. The second difference is sort of a disadvantage that Amazon credit builders are only used on Amazon. They are not like credit cards which can be used anywhere, even on Amazon.
The point to be noted over here is, Amazon credit builder is Amazon’s exclusive, so it will definitely have certain advantages which only Amazon prime members will enjoy since it is from Amazon itself. A prime member who uses Amazon credit builder will enjoy a cashback of 5 percent on each purchase, another benefit credit card users are deprived of. Users who are approved are awarded 10 dollars gift by Amazon. Later on, if the customer is consistent in making sufficient payments on the due date, then finds the opportunity to promote to an unsecured card.
Fees of Amazon Credit Builder
The term “FEE” is a concern of many people. If you are with Amazon, then it does not worry you because Amazon does not charge annual fees, unlike other secured cards because 50 dollars are charged by the customer each year. This might be the reason that people will choose Amazon credit builder over another card.
Conclusion
To be honest, no one can tell which of the two options is better. It all depends on the person and his situation. For instance, if a person has a critical financial situation, then opting for Amazon credit builder will be best, and if a person wants to get credit facilities on pretty much everything, then a credit card is the option. Still, the decision is for the user to take.
FAQS
Can you cancel the card?
Yes, you can cancel the card. All you have to do is contact Amazon close the account and apply for the refund of the security deposit.
Does bad credit impact?
Yes, bad credit does impact in result you won’t be granted Amazon credit builder.
To overcome credit, a builder is granted, which can be used to improve credit and will eventually give the possession of an unsecured credit card.