Amazon announced Monday he partnered with Synchrony Financial to create what he considers to be the “Amazon credit creator” for subscribers looking to build or rebuild their credit scores. Cardholders will enjoy the same perks as the Amazon Store card – such as 5% cashback for online purchases and no annual fee – but customers must be Prime members, paying the annual membership fee of $ 119 d ‘Amazon.
Those accepted for Amazon Credit Builder will need to make a security deposit within 60 days to receive a “welcome gift card”. The deposit will be refunded if someone closes their account or switches to the Amazon Store card. Those who are accepted but decide to opt out will not have their credit history affected by their decision.
While some applauded Amazon’s latest credit card launch, others wondered if it would really benefit unbanked or underbanked people.
Sanders, in particular, was quick to castigate the e-commerce giant’s “Credit Builder” promotion, pointing out that it had a very high interest rate – 28.24% -.
“Can you believe it? Amazon is issuing credit cards with 28% interest rates to ‘help’ people with bad credit,” the Vermont senator, one of the Democratic presidential race favorites, tweeted Wednesday from 2020.
The 77-year-old has vowed that he and Ocasio-Cortez will destroy the new card.
“This kind of greed makes the poor even poorer and @AOC and I intend to ban it. Companies will have to survive with a 15% cap on interest rates, ”he continued in the tweet, which Ocasio-Cortez then retweeted.
However, the self-proclaimed Democratic Socialists are not the first to point out the high interest rate.
Ted Rossman, industry analyst for CreditCards.com, admitted earlier this week that it was a “risk” to be aware of. But he said cardholders will benefit from the card as long as they pay their bills on time.
Ultimately, Rossman said it was a “solid option” for people new to credit or looking to improve their credit.
“This is a very unique card, between the secure nature, the 5% cash back offer and the two different flavors of 0% interest (either 12 months of equal payments or periods of 0% from 12/6/24 months for certain purchases), ”said Rossman. “If used correctly, this card can help you improve your credit while saving on interest or pocketing cool cash back on items you would (hopefully) buy anyway.”
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Tom Quindlen, Executive Vice President of Synchrony told CNBC the new card allows the financial group “a new segment” of the market
“It’s putting credit in people’s hands responsibly,” he insisted.
It’s not the only time Amazon has been targeted by politicians this week.
Katherine Lam of Fox Business contributed to this report.