5 Things to Know About the Amazon Secured Card
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It’s not hard to find a retail store that offers its own credit card. What’s not as common is a secured store credit card that gives you a chance to mend your credit, which is what the Amazon Secured Card offers.
Issued by Synchrony Bank, it’s a more flexible credit-building option than a traditional store credit card, since you can buy pretty much anything and everything at the online mega-retailer.
Here are five things to know about the Amazon Secured Card.
1. It can be used only at Amazon
The Amazon Secured Card is a closed-loop card, which means that it can be used only at Amazon.com or Amazon physical stores.
Some retail stores offer open-loop cards, meaning that the card also bears the logo of a payment processor like Visa or Mastercard and can be used virtually anywhere.
In fact, Amazon itself also offers open-loop credit card options, like the Prime Visa.
2. Fees are reasonable …
As with most other store credit cards, you won’t pay an annual fee to carry the Amazon Secured Card. But unlike many retail credit cards — which charge notoriously steep interest rates on any balance you carry — the Amazon Secured Card charges a fixed 10% APR.
You should always aim to pay off your credit card bill in full each month, especially when building your credit. But if you must carry a balance for a time, a 10% APR isn’t sky-high.
You’ll pay a $5 fee for any late payments, which is also much lower than many other cards. (But if you pay too late, your credit scores could still suffer.)
3. … But a deposit is required
Secured credit cards require a security deposit to be held as collateral for the account while you build your credit, and the Amazon Secured Card is no different.
You have some flexibility in choosing how much deposit you’ll put down, with a $100 minimum. That means if you’re approved for a $500 credit limit, you can deposit any amount (in $50 increments) between $100 and $500.
Your deposit equals your credit limit, so if you deposit $500, your limit will be $500. The deposit will be held until you either close your account in good standing or upgrade your card to a traditional unsecured credit card.
4. There’s a path to an unsecured version
If you use the card responsibly for one year — which typically entails making payments on time and, ideally, in full — you may be eligible to convert your Amazon Secured Card to an unsecured version. If you choose to convert, you’ll get the security deposit back once the balance on the card is paid off.
The Amazon Store Card that you’ll receive if you convert is also a closed-loop card, meaning it also can be used only at Amazon. It offers special financing deals and pay-over-time options, and it doesn’t charge an annual fee.
» LEARN MORE: Can I change a secured credit card to an unsecured card?
5. Only Amazon Prime members earn rewards
The Amazon Secured Card does not offer any rewards, except to Amazon Prime members. (A Prime membership costs $139 a year, or $69 annually for a student membership.)
Prime members will earn 2% back on all eligible Amazon purchases. If you choose to convert to the unsecured Amazon Store Card when eligible, you’ll earn 5% back.
If you’re an Amazon loyalist and already a Prime member, this secured credit card can be a good option to earn rewards while building your credit. Many secured credit cards offer no rewards at all.
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