Rewards cards are all the rage these days.
As Apple (AAPL) prepares to launch its exclusive credit card in partnership with Goldman Sachs, Amazon (AMZN) is going a more populist route.
Subscribe to Observer’s Business Newsletter
The e-commerce company just announced it will be releasing a new Amazon credit card for its underbanked customers, particularly those with little or bad credit. The new product will be branded as part of its “Amazon Credit Builder” program, according to a CNBC report.
Synchrony Financial, the bank behind Amazon’s already popular rewards card, will also be spearheading this new initiative. And like Amazon’s existing slew of branded credit cards, this version will also offer rewards to members, such as Amazon’s popular five percent cash back on Prime purchases and a $40 Amazon gift card.
“There’s always going to be people that we can’t give credit to—this is a large population that we weren’t able to reach,” Tom Quindlen, Synchrony’s executive VP of retail card, said. “It’s a new segment of the market.”
The way the “credit” on the card will work is similar to other popular security cards, which banks typically offer young customers or first-time credit card holders. In order to receive a credit limit, customers will need to put down that exact amount—anywhere between $100 to $1,000—as a deposit. “It’s putting credit in the hands of people in a responsible way,” Quindlen said.
The credit builder will then offer customers higher levels of credit cards, depending on their credit standing earned from using the Amazon card.
The card’s debut comes during a busy time of new product releases from Amazon. The company unveiled its highly anticipated Prime Air electric drones last week, which it plans to use for deliveries of packages under five pounds in less than 30 minutes. It’s also in the process of offering one-day Prime delivery in the coming months, an initiative it announced earlier this year.
The “Amazon Credit Builder” program is currently available to apply for through Amazon’s website.
