E-commerce giant Amazon.com Inc. (AMZN) has partnered with Synchrony Financial (SYF) subsidiary Synchrony Bank to offer secured credit cards to shoppers with low credit scores or no credit history.

Known as the Amazon Credit Builder Card, it can only be used on Amazon purchases, has no annual fee, and requires customers to make a refundable security deposit of at least $100 within 60 days of their application being approved. This deposit amount is the card holder's credit limit, and cardholders can enjoy all the same perks as those with Amazon.com Store Cards also issued by Synchrony, like promotional financing and 5% cash back on all purchases.

The new secured versions of Amazon's credit cards lets customers build credit, with Synchrony Bank reporting to three major credit bureaus whether minimum payments are made on time each month. Also included in the offering is access to free credit score monitoring and simulator tools.

An upgrade to an Amazon.com Store Card is possible after seven months if a cardholder makes seven consecutive on-time payments on their card over 12 months, has a credit file with no recent bankruptcy, foreclosure, repossession or delinquency events, and has a credit score which meets Synchrony’s underwriting criteria.

This isn't the first time Synchrony has teamed up with Amazon. It issues other Amazon credit cards and in May last year announced cardholders can check their account information, review recent purchases and charges, get payment due details and pay their bills through voice commands to their Alexa devices.

First of Its Kind

While retailers offering credit cards isn't rare, Amazon may just be the first retailer to offer a secured credit card. Ted Rossman, industry analyst with CreditCards.com, told MarketWatch, “I’ve looked at hundreds of retail cards, and I can’t recall ever seeing a secured retail card.”

The Credit Builder Card is available to all U.S. residents over the age of 18 with a social security number or individual taxpayer identification number. The higher-than-average APR of 28.24% notwithstanding, the new card is the retail behemoth's way of encouraging low-income and unbanked or under-banked Americans to spend more on its platform. It's important to note that 11% of the U.S. population has a FICO score below 550, according a 2018 survey.

The company's latest move also makes sense considering digital shopping and Amazon are especially popular among young people struggling with record-levels of student debt. Emarketer estimates that 84.8% of millennials will be digital buyers this year, compared with 77.5% of Generation X and 59% of Baby Boomers, and Amazon is a major beneficiary of this. Consumer credit reporting company Experian has said millennials have one of the lowest average credit scores of any generation. In the last quarter of the 2018, people belonging to this group had an average FICO score of 665, compared with the national average of 701. "Weighed down by student loan debt and maturing on the heels of the 2008 economic crisis, millennials—people between ages 23 and 38—have had a tough time getting ahead financially. Held back by their credit scores, some millennials have struggled to obtain new credit and, as a result, may be finding it hard to reach certain financial milestones," said an Experian report.