Amazon Considering a Credit Card Breakup with Chase

Amex and Synchrony Financial Are Bidding to Take Over the Portfolio

Amazon is reportedly fielding bids to replace Chase as the issuer for its Amazon Prime Rewards Visa Signature Card and Amazon Rewards Visa Signature Card. American Express, which issues the retail giant's business credit cards, and Synchrony Financial, which manages the Amazon store card portfolio and a secured credit card, are both in the running. According to people familiar with the matter, Chase is willing to part with the Amazon rewards card portfolio.

Key Takeaways

  • Amazon may soon have a new issuer for two of its popular credit cards. 
  • Chase and Amazon began their partnership almost two decades ago, but the online retailer has since established relationships with American Express and Synchrony Financial on other credit cards. 
  • Amex and Synchrony are reportedly interested in expanding their relationship with Amazon, while Chase is willing to walk away.

Amex and Synchrony Financial Fighting for Amazon's Business

The first Amazon-branded credit card was released in 2002 in partnership with Chase, but now both are considering ending their relationship.

According to a Bloomberg report, Amazon is fielding bids from American Express and Synchrony Financial to take over the Amazon Prime Rewards Visa Signature Card and Amazon Rewards Visa Signature Card portfolio. 

The two cards hold more than $15 billion in loans, and cardholders are spending more than $50 billion per year with them, in total.

Those figures are sure to be appealing to bidders, but the cost associated with the rewards program may be why Chase is willing to part ways with the massive line of business. 

Amazon Prime members, including 147 million Americans, can earn 5% cash back on every purchase they make at Amazon.com and Whole Foods Market. If you're not a Prime member, the rewards rate is 3%. 

Cardholders also get 2% back at restaurants, gas stations, and drugstores, and 1% back on everything else. But if they are primarily using their cards to shop at Amazon and Whole Foods Market, Chase may be having a difficult time turning a meaningful enough profit on the portfolio. 

For Amazon, Amex or Synchrony may seem like a natural fit because it's already partnering with them on other cards. Amex, for instance, offers two business credit cards, and Synchrony manages the retailer's store cards, which were launched in 2015. Synchrony also debuted an Amazon-branded secured credit card in 2019.

Article Sources

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  1. Bloomberg. "Amazon Explores Replacing JPMorgan in Credit-Card Tie-Up." Accessed June 13, 2021.

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