Amazon has a unique positioning for offering credit. It has 150 million Prime subscribers, millions of users trafficking its platform, and over 2.5 million sellers. Like other retailers, this creates a huge opportunity to offer its customers credit products and financing options. Moreover, its platform for sellers also creates an opportunity to offer business credit.
Amazon’s foray into financial services has always been about building opportunities for spending within the Amazon ecosystem. The company has historically been active in several fintech areas, particularly online payments. Then in 2011, it launched small business lending, and from there started to roll out different credit card products for both its small business and consumer users.
Read more about how Amazon's financing options work and what they have to offer.
- Amazon offers customers several revolving credit options.
- Amazon’s most popular credit cards are the Amazon Rewards Visa Card, Amazon Prime Rewards Visa and the Amazon Store Card.
- Amazon also offers small business credit options, including the Amazon Business Prime American Express.
Small Business Lending
Amazon launched small business lending for its sellers in 2011. Not highly publicized, the lending was offered to sellers somewhat cautiously based on Amazon selling criteria. Since its launch, Amazon’s small business lending has issued over $5 billion to small businesses on its platform. Its offering continues to be on an invitation-only basis.
User Financing through Amazon
Financing is available to Amazon users through three credit card options—the Amazon Rewards Visa Card, the Amazon Prime Rewards Signature Visa, the Amazon Store Card, and the Amazon Secured Card. If approved, applicants receive a credit limit based on their credit score and other screening factors.
The number of Amazon Prime members in the U.S. as of the end of 2019.
The Amazon Store Card
The Amazon Store Card was rolled out first in 2015. It has two iterations. One card is provided for Prime members and the other for non-Prime members.
The Amazon Store Card has no annual fee. It is offered in partnership with Synchrony Bank. Cardholders who have a Prime membership can use the card to get 5% cash back on any purchase made with Amazon.
The Amazon Store Card can only be used on Amazon.
All approved cardholders get an Amazon gift card. Promotional financing and special financing options are available. Customers can choose either Equal Monthly Payments or Special Financing after choosing the Amazon Store Card as their payment method.
Equal Monthly Payments:
- Six-month equal payments financing on purchases of $150 or more
- 12-month equal payments financing on purchases of $600 or more
- 24-month equal payments financing on select purchases
With these options, cardholders make equal payments on purchases made through Amazon at a 0% annual percentage rate (APR) for the duration of the financing period. The required payment under this option is the purchase price including tax and shipping, which is divided equally by the length of financing. So, if you purchase something for $450, you have six months to pay it off. Your payments will be $75 per month or $450 ÷ 6.
Customers who carry a balance beyond the term of the financing incur a late fee until the balance is paid in full. Interest is also assessed on the full promotional balance from the date of the purchase
The other option is Special Financing, which also has three tiers:
- Six-month special financing on purchases of $150 or more
- 12-month special financing on purchases of $600 or more
- 24-month special financing on select purchases of $800 or more
Customers don't pay interest if the entire purchase is paid off within the specified length of time. Monthly minimums are required. Any balance that remains incurs interest and a late fee. The APR is 27.49%, and interest is also assessed on the full promotional balance from the date of the purchase even if you've made payments. This means it's in your best interest to pay off the card before the specified time period, otherwise you'll incur a lot of extra charges.
The Amazon Rewards Visa Card
The Amazon Rewards Visa Card was launched in 2017. It is also offered in two iterations, for Prime and non-Prime members. New cardholders can get an Amazon gift card upon approval. Both cards have an APR that ranges between 14.24% to 22.24% depending on the cardholder's credit score.
The card is available to any registered Amazon customer. There is no annual fee and the card doesn't charge foreign transaction fees. This card is offered by Chase Bank. The Rewards Visa Card rewards cardholders through cash back on multiple levels.
Amazon Rewards Visa cardholders can earn 3% cash back on purchases made through Amazon and at Whole Foods. These cardholders earn 2% cash back on purchases at restaurants, gas stations, and participating drug stores. Rewards Visa cardholders can also earn 1% cash back on any other purchases.
Cardholders with an Amazon Prime membership get approved for the Amazon Prime Rewards Visa Card. These cardholders earn an additional 2% on Amazon and Whole Foods purchases.
Using the cash back can help offset the cost of the yearly Prime membership fee of $119. Prime members who spend about $200 a month or more at Amazon will essentially recover the annual fee.
The Amazon Secured Card
In June of 2019, Amazon launched a secured card to help customers with bad credit. The card is known as the Amazon Prime Store Card Credit Builder. Cardholders must make a required deposit ranging from $100 to $1,000. The deposited amount is also the credit limit. Amazon offers secured cardholders the same benefits as the Amazon Store Card, which includes both the Equal Monthly Payments and Special Financing payment options.
With a strong position in alternative financial service offerings, Amazon also advertises some other notable payments types:
- Amazon Business Card: The Amazon Business American Express Card was launched in October 2018. It offers special perks to business shoppers, including discounts for its Amazon Web Services.
- Amazon.com Corporate Credit Line: A corporate account that allows for multiple users to make purchases.
- Shop with Points: Allows customers to use points accumulated from points cards against their Amazon purchases.
- Reload Your Balance: Load funds to an Amazon gift card to keep a balance for purchases.
Additionally, Amazon has also talked of a checking account option that would build out on its prepaid gift card offering. In November 2019, Google announced its plans for a checking account option, but Amazon has been reticent to make this move.