Amazon (NASDAQ:AMZN) has its sights set on consumers with poor credit or no credit with its new credit card, which is similar to its other loyalty programs in many ways despite having this caveat.
The Bellevue, Wash.-based online retailer announced a partnership with Synchrony Financial to roll out “Amazon Credit Builder,” which is a program that helps shoppers with bad or limited credit as these consumers don’t have access to other loyalty cards with the business.
“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, who serves as the Synchrony executive vice president and CEO of its retail card operation, told CNBC. “It’s a new segment of the market.”
Much like other e-commerce loyalty programs such as the Amazon Store card, the Credit Builder programs offers Prime members 5% cash back on purchases. The rewards cards are geared to help shoppers stick to Amazon instead of other e-commerce sites, incentivizing customers to become more loyal to the brand with rewards.
A 2018 FICO survey revealed that more than 11% of the U.S. population has a credit score below 550, while roughly 4% of the population has a “bad credit score,” which is between 300 and 499, per the FICO Score.
What do you make of Amazon’s latest initiative?
AMZN stock is up about 3.7% on Monday.
