Amazon Launches Credit Card Program for Credit Weakness
Amazon will soon launch a new credit card that is primarily aimed at people with low credit. With a credit card program, they help people get better credit ratings which in the long term can give access to the card. The credit card not only gives bonuses and benefits, but also, for many, access to brand new financial services.
In Sweden it is required that you have good finances
And no payment notes in order to get a credit card. Thus, a relatively large part is placed outside the credit card market. The same is true in the US but this is something that Amazon will change with its new credit card. A card that is clearly aimed at “creditworthy” people.
The reason that Amazon is making this venture is that they want to target a target group that has long been outside their loyalty program through their cards. However, you will not be able to access the card directly – it is required that people go through a special credit card program that Amazon operates with Synchrony Financial. A program that helps people improve their credit rating and gain knowledge in personal finance. After obtaining sufficient knowledge, the new credit card is granted access.
Low credit level – with security
Those who have access to the credit card will receive a credit level of the same amount deposited on the card. As a result, there is generally a low credit level and some assurance that the money will be repaid. But it also becomes a way for a whole new target group to take advantage of credit card benefits which they have not been able to before.
For a long time, for example, Amazon’s loyalty card has given a 5% bonus. A very high bonus compared to what is given on Swedish credit cards. Also included are several other benefits.
A large proportion outside the financial system
Thus, even in Sweden, a similar concept could work to get people with low credit ratings to access the card’s benefits. However, there is a fundamental difference between the US and Sweden regarding access to the financial system.
According to a survey, about 25% of US residents are either completely out of the system (referred to as being unbanked) or have access to fewer banking services than they need (underbanked).
The arrangement with the new credit card is thus not only about providing access to bonuses and benefits in the loyalty card, but also providing access to new financial services to people who are outside this system.