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Amazon.com Credit Builder: Build credit with no annual fee
- Someone1234 7y agoThis is legitimately a useful service for those who need it. The status quo has created a unintended "chicken & egg" problem wherein people need ok credit in order to start building good credit. This acts as an escape hatch allowing people to build up their bad credit up to a point where they'd qualify for normal credit cards.
- lemcoe9 7y agoThere are already dozens of secured credit cards for the credit-challenged: https://www.creditcards.com/secured/ https://www.creditcards.com/secured/ The 5% back on Amazon.com purchases would give a slight edge to this new secured card.
- r00fus 7y agoAre there any other secured CCs which would have similar benefits? If you buy anything on Amazon, but don't have a CC this may be better than 1% back.
- lemcoe9 7y agoCreditCards.com does a great job comparing different cards, and if I was in a credit-challenged situation I would go for the Discover It Secured card, which offers 2% back on all purchases.
- walrus01 7y agoThe downside to that is that Discover is accepted at significantly fewer online vendors and retailers than Visa or Mastercard.
- prostoalex 7y agoFuturama S1E06: Fry: "Do you take Visa?" Clerk: "Visa hasn't existed for five hundred years." Fry: "American Express?" Clerk: "Six hundred years." Fry: "Discover Card?" Clerk: "Hmm...sorry, we don't take Discover."
- dvtrn 7y agoIn many cases you may be able to obtain a secured line of credit from one of your local credit unions if you’re the type who likes keeping your money local. They tend to be more amenable to helping their members with credit rebuilding goals. That was the path I took, but as with all things ymmv
- astura 7y agoDiscover IT Secured is a great option. https://www.discover.com/credit-cards/secured/ https://www.discover.com/credit-cards/secured/ >Earn 2% Cash Back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases I hear it auto-converts to a regular, non-secured Discover IT after like six months or so.
- tedivm 7y agoThis would only be worth it if you pay it off each month, as it has an insanely high interest rate of 28.24%- you can get a secured Discover card at 25.24% or 21.24% with Wells Fargo. You can do even better if you do with a credit union- DCU has secured cards around 13.75%.
- deadmik3 7y ago5% back on only Amazon with a $120 annual fee (prime) is not very good.
- ceejayoz 7y agoSure, if you weren't otherwise gonna get Prime, you'd have to spend $2400/year to break even. If you're one of Amazon's millions of Prime subscribers, it's a no-brainer.
- entropea 7y agoPlus 28% APR, though I can't imagine holding a balance on a secured card.
- ng12 7y agoMost secured cards have no rewards and many have a yearly fee. If you have prime anyways it's an amazing deal.
- deleted 7y ago[deleted]
- bootlooped 7y agoThe target demographic might overlap with the set of people who are candidates for discounted prime membership.
- SilasX 7y agoYeah, I was in that bizarre limbo for a while, where annualcreditreport.com and all the other sites would swear up and down that I have a ~730 score, all while I had no debts, but everyone classed me a subprime because I didn't have a credit history. Even knowing that you can fix it, it's really bizarre that having e.g. utility bills -- which are extending credit to you -- count nothing towards a credit history ... but it does add to your credit history when you simply move your ordinary purchases onto a card that you pay off every month. Huh? Edit: Reword for clarity.
- berdon 7y agoIt's a system created towards incentivizing people to use credit for the purposes of capturing all users. This maximizes the number of users that mismanage their finances and pay interest on the credit usage.
- jimmaswell 7y agoStudent loans with no missed payments count, even if you haven't had to make payments yet. Very helpful when I was starting out. I'd been getting preapproved offers in the mail throughout the last half or so of college and finally went with one once I had income.
- prepend 7y agoThis is nice just for the 5% back on amazon purchases. I’ll likely set it up just to wash through all my prime purchases.
- ganoushoreilly 7y agoJust pay it off fast as that interest rate is high!
- ThrustVectoring 7y agoInterest rates on credit cards don't matter if you pay off the statement balance on or before the due date.
- cmiles74 7y agoThe billing statements provided by these vendors, if taken at face value, clearly encourages the holding of a balance. Avoiding a balance is a reasonable goal and a smart fiscal policy, but the penalties for holding a balance, in my opinion, should not be so high. I think a 28% APR is way high and their tiered financing strikes me as complicated. Do they clearly describe the tiers and payments required to stay in compliance and avoid that hefty interest rate? I bet they don't, that certainly isn't the case with other Synchrony cards.
- lotsofpulp 7y agoEvery single credit card statement I’ve ever seen clearly states the balance and payment due date before which interest will begin to accrue. Every single one offers an option to automatically pay it every month so you don’t even have to do anything, other than not spend more than the cash you have in your bank account.
- entropea 7y ago>other than not spend more than the cash you have in your bank account. So then why bother opening a credit card?
- teraflop 7y agoAfter reading through the page, I don't see what makes this different from normal secured credit cards which have been around forever. Is it just the Amazon branding and gift-card promo?
- diehunde 7y agoI got the cards and unlike other secured cards it didn't ask for a previous deposit and it gave me a much better balance.
- lemcoe9 7y agoYou get the 5% cashback on Amazon.com purchases. That would appear to be the real value-add here, because you would also get that cashback reward using the non-secured and well-established Amazon.com credit card.
- Pieman103021 7y agoYou get 5% cashback if you have Amazon prime. Assuming you are a student trying to build your credit, that's $60 a year. That means for the 5% cash back to break even you need to spend $1200 on Amazon per year. That's not obscene, but it doesn't really seem worth it to me unless you use Amazon a lot.
- 09bjb 7y agoYep, this is the kicker. They're not highlighting any other form of rewards (such as 2% cash back on everything, or airline miles) so it's not really moving the needle on anything other than the fact that it's Amazon-branded. I see it as just another ploy to get you to spend more money in the Amazon ecosystem.
- TulliusCicero 7y agoThat's assuming you don't use prime for anything else, like free fast shipping, or the TV shows.
- 7y ago
- dymk 7y ago> with an eligible Prime membership So there is a fee, it's a $119/year prime membership
- bluetidepro 7y agoI didn't dig into the FAQ or fine print, but I wonder what happens if you get the card, and then your Prime membership runs out? EDIT: > The 5% back benefit may apply to purchases (less returns and other credits) made using the Amazon.com Store Card Credit Builder when signed into an Amazon.com account with an Eligible Amazon Prime Membership, including 1-Click orders and purchases made at physical Amazon locations (in each case, where 5% back is selected as the default option or where Promotional Financing is selected as the default option but is not available for the particular purchase). It seems like the 5% back is only for Prime membership folks. I think anyone can get the card, with or without Prime, though. So then it doesn't have a yearly fee, technically.
- dymk 7y agoThey almost surely just close the account after some amount of time. Like any other bank if you canceled your accounts with them.
- deleted 7y ago[deleted]
- bluetidepro 7y agoSee my edit on the comment. It looks like that's only for the 5% back. There isn't a fee technically.
- snuxoll 7y agoIt reverts to a standard Amazon.com store card without extra perks.
- arcdigital 7y agoThat wouldn't make sense. The whole point of this is for it to "upgrade" to the standard store card once you've convinced the bank you can be trusted with an unsecured credit line.
- 40acres 7y agoThere should be more was for people to build credit within our financial system, this along with some recent efforts by the bigger institutions to incorporate factors like utility bills are a nice step forward.
- howard941 7y agoHave you read the terms for those up-your-score programs? If I were a CRA in light of all of my issues from FCRA transgressions to gaping security holes I'd want the entire world in mandatory arbitration for everything.
- duxup 7y agoMakes sense as Amazon wants to get to as many people as possible and those who can't keep a card ... might want a handy route to build credit and still use Amazon.
- YeahSureWhyNot 7y agoI think most banks had secured credit cards for long time. I got mine from bank of America with 300 deposit which gave me 300 limit. they refunded it after 6 months
- Yhippa 7y agoThe only drawback I can think of for this is that it's a PLCC and not a Visa or a Mastercard. That said it looks like it's got some neat benefits like the 5% back on Amazon purchases and promotional financing that seem to be on cards for people with established credit.
- llsf 7y agoThis would have been great when I arrived in US with zero credit history. While I did get secured card from the bank, it took for ever to get a line of credit of more than $500/month. The "monitor/improve your credit score" approach is good too as it can be a very foreign concept when you come from Europe...
- Negitivefrags 7y agoCan someone explain to me why America has this strange system of “building credit” while other countries don’t really seem to? In my country there are agencies that track, for example, the fact that you had a debt collector called on you, but you don’t have to have ever used credit card to get a loan, which seems totally bizarre to me. When I got a home loan the primary checks were about making sure my income was as I said it was, that I had a stable job, and then they wanted bank statements to see what my expenses were. My existing bank didn’t require statements of course and just automatically worked out my weekly budget from my account. Why would banks want to trust some arbitrary gameable score when the basics are barely more complicated to check when getting a loan?
- devoply 7y agoIt's likely just a system (credit score) invented to get as many people using credit as possible. But there is a credit score and that is a result of making payments on time to many different sources of loan and paying them on time over a long period of time. But you don't actually have to keep a balance you can simply pay them off all the time. I use it to avoid paying for using my debit card transactions (which are limited for the free account that I hold). As a result probably all of my purchase history is sold to other companies all the time.
- berdon 7y agoAgreed. The simplest answer is that it's intended to maximize the number of financially irresponsible debtors to maximize interest paid in.
- vaseem 7y agoFor mortgages what you stated is still the process. It gets expensive to do through investigation and review all documents, pay slips and bank account for something as trivial as say 'buying a phone' or 'getting internet service'. Credit score has its place there
- pxeboot 7y agoTo make it worse, no credit history equals a score of zero, so it can be worse than just having bad credit.
- msoad 7y agoThis is perfect for immigrants who have good income but can't get approved for any credit cards because of lack of history.
- igorstellar 7y agoImmigrant here. I've got approved for $10K CC at BofA without any history, just provided a bunch of documentation like proof of income. It's also a good idea to apply for some credit union to loan your vehicle even you can afford buying it for cash.
- ohhhwell 7y agoProtip for anyone considering moving to the US. Make sure you open an Amex card in your current country at least 3 months before moving. Amex has a system where as a customer from another region they will let you open one card without needing US credit rating! Make sure you pick a card that doesn't have an annual fee as your first card, since a component of most credit scores is the age of your oldest card, so you want to keep this card open forever, so a fee would suck. I'm approaching 2 years in the us and this has been quite helpful, however I'm still in the situation someone else mentioned. My credit score is high, but I have gotten rejections from "not long enough history" (chase) But getting an Amex platinum after the fact was no problem to get in on the whole Airport Lounges US credit card thing.
- tareqak 7y agoAFAIK, if: 1. You have had an account with the Canadian RBC Royal Bank 2. You move to a state in the US where the US RBC Bank operates in or 1. You have had an account with the Canadian TD Bank 2. You move to a state in the US where the US TD bank operates in then, you can ask the US banks to look at your corresponding Canadian bank's credit history in making a decision in approving you for one of the US bank's credit cards (YMMV - your mileage may vary).
- milin 7y agoEven if there is a fee, most of the time there is an option to downgrade the card to a no fee version.
- mcstafford 7y ago> standard variable purchase APR is 28.24% Amazon has practically brought payday loans to scale.
- sl1ck731 7y agoThis seems to be on par with most other store cards, for example a card from Best Buy.
- brianwawok 7y agoPayday loans are often 300-600%. Or at least were in many states before regulation was passed. See here for details state by state: https://paydayloaninfo.org/state-information https://paydayloaninfo.org/state-information That said, APR of 20%+ on high reward credit cards is not uncommon. I have various cards with various APRs over 20%. I have never paid a penny of interest on them so I don't track which APR is which.. usually the juicier the "reward" of a card, the higher the APR. Which matters not if you fully repay.
- bluedino 7y agoHistory repeating itself...Sears was many peoples first credit cards, they'd give almost anyone a $300 card (which could only be used at their stores)
- bongobongo 7y agoYep. I'm really confused why this press release/advertisement for Amazon is on the front page of Hacker News. It's not new technology; it's not even close to being innovative. It's literally just an Amazon logo pasted onto an old idea. This is an advertisement.
- iscrewyou 7y agoSame here. This belongs on r/personalfinance. Not at the front page of HN. There's nothing techy or ground breaking about this other than being offered by Amazon.
- astura 7y agoHN just likes to have a discussion whenever Amazon offers a new product or service for whatever reason. Same with Apple or Google.
- bongobongo 7y agoI’m relatively new around here but it’s a cringeworthy level of uncritical sycophancy. (Perhaps that’s too harsh; perhaps not.)
- sdinsn 7y agoThis is called a "secured" card. Pretty much all banks offer this.
- _bxg1 7y agoThe comments here about how bad America's privatized credit system is, make me wonder what it would take to "disrupt" that industry. I guess the hard thing is that it's about having relationships with all these giant institutions, so there's a strong in-group bias.
- qntty 7y agoWhy do secured credit cards have an interest rate? They're charging you to borrow money from yourself? The cost of maintaining an account should be covered by the processing fees, right?
- entropea 7y agoNothing more than greed. It's secured, the company will never lose money on it no matter what.
- luckydata 7y agoIt's backed by Synchrony meaning it will have impossibly shitty management tools, can't speak to a human without spending an hour on the phone. No thanks.
- dclaw 7y agoPretty sure they're breaking the law regarding the 2009 CARD Act. It took a search on that page for % to find the actual APR, which is 28.24% -- That was the 26th result on the page out of 38. The first 25 being provisions regarding their 5% back. The APR is required to be prominently displayed so consumers can do their due diligence on deciding on a card. But whatever, obviously Amazon is getting into the slave credit business. Like they care, and like anyone would bother holding them accountable.
- BonesJustice 7y agoYeah, I don't think burying it in the ninth paragraph of the Terms could be reasonably called 'prominent'. For that matter, the landing page for the Apple Card shoves it into a footnote. Seems like a case of "tech company trying to act like bank has no idea how to comply with banking regulations".
- beshrkayali 7y agoIt's highly unlikely that Amazon or Apple "had no idea how to comply with banking regulations".
- supergauntlet 7y agoBoth Amazon and Apple have law departments larger than most large startups. It was intentional. They know nobody will do anything. So really, it's a case of "tech company pretends to be incompetent at pretending to be a bank."
- sharkweek 7y agoSign up X customers and make Y dollars. Get fined Z dollars for breaking a regulation. If Y > Z, congratulate those responsible.
- deleted 7y ago[deleted]
- christefano 7y agoLooks like Amazon has figured out where to find even more Amazon.com customers by helping improve otherwise risky consumers' credit. Even applying gives $10 — in the form of an Amazon gift card.
- tareqak 7y agoHere is an article with the same story from a different source: https://www.marketwatch.com/story/amazons-new-credit-card-targets-people-with-bad-credit-2019-06-10 https://www.marketwatch.com/story/amazons-new-credit-card-ta... .
- neilv 7y agoDoes this tie in with recent news about local pushback against cash-free businesses, on social-justice grounds? (Amazon cash-free stores not accessible to poor people without credit cards.)
- soulnothing 7y agoI just finished a bankruptcy a month ago. Before a tenant fiasco my credit score was ~800. Now that I've gone through the process I'm at ~630. It's not that bad. But when I went to look for an apartment in NYC. I was constantly denied due to the bankruptcy on my record. I felt the solution they offered was downright predatory. Either a for paid guarantor. Which took 3 months rent as a non refundable collateral, then an additional 3 months as buffer for failed rent. That was on top of most land lords wanting 6 to 8 months rent for down payment. Another service I saw was a guarantor insurance plan. Which tacked an extra ~8% as an insurance fee for the first year, than 5% the next year. The only reason I care about my score right now. Is related to putting a roof over my head. Due to the above I went down to Philly and only had to put up four months instead of the typical three. To rebuild my credit I had two secured cards. One for monthly services, the other for larger purchases. I paid them down to 10% each month. This is what brought my score to around 630ish range. Since being discharged. I have been receiving offers that feel predatory to me. House loans with a consultation fee. Or auto loans with really high APR. I've also received a number of credit rebuilding loan offers. Which have non-refundable application fees ranging from 75$-100% with a variable APR between 24-32%. I'm blessed to be a well paid software employee. Because once you're on the other side of the fence. No one trusts you, and the fine print is much more aggressive. I really feel now for people who are barely scraping by. Having to sign these agreements just to cover a roof. I will look at this just to rebuild my score. It may not be the best. The only other company that approved me was Dell. We do need a better program to help people recover. Without penalizing them with higher APR or hidden fees. If they got into that perilous position. They may not be on the best footing.
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