How does Amazon Secured Card Work?
In today’s digital age, online shopping has become an integral part of our lives. With the convenience of shopping from the comfort of our homes, it’s no surprise that more and more people are turning to online retailers like Amazon. To cater to the growing number of online shoppers, Amazon has introduced the Amazon Secured Card, a credit card designed specifically for Amazon purchases. But how does this card work? Let’s dive into the details.
The Amazon Secured Card is a credit card issued by Chase Bank, a subsidiary of JPMorgan Chase & Co. It is a secured credit card, which means that the cardholder needs to deposit a certain amount of money as collateral to secure the card. This collateral acts as the credit limit for the card, and the cardholder can use the card to make purchases up to this limit.
Understanding the Application Process
To apply for the Amazon Secured Card, you’ll need to visit the Amazon website and navigate to the Amazon Secured Card section. You’ll be prompted to fill out an application form, which requires basic personal information such as your name, address, and Social Security number. Once you submit the application, Chase Bank will review your application and may request additional information to verify your identity.
If your application is approved, you’ll need to deposit a minimum of $200 as collateral. This deposit will be held in a Chase savings account, and you can access it at any time. The deposited amount will serve as your credit limit, and you can use the card to make purchases on Amazon and other participating merchants.
Using the Amazon Secured Card
Once you receive your Amazon Secured Card, you can start using it to make purchases. The card works just like any other credit card, and you can use it to shop on Amazon, pay for subscriptions, and even book travel. The card has no annual fee, and you’ll receive a monthly statement that details your purchases, payments, and any fees or interest charges.
It’s important to note that while the Amazon Secured Card is primarily designed for Amazon purchases, you can use it at any merchant that accepts Visa cards. However, keep in mind that the card may not offer the same rewards or benefits as other credit cards.
Building Credit and Improving Your Score
One of the main benefits of the Amazon Secured Card is its ability to help you build or improve your credit score. Since the card is reported to the three major credit bureaus—Equifax, Experian, and TransUnion—you can establish a credit history if you don’t have one, or improve your existing score by making timely payments and keeping your credit utilization low.
To maintain a good credit score, it’s essential to make your monthly payments on time and keep your balance below 30% of your credit limit. By doing so, you can demonstrate responsible credit behavior, which can have a positive impact on your overall creditworthiness.
Conclusion
In conclusion, the Amazon Secured Card is a convenient and secure way to make purchases on Amazon and other participating merchants. By depositing a collateral amount, you can access a credit limit and build or improve your credit score. However, it’s important to use the card responsibly and keep an eye on your spending to avoid unnecessary fees and interest charges. With the right approach, the Amazon Secured Card can be a valuable tool in your financial arsenal.
