What is Amazon financing and how does it work?

Amazon created an extraordinary platform to bring new options to market, including credits. Looking at it from an objective perspective, has 150 million subscribers on Amazon Prime (only those in the United States), hundreds of thousands of people make their purchases through the platform and there are at least 2.5 million sellers who sell their products on the page. In addition to all that, it also offers the Amazon Financing service, but what is it really and how does Amazon Financing work? We will tell you below.

What is Amazon Financing?

Like other world-class retailers, Amazon has created an excellent opportunity to offer its customers other associated services, such as credit products and financing options. This, without a doubt, could boost the business of every merchant who trusts Amazon to make their items reach the last corner of the planet.

But, What is the objective of Amazon financing? Well, it has always been about creating opportunities for users to spend their money within this great ecosystem that it represents. Historically, the company has been quite active in the fintech sector, especially in terms of online payments.

In 2011, Amazon took a step forward by launching certain loan products for SMEs and, after doing so successfully, it was inaugurated in the world of Credit cards for small business and consumer users.

Amazon Small Business Loans

In 2011, Amazon launched a series of loans for its sellers, specifically for small businesses. However, this new credit option was not very publicity. In fact, the loans were offered only to Amazon sellers who met certain sales criteria established by the same platform.

Since the launch of this new financing option, Amazon has provided more than $5,000,000,000 in loans for small businesses on its platform. Mind you: this offer is still by invitation only. It is not open to all sellers.

Financing users through Amazon

Amazon also has financing options for its users. But how do you deliver them? Through the following credit cards: Amazon Rewards Visa Signature Card, Amazon Secure Card Y Amazon StoreCard. If approved, consumers receive a credit limit based on their score and other evaluation factors.

Did you know: The number of Amazon Prime members – in the United States alone – was more than 150 million people for the year 2019.

Amazon StoreCard

The Amazon StoreCard It was first launched in 2015 and has two presentations. One that is offered only to Prime members and another for those platform users who do not have an Amazon Prime membership.

Note: The Amazon Store Card can only be used at Amazon.

The Amazon StoreCard no annual feel, something that is perfect to save. The card is offered in association with Synchrony Bank. Those who are Prime users also get a 5% cashback in cash on purchases made within the platform.

All Amazon Store card holders get a gift card, promotional financing and other special credit options. They will also be able to choose between making fixed monthly payments -Equal Monthly Payments- or a special payment method (Special Financing).

How does the Equal Monthly Payment work?

  • 6 months of fixed payments for purchases of $150 or more.
  • 12 months of fixed payments for purchases of $600 or more.
  • 24 months of fixed payments for select purchases only.

With these options, beneficiary owners can pay for their purchases monthly by depositing amounts equal to one 0% annual percentage rate or APR, at least during the financing period. Now, the amount of the debt will include the price of the purchased product, taxes and shipping.

This total amount is divided equally taking into account the number of months that the financing lasts. For example, if you buy something for $300, you have six months to pay for it this way: $50 a month.

But, What happens if the holder does not pay the full balance of the card and the financing period ends? In that case, a late fee would be incurred until the remaining amount is paid in full.

The other financing option with the Amazon Store Card is the special one, which also has three different levels:

  • 6 months of special financing for purchases of $150 or more
  • 12 months of special financing for purchases of $600 or more.
  • 24 months of special financing on select purchases of $800 or more.

In this case, customers will not be required to pay interest if the full amount of the purchase is paid off within the financing period. Of course: a minimum monthly payment is required. Interest plus a late fee will apply to any remaining balance. The annual percentage rate, in this case, is 27.49% and interest is posted from the date of purchase, even if you have made payments.

This means, in a nutshell, that it is better for you to pay off the card before the financing period ends. Otherwise, you will have to bear too many extra charges.

Amazon Rewards Visa Card

The credit card Visa Amazon Rewards was launched in 2017. In this case -and just like the previous option- also available in two versions: one for Prime members and one for regular users. New holders of these cards can get an amazon gift card prior approval of the company. Both cards work with an annual percentage rate that varies between 14.24% and 22.24%, and its calculation will depend on the cardholder’s credit score.

This card is available to any customer who is registered with Amazon. It is not subject to the payment of an annual fee nor to commissions or charges for transactions carried out abroad. These versions are issued in partnership with Chase Bank and reward holders with cash back that is divided into various tiers.

Amazon Rewards Visa cardholders can get a 3% cashback on purchases made at Amazon and Whole Foods; 2% for consumption in restaurants, service stations and participating pharmacies; and 1% on any other purchase they make.

In the case of Prime users, the card delivered by the platform will be the Amazon Prime Rewards Visa Card. Unlike the others, cardholders will earn an additional 2% in rebates for purchases they complete at Amazon and Whole Foods.

However, the use of cash back is perfect to offset the payment of the Prime membership, which is $119 per year. To give you an idea, all Prime members who spend an average of $200 per month or more on Amazon will get their membership payment back over the course of a year.

Amazon Secure Card

In June 2019, Amazon launched an option for consumers with little credit: the Amazon Secured Card, which is a secured card. To get it, cardholders must make a deposit ranging from $100 to $1,000. The amount deposited will also be the credit limit. Amazon offers secured cardholders the same benefits Amazon Store Card owners enjoy, including equal monthly payments and special financing options.

Other Amazon Financing Services

Taking advantage of its strong position in the market, Amazon also offers other financial services for its users, some of them quite attractive. Let’s get to know some of them:

  • Amazon Business Card: The card Amazon Business by American Express It was launched on the market in October 2018. It offers special benefits for those purchasing companies, including discounts to access Amazon web services.
  • Amazon Corporate Credit Line: It is a corporate credit account that allows benefited users to make purchases. This product is perfect for different types of businesses, including bookstores, schools, government institutions, among others.
  • Buy with points: Amazon allows its customers to buy with the points they have accumulated on their card.
  • Recharge your balance: This option allows you to load new funds to an Amazon gift card so you always have a positive balance to complete your purchases.

In addition, Amazon has stated that it is considering a new financial option: a current account to complete your prepaid gift card offer. So far, he hasn’t made a move on it., and that Google already announced in November 2019 that it would launch its new checking account on the market. We will have to wait for the company’s statements throughout 2020 and later years.

Amazon financing, in summary

Are you interested in Amazon financing options? So, remember the following:

  • Amazon offers customers several financing opportunities, especially revolving credit.
  • The most popular Amazon credit cards are: Amazon Rewards, Amazon Prime Rewards and Amazon Store Card from Visa.
  • Amazon also provides credit options for small businesses, such as the Amazon Business Prime Card from American Express.

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