Financing for amazon: How Amazon Financing Works (AMZN)

Financing for amazon

Financing for amazon: How Amazon's Financing Works (AMZN)

In 2015, Amazon. com Inc. (NASDAQ: AMZN) began offering its customers limited interest-free financing, set up at a triple price point. Financing can be accessed through the Amazon store credit card, the Amazon Store Card, or the Amazon Prime Store card.  Financing for amazon, the Amazon Store Card is available to any registered Amazon. com customer, but the Amazon Prime Store card requires a $99 annual membership fee. Both cards are issued and managed by Synchrony Bank, a wholly owned subsidiary of Synchrony Financial (NYSE:SYF).

The Amazon store credit cards work just like any other store cards. Applicants receive a credit limit based on their credit score and other screening factors, and the cards can only be used for purchases made from Amazon. com.

Because Amazon customers often buy quite expensive items through Amazon. Com: the store cards is a most popular addition to Amazon's products and services. The company benefits by attracting more customers to sign up for Prime membership and by paying lower transaction processing fees than it pays to buy with a major credit card.

Three financing levels:

Interest-free financing is available for purchases of $149 or more from Amazon. com. The first tier of financing offers six months of free financing and no interest on kitchen and dining items, books, video games, and auto parts. However, if the purchase amount is not paid in full within six months, interest will be charged on the total original purchase price, even if the customer has already paid part of the balance by making the required minimum monthly payments.

In addition, 12-month interest-free financing is available under the same terms and conditions for orders totaling $599 or more of the camera and video equipment, sports and outdoor equipment, home improvement items, major appliances, computers, jewelry, watches, musical instruments, and automobile wheels.

The specified interest-free financing price thresholds must be met by a subtotal of the order. In other words, taxes, shipping, or other costs are not included in determining whether a purchase meets the minimum price level required to qualify for interest-free financing.

Furthermore, 24-month interest-free financing is only offered on high-definition (HD) televisions.

Amazon store credit cards can be used to purchase items outside of the designated promotional financing categories and price levels. Such purchases will be subject to the card's regular interest rates. The only exception to this policy that still offers interest-free financing is the 12-month equal pay offer. This offer applies to designated, qualifying purchases only. With the equal pay offer, instead of paying the minimum monthly payment on the card's outstanding balance, customers choose to make 12 equal monthly payments that add up to the total amount funded.

All registered Amazon. com customer can request the standard Amazon Store Card, while only Amazon Prime members can request the Amazon Prime Store card, which offers the added benefit of 5% cash back on purchases. Prime members who spend about $200 a month or more at Amazon can get more than $99 Prime membership fees back through the 5% cash back rewards earned. Both cards report to the major credit bureaus and can therefore affect a cardholder's credit score.

Any balance executed on orders that do not offer special promotional financing will be charged a floating interest charge, pegged at 26.24%, as of August 2016. Financing for amazon, because of this high annual percentage rate (APR), card usage is not allowed. a good choice for customers who regularly have an outstanding balance.

The Amazon Credit Card:

Amazon customers can apply for a most regular credit card it can be used for purchases in anywhere Visa credit cards are accepted. This card is the Amazon. com Rewards Visa-Card, issued by J.P-Morgan Chase & Co. (NYSE: JPM). Cardholders earn points on purchases made with the card. These points can be redeemed for available rewards, such as travel, cash, gift cards, and purchases from Amazon. com.

Rewards points are earned on 3% of Amazon purchases. com, 2% back on purchases at drugstores, restaurants, and gas stations, and 1% on all other purchases made with the card. Reward Points do not expire as long as a cardholder maintains their account.

As of August 2016, the Amazon. com Rewards Visa Card also offered a promotional signup bonus in the form of a $50 Amazon. com gift card received after credit card approval.