Amazon announced Monday it partnered with Synchrony Financial to create what it considers the "Amazon Credit Builder" for subscribers looking to build or rebuild their credit scores. Cardholders will get the same perks as the Amazon Store Card — such as 5 percent back for online purchases and no annual fee — but customers must be Prime members, paying Amazon's annual $119 membership fee.
Those who are accepted for the Amazon Credit Builder will have to make a security deposit within 60 days to receive a “welcome gift card.” The deposit will be refunded if someone closes their account or upgrades to the Amazon Store card. Those who are accepted but decide to opt out won’t have their credit file impacted by their decision.
While some have applauded Amazon's latest credit card launch, others have questioned whether it will really benefit the unbanked or underbanked.
Sanders, in particular, was quick to blast the e-commerce giant's promotion of the "Credit Builder," pointing out it has a very high — 28.24 percent — interest rate.
"Can you believe it? Amazon is issuing credit cards with 28% interest rates to 'help' people with bad credit," the Vermont senator, a Democratic frontrunner in the 2020 presidential race, tweeted on Wednesday.
The 77-year-old vowed he and Ocasio-Cortez would destroy the new card.
"This kind of greed makes the poor even poorer and @AOC and I intend to outlaw it. Corporations will have to survive on a 15% cap on interest rates," he continued in the tweet, which Ocasio-Cortez later retweeted.
However, the self-proclaimed Democratic socialists aren't the first people to point out the high interest rate.
Ted Rossman, CreditCards.com’s industry analyst, acknowledged earlier this week that it was a "risk" to be aware of. But he said cardholders will benefit from the card as long as they pay their bills on time.
Ultimately, Rossman said it's a "solid option" for people who are new to credit or aiming to improve their credit.
“This is a very unique card, between the secured nature, the 5 percent cash back offer and the two different flavors of 0 percent interest (either 12 months of equal payments or 6/12/24-month 0 percent periods for select purchases),” Rossman said. “If used properly, this card can help you improve your credit while saving on interest or pocketing an attractive cash back return on items you would (hopefully) buy anyway.”
Synchrony Executive Vice President Tom Quindlen told CNBC the new card enables financial group "a new segment" of the market
“It’s putting credit in the hands of people in a responsible way,” he insisted.
This isn't the only time Amazon has been targeted by politicians this week.
Fox Business' Katherine Lam contributed to this report.