Should You Get the New Amazon Prime Credit Card?
With the competition among cashback rewards cards hitting an all-time high, it's really no surprise that Amazon would unleash another competitive card option. The new Amazon Prime Rewards Visa Signature Card from Chase offers rewards not only when you shop at Amazon, but on other everyday purchases as well. For frequent Amazon shoppers, this card could be the one that awards you the most on all your shopping — online and offline.
Here's everything you need to know about the new Amazon Prime credit card, so you can decide if it's right for you.
Who Can Get the Amazon Prime Card?
This card is exclusively designed for Amazon Prime members. However, you can still use it even without a membership if you want a lower cashback rewards rate of 3% on Amazon purchases. Prime membership, depending on the type of membership you carry, can cost as much as $99 per year, or $10.99 per month. Prime members who already have the Amazon Rewards Visa Signature Card will be automatically upgraded to this card.
SEE ALSO: 7 Ways to Score Deals on Amazon Prime Membership
What Are the Benefits?
$70 sign-up bonus. When you are approved for the card, you automatically receive a $70 credit you can use toward your Amazon purchases. Unlike other rewards cards with sign-up bonuses, you don't have to meet any spending requirements to earn it.
Get 5% back. The new Amazon Prime credit card awards 5% statement credit on Amazon purchases; 2% back at restaurants, gas stations, and drugstores; and 1% back on all other purchases. You can use your credit when you shop on Amazon without any minimum requirements. Other options for redeeming are available in the form of gift cards, cash, and travel rewards.
No annual fee. There is no annual fee for the card, but you do need to maintain a Prime membership to earn the full 5% back on those purchases. If you don't, you will only earn 3% on Amazon purchases with this card.
No foreign transaction fee. This card has no foreign transaction fee, a fact that can save you some money on foreign purchases if you frequently travel abroad. Most cards that award Amazon purchases charge a foreign transaction fee on purchases outside of the U.S.
Visa can be used anywhere. Unlike the Amazon store card provided by Synchrony Bank, the new Amazon Prime card is a Visa that can be used anywhere Visa is accepted. This allows you to earn cash back on other types of purchases, besides those that you make online with Amazon.
Travel benefits. Not only can you use the card anywhere Visa is accepted, you also get the card benefits that Visa is known for providing. These benefits include access to the Visa Signature Luxury Hotel Collection and Visa Signature Concierge Service, as well as travel and emergency services and lost luggage reimbursement. These benefits are not offered with the Amazon store card, and they can end up being valuable, especially for travelers.
Are There Any Fees?
The annual percentage rate (APR) for balance transfers and purchases is a variable APR of 14.74% to 22.74%, based on your creditworthiness. There is no annual fee or foreign transaction fee. Remember, however, that you need to maintain an Amazon Prime membership if you want to earn the maximum of 5% back on Amazon purchases. If you do not have a Prime membership, those purchases will only earn a 3% statement credit.
What Are the Drawbacks and Limitations?
If you're trying to decide if this is the card for you, consider the following drawbacks and limitations before making your decision.
Amazon Prime membership required. In order to get the most out of this card, you have to be a Prime member, and you have to be someone who shops regularly with Amazon. Otherwise, you will only earn the 2% that's offered for restaurants, gas, and drugstores, and 1% for other purchases. If you're simply trying out your Prime membership and aren't sure if it's something you'll keep after a couple of months, this card is probably not the best rewards card for you.
SEE ALSO: 5 Ways to Get Free Amazon Prime (at Least for Awhile)
Low 2% rate. That 2% cashback rate is among the lowest for everyday purchases. If the majority of your purchases are at restaurants, gas stations, and drugstores, you might want to choose a card that instead rewards those types of purchases.
Potentially high APR. Although you could qualify for an APR as low as 14.74%, keep in mind that most cashback rewards cards come with higher APRs than those that don't offer rewards. In this case, it can be as much as 22.74%. If you don't typically pay your balances in full each month, you could end up paying more in interest than you earn in rewards. And, with the cost of the Prime membership included, this card could end up costing more than you earn.
No financing options. Many credit cards offer 0% introductory APRs for purchases and balance transfers to help new cardholders save money on interest. In fact, even the Amazon store card gives you the option to select special financing, such as 0% financing on Amazon purchases of $599 or more, instead of the rewards.
Readers, what are your thoughts on the new Amazon Prime credit card? Would you consider getting it? Why or why not? Let us know in the comments below.
If you already have a Costco or SAMs membership, their cards both pay 3% back on both restaurants and travel, with no additional annual fee.
Even if you never set foot inside the store, their annual club membership fee can make sense if you buy a lot of gas and eat out or travel a lot. In our area their gas starts out 10-25 cents lower, even before their 5%/4% (SAMs/Costco) Cashback.
(We sure do miss the excellent customer service we had from Amex before Costco dumped them. Citi is a mess! But SAMs' Synchrony Bank is even worse, if that is possible.)
Easy to say but there aren't too many that gives more than 2% without hurting you in other areas like annual fees or rotating categories. You should at least make some recommendations. 2% is fairly common these days.
... and I keep a running gift card balance on my Amazon account and consider everything I purchase there to be at a 15% discount. That is an easy round number to figure in lost opportunity cost.
So MEH to the Amazon card and MEH to Chase Bank!
Blue from AMEX is only 1% at the supermarket.
Blue Cash Everyday from AMEX is 3% at the supermarket.
Blue Cash Preferred from AMEX is 6% at the supermarket, but is limited to $6K spend per year at that earnings rate, and has an annual fee of $75, which equates to 4.75% if you max it out...
So how are you claiming 5%?
BTW...I game the system too. I buy the gift cards at the supermarket with the Blue Cash Preferred, but buy from the supermarket that gives me fuel points on my purchases too (4X points on gift cards) and it equates to a 18.75% discount over "cash" for gift cards to nearly anywhere :)
I have 2 of these AMEX cards in the household and we max out the $12K spend on gift cards at the supermarket every year, saving us the equivalent of $2250 for the $300 in annual fee. Of course there is opportunity cost, but you have that with everything.
You never leave Amazon's site. Answer 5 or 6 simple questions... and 30-45 seconds later you have a new credt card account. And another inquiry on your credit score. And another credit card on your credit report.
This gives us one less reason to keep our lesser Discover card since we regularly leveraged Discover's quarterly Amazon 5% cash back promos.
Why boycott Amazon?
The $5000 analysis neglects the cost of guaranteed 2-day vs. standard shipping, and other Prime benefits, e. g. the selection of music, movies, and series (including Originals) available for free streaming. I know I watch at least the equivalent of $99 of movies and series episodes in a month. If you've already subscribed to different streaming services, that does change your value calculation.
Here's what you need to know:
-Amazon Prime costs $100 a year
-You do not need Amazon Prime in order to have this credit card.
-The card w/out prime provides 3% back on everything at Amazon.
-The card w/ prime provides 5% back on everything at Amazon.
So, is the additional 2% worth an Amazon Prime account?
Not unless you are purchasing $5,000 worth of goods at Amazon. (100 / 2% = $5,000)