The Amazon Credit Card is a popular choice for frequent Amazon shoppers and Prime members looking to maximize rewards on their purchases. Issued by Chase, Amazon offers two main credit cards: the Amazon Prime Rewards Visa Signature Card, available exclusively to Amazon Prime members, and the Amazon Rewards Visa Signature Card for non-Prime users. The Amazon Prime Rewards Visa is particularly attractive for dedicated Amazon shoppers, offering an impressive 5% cashback on Amazon.com and Whole Foods purchases. For those without Prime, the Amazon Rewards Visa provides 3% cashback on the same purchases, making both options rewarding for different types of users.
In addition to competitive cashback rates, these cards offer rewards on other categories, such as gas stations, restaurants, and drugstores, along with 1% cashback on all other purchases. However, the Amazon Credit Card does have limitations, especially for those who don’t shop frequently on Amazon. With variable interest rates, a dependency on Prime membership for optimal rewards, and specific redemption restrictions, the card may not be suitable for everyone. This article explores 11 pros and 9 cons of the Amazon Credit Card, helping prospective users weigh its benefits and potential drawbacks. By understanding the card’s features, you can make an informed decision about whether the Amazon Credit Card aligns with your spending habits and financial goals.
Pros Of The Amazon Credit Card
1. High Cashback Rate For Amazon And Whole Foods Purchases
One of the Amazon Credit Card’s most attractive features is the 5% cashback rate on all Amazon and Whole Foods purchases for Amazon Prime members. This high rate allows frequent Amazon shoppers to accumulate significant rewards, particularly those who buy a range of items from Amazon’s vast marketplace. The 5% rate on essential categories, from groceries to household goods, makes the card especially valuable for those who do much of their shopping online. By maximizing this cashback, cardholders can offset a portion of their spending, making everyday purchases more affordable over time.
2. No Annual Fee For Non-Prime Cardholders
The Amazon Rewards Visa Signature Card, available to non-Prime members, offers a 3% cashback rate on Amazon and Whole Foods purchases with no annual fee. This makes it an attractive option for those who want Amazon rewards without an Amazon Prime membership. Many rewards cards charge an annual fee, but the Amazon Rewards Visa allows occasional Amazon shoppers to enjoy cashback without an extra cost. For budget-conscious individuals or those who do not shop on Amazon frequently, the no-fee option provides flexibility, making it easier to enjoy rewards without commitment.
3. Additional Cashback On Everyday Categories
Both Amazon credit cards provide 2% cashback on purchases made at restaurants, gas stations, and drugstores, along with 1% on all other purchases. This added benefit allows cardholders to earn rewards on everyday spending outside of Amazon. For users who frequently spend in these categories, the additional cashback provides enhanced value, making the card beneficial even when not shopping on Amazon. By covering a variety of daily expenses, these cashback categories make the Amazon card more versatile, appealing to cardholders who want rewards beyond Amazon’s ecosystem.
4. No Foreign Transaction Fees
The Amazon Credit Card does not charge foreign transaction fees, making it an appealing choice for international travelers. Foreign transaction fees on many other cards typically range from 1% to 3%, which can add up when making purchases abroad. With no additional charges for international transactions, the Amazon Credit Card is convenient and cost-effective for cardholders who travel frequently. For those planning vacations or business trips overseas, this benefit can help reduce costs, making the Amazon card a versatile choice for both domestic and international spending.
5. Flexible Redemption Options
Rewards earned with the Amazon Credit Card are highly flexible, offering several redemption options. Cardholders can use their rewards for Amazon purchases, statement credits, gift cards, or travel. This range of redemption options allows users to choose the rewards that best fit their financial goals or preferences. For Amazon shoppers, using rewards directly at checkout is particularly convenient, while others may prefer the flexibility of statement credits. The variety of redemption options makes the card adaptable to different spending habits, adding to its appeal as a versatile cashback option.
6. Visa Signature Benefits For Added Protections
The Amazon Credit Card includes Visa Signature benefits, which provide cardholders with additional protections and perks. These benefits include purchase protection, extended warranty coverage, and travel accident insurance, which add value to purchases and increase peace of mind. For example, purchase protection covers damage or theft on eligible items for a certain period, while extended warranties prolong manufacturer coverage. These perks can be especially helpful for higher-value purchases, providing added confidence to cardholders who seek extra security on their transactions.
7. Seamless Integration With Amazon’s Platform
The Amazon Credit Card is seamlessly integrated into Amazon’s platform, making it easy for cardholders to manage their accounts and rewards. Rewards can be applied directly at checkout, allowing users to instantly use their cashback on Amazon purchases. Cardholders can also track their rewards balance within their Amazon account, simplifying the experience for those who shop frequently. This integration offers convenience and enhances the user experience, making it easy to use and manage the card directly through Amazon.
8. Welcome Bonus For New Cardholders
Amazon often provides a welcome bonus to new Amazon Credit Card members, usually in the form of an Amazon gift card valued between $50 and $100. This bonus is awarded upon approval and can be used immediately, providing new cardholders with instant value. For Amazon Prime members, this welcome bonus can be an additional incentive to sign up for the card. The sign-up bonus is a great way for new cardholders to start their rewards journey with Amazon, offsetting early spending and adding value.
9. Builds Credit With Responsible Use
The Amazon Credit Card can help individuals build or improve their credit when used responsibly. Timely payments and regular usage contribute positively to a cardholder’s credit history, helping to boost their credit score. This can be particularly beneficial for younger individuals or those looking to establish a stronger credit profile. With responsible management, the Amazon card offers an opportunity for positive credit growth, making it a useful tool for those focused on maintaining good credit habits.
10. Enhanced Security Features For Cardholders
The Amazon Credit Card includes several security features to protect users from fraudulent activity. With zero-liability protection, cardholders are not held accountable for unauthorized charges on their card, adding a layer of security for online and in-store purchases. Given the rise in online shopping, these security features are particularly valuable for Amazon users. By offering added protections, the Amazon card reassures users about the safety of their transactions, making it a reliable option for frequent shoppers.
11. Great For Frequent Amazon Shoppers
Overall, the Amazon Credit Card is ideal for regular Amazon shoppers, offering significant cashback on Amazon and Whole Foods purchases, along with flexible rewards options. For those who shop online frequently, the card provides value through cashback, security, and convenience. By earning 5% back on Amazon purchases, cardholders can save on everyday expenses, making the card especially appealing for loyal Amazon customers. This targeted value makes the Amazon Credit Card an excellent choice for frequent Amazon users looking to maximize their rewards.
Cons of the Amazon Credit Card
1. Amazon Prime Membership Required For Optimal Rewards
The highest cashback rate of 5% on Amazon and Whole Foods purchases is only available to Amazon Prime members, who pay an annual membership fee of $139. For those without Prime, the cashback rate drops to 3%, which may not be as competitive. This requirement limits the card’s value to those already subscribed to Prime, potentially reducing the card’s appeal. For individuals who don’t need a Prime membership, the card’s maximum benefits may not justify the added cost, making it better suited for existing Prime members.
2. High APR For Carried Balances
The Amazon Credit Card has a relatively high variable APR, which can increase costs if balances aren’t paid in full each month. Cardholders who carry a balance are subject to interest charges that could outweigh the benefits of cashback rewards. For individuals prone to carrying balances, this high interest rate may lead to significant expenses, reducing the card’s overall value. It’s most beneficial for cardholders who pay off their balances monthly, as interest charges can quickly diminish cashback rewards earned.
3. Limited Rewards For Non-Amazon Spending
The Amazon Credit Card is most rewarding for Amazon and Whole Foods purchases, but it offers only 1% cashback on other general purchases. For cardholders looking for higher rewards across all spending categories, this limitation may make the card less versatile. Compared to other general-purpose rewards cards, the Amazon Credit Card may not provide sufficient value on non-Amazon purchases. For individuals seeking a more well-rounded cashback card, the Amazon card’s limited rewards for non-Amazon purchases could be a disadvantage.
4. Rewards Primarily Geared Towards Amazon Redemptions
Although the Amazon Credit Card offers several redemption options, it primarily focuses on Amazon-specific rewards. For cardholders who prefer to redeem rewards for travel or other non-Amazon uses, this structure may feel restrictive. While statement credits are available, the card’s main value is centered around Amazon-related redemptions. For those who seek flexibility in their rewards, the Amazon-centric structure may limit how they choose to redeem points, making it less attractive for individuals who prefer more diversified options.
5. Potential For Overspending Due To Rewards Incentives
The high cashback rate on Amazon purchases may tempt some cardholders to overspend in order to maximize rewards. With enticing rewards on offer, users may find themselves making unnecessary purchases to take advantage of the cashback structure. This overspending risk can lead to higher-than-expected balances or increased debt, particularly for individuals who struggle with impulse buying. Responsible spending is essential to avoid unnecessary expenses, as the reward structure may inadvertently encourage spending beyond one’s budget.
6. High Credit Score Needed For Approval
Approval for the Amazon Credit Card generally requires a good to excellent credit score, which may limit access for individuals with fair or limited credit history. Those in the process of building or repairing their credit may find it challenging to qualify for the card, making it less accessible. For applicants who don’t meet the score requirement, the Amazon Credit Card may not be a feasible option, potentially leading them to seek other cards with more lenient credit requirements.
7. Potential Annual Cost For Prime Membership
For Prime members, the Amazon Credit Card provides optimal rewards, but the annual cost of an Amazon Prime membership ($139) can be a drawback. If a cardholder doesn’t frequently use Prime’s other benefits, this membership fee may outweigh the card’s added rewards value. Individuals who only want the card for its cashback on Amazon purchases may find the annual cost difficult to justify. The requirement of Prime membership for maximum rewards makes it essential to weigh the benefits against the ongoing fee.
8. Low Cashback Rate On Non-Bonus Categories
While the Amazon Credit Card provides high rewards on Amazon and Whole Foods purchases, it only offers 1% cashback on general purchases. This low rate makes it less competitive as a general-purpose card, especially for those who spend heavily outside Amazon’s ecosystem. For users who want strong rewards across all categories, this low cashback rate could limit the card’s appeal. It’s better suited for frequent Amazon shoppers, as the general spending categories don’t offer comparable value.
9. Risk Of Rewards Expiration After Account Closure
If a cardholder closes their Amazon Credit Card account, any unused rewards may be forfeited. This lack of transferability or retention can be a drawback for users who are considering closing the account. For those who prefer keeping rewards indefinitely, this limitation may restrict the card’s long-term value. Additionally, this restriction could impact customer loyalty, as rewards forfeiture reduces the incentive to retain the card long-term.
Conclusion
The Amazon Credit Card is highly rewarding for loyal Amazon shoppers, providing up to 5% cashback on Amazon and Whole Foods purchases and flexible redemption options. Its no foreign transaction fees, Visa Signature benefits, and seamless integration with Amazon’s platform enhance the user experience, making it an ideal card for frequent Amazon users. With additional cashback categories and robust security features, it offers both value and peace of mind.
However, the Amazon Credit Card does have certain limitations. The need for an Amazon Prime membership to access the best rewards, a high APR for carried balances, and limited non-Amazon rewards may make it less appealing for some users. Additionally, those prone to overspending or seeking more versatile cashback options may find the card restrictive. Overall, the Amazon Credit Card is best suited for disciplined Amazon shoppers who regularly shop on the platform and pay off their balances in full. By considering these pros and cons, individuals can decide if the Amazon Credit Card aligns with their spending habits and financial goals.