[Update: Some offers mentioned below have expired. For current terms and conditions, please see card agreements.]
Retail Giant Amazon.com has teamed up with Chase to release the Amazon Prime Rewards Visa Signature Card. The new card combines the best features of the Amazon Prime store card with the original Amazon Rewards Visa credit card — most notably, a whopping 5% cash back on all Amazon purchases for — you guessed it — Prime members.
Five percent is pretty much tops as far as credit card rewards go, but that doesn’t mean the new card is right for everyone. Here’s what to know if you’re thinking about signing up for Amazon Prime and/or its new credit card.
What Are the Benefits of the New Amazon Prime Card?
Once you are approved for the Amazon Prime Rewards Visa Signature Card, you will instantly receive a $70 Amazon.com gift card. When you use the card on Amazon.com, you will receive 5% cash back with your Prime membership. In addition, you will receive 2% back when you use your card at restaurants, gas stations, and drug stores, and 1% back on all other purchases. (For a quick comparison, the original Amazon Rewards Visa credit card offers 3% cash back on Amazon.com purchases, 2% cash back at restaurants, gas stations and drug stores, and 1% cash back on everything else. You can find a full review of that card here.)
When you are ready to redeem your rewards, you can do so easily on Amazon.com. Each point that you have is worth one cent. When you head to checkout, you will see your available cash back balance. There is no minimum amount needed for redemption. You can pay for part or all of your purchase using your available points. You can also redeem your rewards for cash, gift cards, or travel expenses.
While this card is best-suited to the frequent Amazon.com shopper, it’s also a good fit for the frequent traveler. It comes with no foreign transaction fees, plus you will receive travel accident insurance, baggage delay insurance, and lost luggage assistance.
The Amazon Prime Rewards Visa Signature card offers shopping benefits as well. You will receive purchase protection, where you will be covered up to $500 per claim and $50,000 per account, against theft or damage for the first 120 days. You will also receive extended warranty protection, which will extend any warranty of three years or less by an additional year. If you are a current Amazon Prime member and have the standard Amazon Rewards Visa Rewards card, you will be automatically upgraded for free.
What Are the Costs of the New Amazon Prime Card?
The Amazon Prime Rewards Visa Signature Card does not come with an annual fee, but you will be required to have a $99 Amazon Prime membership. With your membership, you will receive free two-day shipping and access to Amazon Prime Video.
The card comes with a standard variable annual percentage rate (APR) of 14.74% to 22.74%, depending on your creditworthiness. (You can get an idea of whether you could qualify for the card — and at what APR — by viewing two of your free credit scores, updated every 14 days on Credit.com.) If you are planning a balance transfer, there is a fee of either $5 or 5%, whichever is greater.
I Have Amazon Prime. Should I Apply for the Card?
If you are an existing Amazon Prime member who has the Amazon Rewards Visa Signature card, this card would be an excellent addition to your wallet. The ability to earn 5% back instead of 3% on purchases from Amazon.com adds a lot of value. Of course, you’ll want to use the card carefully so you don’t lose your hard-earned rewards to high interest or debt. That means, if you’re prone to carrying a balance or the allure of 5% cash back will lead to one-click orders you can’t really afford, you’re better off looking into a low-interest credit card.
I Don’t Have Amazon Prime. Is the Card Worth an Upgrade?
If you have been considering an Amazon Prime membership, this might be incentive to sign up. Depending on how much shopping you do from Amazon, the free two-day shipping can help you save a significant amount of money. Combine that with the 2% increase in earnings, and you could potentially justify the $99 Amazon Prime membership fee pretty quickly. On the other hand, if you don’t shop at Amazon often, the rewards might not justify that defacto $99 annual fee. And, of course, the same rule about carrying a balance applies: If you’re prone to doing so, a rewards credit card isn’t really your best recourse. They tend to tout higher APRs and you’ll just be losing cash back points of miles to interest.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.