How to choose between the Amazon Rewards Visa, Amazon Prime Rewards Visa and their alternatives
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The Amazon Rewards Visa gives you 3 percent cash back on every Amazon purchase, and the Amazon Prime Visa Signature ups that ante, offering 5 percent cash back for Amazon Prime account holders.
You may be wondering: Which of these is the best card to use on Amazon purchases? For that matter, are there any other cards out there that could earn an even better rewards rate on Amazon purchases?
While the deck seems to be stacked clearly in favor of Amazon credit cards, there are a few alternatives that may surprise you.
Here are the best credit cards for Amazon.com purchases:
- Amazon Rewards Visa
- Amazon Prime Rewards Visa Signature
- Discover it card
- Chase Freedom
Comparing Amazon cards
Let’s start by comparing the regular Amazon card to the Amazon Prime card. While the 5 percent cash back rate on the Amazon Prime Visa Signature card seems to be the best way to go, this is not necessarily the case. The best option mostly boils down to your shopping habits on Amazon.
Here’s a breakdown of the two cards:
|Amazon rewards card versus Amazon Prime rewards card|
Amazon Rewards Visa
Amazon Prime Rewards Visa Signature
|Sign-up bonus||$50 Amazon.com gift card when you’re approved||$70 Amazon.com gift card when you sign up|
|Estimated yearly rewards value ($1,325 monthly spend, including sign-up bonus)||$253||$225|
|Who should get this card?|
As you can see, though the Amazon Prime card offers a better cash back rate on Amazon purchases as well as a $70 gift card for new cardmembers, you also need to figure in the cost of Amazon Prime membership. This can lower the overall value of the Prime card for you, depending on your spending habits and how much you value Prime membership by itself.
Best for current and aspiring Amazon Prime members: Amazon Prime card
For current Amazon Prime members, it’s a no-brainer: 5 percent cash back with the Amazon Prime card is the way to go. Also, Prime membership comes with valuable benefits, such as free two-day shipping on eligible purchases, free streaming of movies and TV shows with Prime Video, and Amazon Family discounts on diapers and baby items. Shelling out the fee for Prime membership and getting the Prime card is a good deal if you value these types of services.
Best if you spend more than $99 per year on Amazon shipping: Amazon Prime card
Amazon Prime comes with some awesome shipping benefits. Not only do you get free standard shipping on qualified Amazon purchases of any amount, but you also qualify for free two-day shipping and – in certain cities – free one-day, same-day and two-hour deliveries.
|Amazon Prime free shipping|
|Same-Day Delivery||Free in certain cities|
|Two-Hour Delivery||Free in eligible ZIP codes|
|One-Day Shipping||Free in certain cities|
|Saturday Shipping||Price varies by item size and weight – as low as $7.99 per item|
|Standard Shipping (4-5 business days)||Free|
The convenience of getting expedited shipping on orders of any size is very valuable, and probably sufficient alone to justify the cost of a $119 fee for many Prime members.
However, if you are weighing shipping costs to the costs of Prime membership, note that free shipping only extends to qualified items (items that you see the Prime logo next to in your shopping cart). While this applies to a lot of items on Amazon, there are many items that it doesn’t apply to – e.g., items sold and shipped by outside vendors.
Also, be aware that Amazon already offers free standard shipping to non-Prime members for orders over a certain size. And, to compete with Walmart and Target, Amazon recently lowered the threshold for free shipping to $25 in qualified purchases.
In other words, you’ll need to do a close accounting of your shipping costs to see if the $119 Prime membership fee makes sense. Unless you frequently make small purchases from Amazon, Prime membership may not outweigh your shipping costs.
Best for Amazon shoppers who spend more than $5,950 per year: Amazon Prime card
For everyone else, the value breaks down to how much money you spend at Amazon on a yearly basis.
For cardholders purely interested in the value of the cash back rewards on the Amazon Prime card versus the cost of Prime membership, we figure that the magic number is $5,950 per year (roughly $496 per month). Here’s why: At $5,950 in spending, the amount of cash back that you can earn with the Amazon Prime card minus the cost of the annual membership fee equals the cash back that you can earn with the regular Amazon Visa card.
Here’s the math for you:
Amazon Visa card cash back
Amazon Prime card cash back
|$5,950/year x 3% cash back = $178.50||$5,950/year x 5% cash back – $119 annual fee = $178.50|
If you spend more than $5,950 on Amazon purchases per year, your Amazon Prime membership stands to net a better value for you. However, that’s a hefty amount of spending on Amazon! This 2014 Report from Consumer Intelligence Research Partners indicates that the average Amazon member spends about half that much on Amazon, while non-members spend about a fifth of that amount. If $5,950 is too rich for your budget, the regular Amazon Visa may be the better way to go.
For everyone else: The regular Amazon Visa card is a good deal
Though the Amazon Visa card doesn’t sport a flashy 5 percent cash back rate, it does offer a pretty good 3 percent cash back rate on Amazon purchases, which is still higher than most of the other best rewards cards. The card also offers a $50 Amazon gift certificate for signing up, the same seamless redemption options as the Amazon Prime card and many of the same purchase protections and Visa Signature benefits, without requiring you to commit to a Prime membership.
It’s a good deal, though there is a smattering of opportunities to do better than the card’s 3 percent cash back rate. Read on to see how.
Alternative #1: Discover it card: 10 percent cash back on Amazon purchases in your first year
Double your cash back at end of first year
Where it comes out ahead:The potential 10% cash back you get on Amazon purchases in the last quarter of the card’s first year beats every other card (but only applies during the first year).Read Review
|Estimated yearly rewards value ($15,900 spend)|
If you are signing up for the Discover it CashBack Match card for the first time and you plan to do a lot of shopping on Amazon in October through December, you are in for the ultimate cash back discount on Amazon purchases. Upon enrollement, the card offers 5 percent cash back on up to $1,500 in combined spending in categories that rotate quarterly, and the fourth quarter category for 2018 (October through December) includes Amazon purchases. The card then doubles all the cash back that you earn in the first year, so, essentially – you earn 10 percent cash back on Amazon purchases for a quarter of the first year.
No other card offers a 10 percent cash back rate on Amazon purchases. Unfortunately, the 10 percent rate only applies in the first year during the last quarter. After that, the rate drops to 5 percent. Plus, the 5 percent on Amazon purchases is only active October through December, which happens to be peak season for holiday shopping. Still, 5 percent by itself is not a bad deal, and it beats the 3 percent cash back rate on the regular Amazon Visa card at least for a quarter of the year.
Alternative #2: Chase Freedom card: 5 percent cash back on Amazon purchases
Where it comes out ahead:You can transfer your points from the Chase Freedom card to other Ultimate Rewards cards and get a 1.26 cent boost on your point value, for an average value of 6.3 cents per point.Read Review
|Estimated yearly rewards value ($15,900 spend) |
Like the Discover it card, the Chase Freedom card offers a 5 percent cash back rate on up to $1,500 in combined spending on quarterly rotating categories, and has included Amazon purchases in its fourth quarter category in the past. The Chase Freedom card is an Ultimate Rewards card, which means that the card’s rewards points can be transferred to other Chase cards, including the Chase Sapphire Preferred card, making the points extremely valuable.
The Chase Sapphire Preferred card offers even more options, letting you transfer Ultimate Rewards points to a variety of airline partners to redeem for airfare at a much better value than 1 cent per point. The value of Ultimate Rewards points can range as high as 1.5 cents per point if you redeem them for travel through the Ultimate Rewards portal and even higher if you transfer them to airline partners to redeem for airfare.
We estimate an average value of 1.26 cents per Ultimate Rewards point, which means each dollar of spending on Amazon with the Chase Freedom nets you about 6.3 cents of value – much better than 5 cents per dollar with the Amazon Prime card.
Bonus tip: Buy Amazon gift cards
An additional way to earn a bonus on Amazon purchases with an outside credit card is to purchase Amazon gift cards at stores where your card offers a category bonus, such as office supply and grocery stores.
While some cardholders have success with this tactic, there’s no guarantee that your particular store will offer Amazon gift cards or allow you to purchase gift cards with a credit card. (Fraud concerns with gift cards have led some retailers to bar their purchase with credit cards.) However, it’s worth checking the gift card rack, especially if you are trying to collect points on a particular card.