What the Amazon Credit Card Actually Rewards

The Amazon credit card comes in two versions: the Amazon Prime Rewards Visa Signature Card and the Amazon Rewards Visa Card (without Prime membership required). Both cards offer cash back on purchases, but the rewards structure and annual fee differ between them.

The Prime version gives you 5% cash back on Amazon.com and Whole Foods purchases if you're a Prime member, 2% at restaurants, gas stations, and drugstores, and 1% on everything else. It costs $139 per year. The standard Amazon Rewards card gives you 3% cash back on Amazon.com and Whole Foods, 2% at restaurants and gas stations, and 1% elsewhere, with no annual fee.

The real question isn't whether the card is "good" in the abstract—it's whether the rewards you'd actually earn outweigh the $139 annual fee if you choose the Prime version, and whether the cash back rate beats what you'd get from a card you already own.

Key Takeaways

  • The Amazon Prime Rewards card costs $139 per year and pays 5% back on Amazon and Whole Foods purchases, but only if you have an active Prime membership.
  • The standard Amazon Rewards card has no annual fee and pays 3% back on Amazon and Whole Foods, making it worth considering if you don't have Prime or shop there infrequently.
  • You break even on the $139 annual fee only if you earn at least $139 in cash back per year, which requires roughly $2,800 in combined Amazon and Whole Foods spending.
  • The card's rewards outside Amazon and Whole Foods (2% and 1%) are lower than what many competing cards offer, so your non-Amazon spending matters to the overall value.
  • Amazon credit cards report to the three major credit bureaus, so on-time payments help your credit score, but late payments hurt it like any other card.

The Math on the Annual Fee

The $139 annual fee on the Prime version is the first hurdle. You need to earn at least $139 in cash back to break even. At 5% back on Amazon and Whole Foods, that means you need to spend $2,780 combined at those two places per year, or about $232 per month.

If you spend less than that, the standard Amazon Rewards card (no annual fee) is the better choice. If you spend more, the Prime version may save you money compared to the standard card, but only if you're already paying for Prime membership for other reasons. If you're considering Prime just to justify the credit card, the math usually doesn't work—Prime costs $139 per year on its own.

The 2% cash back at restaurants and gas stations sounds useful, but it's not competitive. Most cash back cards offer 2% on all purchases with no annual fee, or 3% on specific categories. If you have a card like that already, the Amazon card's 2% category is redundant.

When the Amazon Card Makes Practical Sense

The card works best for people who already have Prime membership and spend heavily at Amazon and Whole Foods. If you buy groceries at Whole Foods regularly and order from Amazon multiple times a month, the 5% back adds up quickly. A household spending $300 per month at those two places earns $180 per year in cash back—enough to cover the annual fee and pocket $41.

The card also works if you're consolidating your spending. Some people carry multiple cards for different categories (one for groceries, one for gas, one for everything else). If you can shift a significant portion of your spending to Amazon and Whole Foods, the 5% rate might beat what you'd earn spreading purchases across several cards.

The standard Amazon Rewards card (no annual fee) makes sense if you shop on Amazon regularly but don't have Prime, or if you have Prime but don't spend enough to justify the fee. The 3% back on Amazon is still better than most cards offer, and there's no annual cost to carry it.

How the Card Affects Your Credit

Opening a new credit card temporarily lowers your credit score because the card issuer pulls a hard inquiry on your credit report and you're adding a new account to your history. The impact is usually small—5 to 10 points—and recovers within a few months if you pay on time.

Once the card is open, on-time payments help your score by showing you manage credit responsibly. Late payments hurt it significantly. The card reports to Equifax, Experian, and TransUnion, so your payment history shows up on all three credit reports.

Carrying a high balance on the card (using a large percentage of your credit limit) also lowers your score, even if you pay on time. If you open the card, keep your balance below 30% of the limit to avoid this penalty.

Comparing the Amazon Card to Other Options

The main competitors depend on your spending pattern. If you want a flat-rate card with no annual fee, the Citi Double Cash card offers 2% back on all purchases (1% when you buy, 1% when you pay). That's less than Amazon's 5% on Amazon purchases but more than its 1% catch-all rate, and there's no annual fee.

If you want higher rewards in specific categories, the Chase Freedom Unlimited offers 3% cash back on dining and drugstores for the first year, then 1.5%, with no annual fee. The Chase Sapphire Preferred offers 3% on dining and travel but costs $95 per year.

The choice depends on where you actually spend money. If 80% of your spending is Amazon and Whole Foods, the Amazon Prime card wins. If your spending is spread across groceries, gas, dining, and online shopping, a flat-rate card or a card with broader categories might be better.

How to Decide Whether to Open the Card

Start by adding up your annual spending at Amazon and Whole Foods. If it's under $2,780 per year, the standard Amazon Rewards card (no fee) is worth considering, but the Prime version is not. If it's over $2,780 and you already have Prime for other reasons, the Prime version may save you money compared to what you'd earn with a different card.

Next, look at your spending outside Amazon and Whole Foods. If you spend heavily on groceries, gas, or dining, check whether another card offers better rewards in those categories. A card that pays 2% on all purchases might beat the Amazon card's 2% at restaurants and gas stations plus 1% everywhere else, depending on your mix.

Finally, consider whether you'll actually use the card. If you're tempted to open it just to see if it works, you're more likely to carry an unused card and pay an annual fee for nothing. Open it only if you're confident you'll use it regularly enough to earn back the fee.

What Happens After You Open the Card

Once approved, you can use the card when ready for online purchases at Amazon.com. Physical cards arrive in 7 to 10 business days. You can add the card to your Amazon account in the payment settings so it's your default card for purchases.

Cash back appears in your account as a statement credit, usually within one billing cycle of the purchase. You can use it to pay your balance, or let it accumulate and explore it all at once. There's no separate redemption step—the cash back is automatic.

If you decide the card isn't working for you, you can close it anytime. There's no penalty for closing a credit card, though it will lower your credit score slightly because you're reducing your available credit. Wait at least a few months after opening to close it, so the hard inquiry's impact has already faded.

Frequently Asked Questions

Do I need to be a Prime member to get the 5% back?

Yes. The 5% cash back on Amazon and Whole Foods only applies if you have an active Prime membership. If your Prime membership lapses, your cash back rate drops to 3% on those purchases. The Prime Rewards card is designed to work together with Prime, not as a replacement for it.

Can I use the Amazon card outside Amazon and Whole Foods?

Yes, but the rewards are lower. You get 2% back at restaurants and gas stations, and 1% on all other purchases. Those rates are not competitive with other cards, so the Amazon card is best used primarily at Amazon and Whole Foods, with other cards handling your other spending.

What's the difference between the Prime and standard Amazon cards?

The Prime version costs $139 per year and pays 5% back on Amazon and Whole Foods. The standard version has no annual fee and pays 3% back on those two places. Choose the Prime version only if you spend enough at Amazon and Whole Foods to earn back the fee, and you already have Prime membership for other reasons.

Does opening the card hurt my credit score?

Opening any credit card temporarily lowers your score by a small amount (usually 5 to 10 points) because of the hard inquiry and new account. The impact fades within a few months. After that, on-time payments help your score, while late payments or high balances hurt it.

Can I get the cash back as a statement credit or do I have to use it at Amazon?

The cash back appears as a statement credit on your bill, so you can use it to pay down your balance or cover other charges. You're not required to spend it at Amazon. You can also let it accumulate and explore it all at once whenever you choose.