The Amazon Credit Card Has No Annual Fee

The Amazon.com Store Card and the Amazon Prime Rewards Visa Signature Card both charge zero dollars per year to hold them. You pay nothing to open the account, nothing to keep it open, and nothing if you never use it. The only money you spend is interest on a balance you carry month to month — and that only happens if you don't pay in full by the due date.

This matters because some rewards cards do charge annual fees, and those fees can be worth it if the rewards are generous enough. The Amazon cards bet that you'll spend enough to make the rewards valuable without needing to charge you upfront. Whether that bet pays off depends on how much you actually shop and where.

Key Takeaways

  • Both Amazon credit cards — the Store Card and the Prime Rewards Visa — have no annual fee, ever.
  • You only pay interest if you carry a balance past your due date; paying in full each month costs you nothing.
  • The Store Card gives 5% back on Amazon.com purchases but only works at Amazon and Whole Foods, so the rewards are narrow.
  • The Prime Rewards Visa gives 5% back on Amazon and Whole Foods, 2% at restaurants and gas stations, and 1% everywhere else, making it useful beyond Amazon.
  • No annual fee does not mean no cost — a high interest rate on a carried balance can cost far more than any annual fee.

How the Two Amazon Cards Differ

Amazon offers two different cards, and they have different rewards structures. The Amazon.com Store Card is a store card — it only works at Amazon.com, Amazon Fresh, and Whole Foods. It gives you 5% cash back on those purchases. It has no annual fee.

The Amazon Prime Rewards Visa Signature Card is a Visa, so it works anywhere Visa is accepted. It gives 5% back on Amazon and Whole Foods, 2% back at restaurants and gas stations, and 1% back on everything else. It also has no annual fee. This card requires an Amazon Prime membership to get the 5% rate; without Prime, you get 3% on Amazon instead.

Both cards are issued by Chase. Both have no annual fee. The choice between them depends on whether you want rewards only at Amazon or rewards everywhere you shop.

When No Annual Fee Matters Less Than Interest Rate

A zero annual fee is only an advantage if you actually pay your bill on time. The moment you carry a balance, the interest rate becomes the real cost of the card. Both Amazon cards charge interest rates that vary by person — typically in the range of 16% to 24% APR, depending on your credit score and history. That means if you owe $1,000 and pay it off over a year, you could pay $160 to $240 in interest alone.

Compare that to a card with a $95 annual fee but a lower interest rate. If you never carry a balance, you lose $95 a year. If you carry $1,000 for a year, the higher interest rate could cost you more than $95. The annual fee is not the real question — the question is whether you'll pay your full balance each month.

If you tend to carry balances, a card with a lower interest rate and an annual fee might actually cost you less money than an Amazon card with no annual fee. The no-fee part only saves you money if you use the card responsibly.

Other Costs Beyond the Annual Fee

Neither Amazon card charges a fee for late payments, foreign transactions, or balance transfers — at least not in the standard sense. But they do charge interest on all of these if you don't pay in full. A late payment also damages your credit score, which can raise the interest rates on all your other cards and loans.

If you use the card to take a cash advance (withdrawing money from an ATM), you'll pay a cash advance fee — usually 3% of the amount withdrawn, with a minimum of $5. Cash advances also start accruing interest immediately, with no grace period like you get on purchases. Avoid cash advances unless you have no other option.

The card itself is free. Everything else depends on how you use it.

Why Amazon Doesn't Charge an Annual Fee

Amazon makes money on these cards in two ways: interest from people who carry balances, and a percentage of every purchase you make (called an interchange fee, which the merchant pays to the card issuer). Because Amazon owns both the card and the store, they're betting that enough people will spend enough money that they don't need to charge an annual fee to make the card profitable.

This is a common strategy for store cards and cards aimed at high-spending customers. The company would rather have more people using the card than fewer people paying an annual fee. For you, that means no barrier to opening the account — but it also means the card issuer is counting on you to spend a lot or carry a balance.

How to Use an Amazon Card Without Paying Interest

The only way to avoid all costs on an Amazon card is to treat it like a debit card: spend only what you can pay off in full each month, then pay the full balance before the due date. Set a reminder on your phone for a few days before the due date, or set up automatic payments from your bank account.

If you're not sure you can pay the full balance, don't use the card for that purchase. A 20% interest rate is expensive, and no rewards rate is high enough to make up for it. The 5% cash back on Amazon purchases sounds good until you realize that carrying a $500 balance for a year costs you $100 in interest — and the cash back on that $500 was only $25.

The card is a tool. A zero annual fee makes it an easy tool to pick up, but a high interest rate makes it an expensive tool to misuse.

Frequently Asked Questions

Can I get the 5% cash back without paying an annual fee?

Yes. Both Amazon cards have no annual fee and both offer 5% cash back on Amazon and Whole Foods purchases. The Prime Rewards Visa requires an active Prime membership to get the 5% rate on Amazon, but Prime is a separate subscription — not a credit card fee.

What happens if I don't use the card for a year?

Nothing. There's no annual fee, so the card won't cost you money just for existing. The card issuer might close the account after a long period of inactivity, but they won't charge you for it. If you want to keep the account active, use it for at least one small purchase every few months.

Is there a fee if I pay my bill late?

There's no separate late fee, but you will pay interest on the unpaid balance at the card's APR. A late payment also gets reported to credit bureaus and can lower your credit score, which affects your ability to borrow money in the future. Always pay at least the minimum by the due date.

Do I have to have Amazon Prime to use the Amazon credit card?

No. The Amazon.com Store Card requires no Prime membership. The Prime Rewards Visa works without Prime, but you'll get 3% cash back on Amazon instead of 5%. If you already have Prime for shipping and video, the Visa makes more sense; if you don't, the Store Card is simpler.

What's the difference between the Store Card and the Visa if both have no annual fee?

The Store Card only works at Amazon, Amazon Fresh, and Whole Foods, but gives 5% back. The Visa works everywhere and gives 5% at Amazon and Whole Foods, 2% at restaurants and gas, and 1% elsewhere. Choose the Visa if you want rewards outside Amazon; choose the Store Card if you only shop at Amazon and want to keep things simple.