An Amazon credit card makes sense if you shop there regularly and can pay your full balance each month

Amazon offers two credit cards through Chase: the Amazon Prime Rewards Visa Signature Card and the Amazon Rewards Visa Card. Both give you cash back on Amazon purchases, but the Prime card gives more back and costs $139 per year. The non-Prime card is free but gives lower rewards rates. Neither card is "good" or "bad" on its own — it depends on your shopping habits, whether you carry a balance, and whether the rewards actually save you money after fees.

The core trade-off is simple: you get cash back on purchases, but only if you use the card strategically. If you carry a balance and pay interest, the rewards disappear into the interest charges. If you rarely shop on Amazon, the annual fee (on the Prime card) costs more than you'll earn back. The card is worth considering only if you already know you'll use it enough to come out ahead.

Key Takeaways

  • The Amazon Prime Rewards card gives 5% cash back on Amazon purchases and Prime Video, but costs $139 per year and requires a Prime membership.
  • The Amazon Rewards card (no Prime required) gives 3% cash back on Amazon purchases and 1% on everything else, with no annual fee.
  • Both cards only make financial sense if you pay the full balance each month — interest charges will erase any rewards you earn.
  • You need to spend roughly $1,400 per year on Amazon with the Prime card just to break even on the annual fee.
  • The card's real value comes from convenience and habit, not from rewards alone — if you'd shop Amazon anyway, the cash back is a bonus.

How the rewards actually work on each card

The Amazon Prime Rewards Visa Signature Card gives 5% cash back on Amazon.com and Whole Foods purchases, 2% at gas stations and restaurants, and 1% everywhere else. You earn the 5% rate only if you have an active Prime membership. The card costs $139 per year. Chase also offers a version without the annual fee, but it gives only 3% back on Amazon purchases instead of 5%.

The Amazon Rewards Visa Card gives 3% cash back on Amazon.com purchases and 1% on everything else. There is no annual fee and no Prime membership required. The rewards rate is lower, but so is the barrier to entry.

Cash back appears as a statement credit or can be deposited to your bank account. It does not expire as long as your account stays open. The catch: if you carry a balance and pay interest, you lose money. A $1,000 purchase at 5% cash back earns you $50, but if you carry that balance for a year at a typical credit card interest rate (around 20%), you'll pay roughly $200 in interest. The math breaks down fast.

When the annual fee actually costs you money

The $139 annual fee on the Prime card is only worth paying if your cash back earnings exceed that amount. To break even, you need to earn $139 in rewards per year. At 5% cash back, that means spending $2,780 on Amazon annually, or about $232 per month. At 2% cash back on other purchases, you'd need to spend $6,950 outside Amazon to earn $139.

Most households do not spend that much on Amazon. If you spend $100 per month on Amazon ($1,200 per year), you earn $60 in cash back at the 5% rate — which means you lose $79 per year after the fee. The free Amazon Rewards card would have earned you $36 in cash back with zero fee, making it the better choice.

The fee also renews every year on your card anniversary. If your spending drops in year two, you're still paying $139. Many people keep the card out of habit and lose money without realizing it.

The interest rate problem that wipes out rewards

Amazon credit cards carry a variable interest rate, which means the rate changes over time. As of now, the rate typically ranges from 17% to 24% depending on your credit score and creditworthiness. That is higher than many other rewards cards because Amazon prioritizes approval for a wider range of credit profiles.

If you carry a balance, interest charges will quickly exceed any rewards you earn. A $2,000 balance at 20% interest costs you roughly $400 per year in interest alone. Even at 5% cash back, you'd need to spend $8,000 on Amazon just to earn $400 back — and that assumes you're not adding to the balance. The card only works if you pay the full statement balance every single month, with no exceptions.

This is not unique to Amazon cards, but it is worth stating clearly: if you are not certain you can pay in full each month, do not open this card. The rewards are a trap if you cannot afford to use them without debt.

How this card compares to other rewards cards

The Amazon Prime card's 5% cash back on Amazon purchases is competitive, but only for Amazon shoppers. The Chase Sapphire Preferred gives 3% cash back on dining and travel, which appeals to different spending patterns. The Citi Double Cash gives 2% cash back on everything with no annual fee and no category restrictions — it is simpler and often better for people who do not concentrate their spending on one retailer.

If you shop on Amazon but also want rewards elsewhere, the Amazon card's 1% or 2% on non-Amazon purchases is lower than cards designed for general spending. You might come out ahead by using the Amazon card only for Amazon purchases and a different card for groceries, gas, and dining.

The real advantage of the Amazon card is not the rewards rate — it is the convenience. If you already shop on Amazon regularly and have Prime, the card integrates into your existing habit. The rewards feel automatic. That psychological benefit is real, but it is not the same as the card being mathematically superior to alternatives.

What happens to your credit when you open this card

Opening any credit card triggers a hard inquiry on your credit report, which temporarily lowers your credit score by a few points (usually 5 to 10 points). The impact fades within a few months. A new account also lowers your average account age, which can affect your score for a year or two.

On the positive side, the card increases your total available credit, which lowers your credit utilization ratio — the percentage of your credit limit you actually use. If you keep the card open and unused, it helps your score over time. If you close it later, you lose that benefit.

The credit impact is usually small compared to the financial impact of carrying a balance or missing a payment. If you're rebuilding credit, opening a new card is not a problem as long as you use it responsibly. If your credit is already strong, the temporary dip is negligible.

Red flags that this card is not for you

Do not open this card if you carry a balance on other cards. Adding another card will not help you pay down debt — it will make it worse. The rewards are not worth the interest you'll pay.

Do not open it if you do not have a Prime membership and do not plan to get one. The free Amazon Rewards card exists for a reason. The Prime card's 5% rate only applies if you're already paying for Prime, so the math changes if you're not a member.

Do not open it if you shop on Amazon fewer than 10 times per year or spend less than $100 per month there. The rewards will not offset the annual fee or the effort of managing another card. A cash-back card with no annual fee and no category restrictions would serve you better.

Do not open it if you tend to forget to pay bills on time. The interest rate is high, and one missed payment will cost you far more than any rewards you earn. If you have a history of late payments, focus on building that habit first before adding another card.

Frequently Asked Questions

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

No. Amazon offers a free card that does not require Prime membership. It gives 3% cash back on Amazon purchases instead of 5%. If you do not have Prime or do not want to pay for it, the free card is the only one that makes sense.

Can I use this card to pay my Amazon Prime membership?

Yes, and you'll earn cash back on the membership fee itself. However, the $139 annual fee on the Prime card still applies, so you're not saving money overall. The free Amazon Rewards card earns 3% on the membership fee with no annual cost.

What if I only use the card for Amazon and pay it off every month?

Then the card works as intended. You earn cash back on purchases you were going to make anyway, and you pay no interest. The only question is whether the rewards exceed the annual fee (if you choose the Prime version). If you spend $232 or more per month on Amazon, the Prime card pays for itself.

Does the Amazon card hurt my credit score?

Opening the card causes a small temporary dip (5 to 10 points) from the hard inquiry. Over time, the card helps your score by increasing available credit and lowering your utilization ratio — but only if you keep the balance low and pay on time. Missing a payment or carrying a high balance will hurt your score far more than opening the card helps it.

Can I downgrade from the Prime card to the free card later?

Yes. Chase allows you to downgrade to the free Amazon Rewards card without closing the account. This is useful if your spending drops and the annual fee no longer makes sense. You keep the same account number and credit history, so there is no new hard inquiry.