The Amazon card works best if you shop on Amazon regularly and can pay your full balance every month

The Amazon Prime Rewards Visa Signature Card (issued by Chase) gives you 5% cash back on Amazon purchases if you are a Prime member, 2% at gas stations and restaurants, and 1% everywhere else. There is no annual fee. The card is worth opening only if the cash back you earn exceeds what you would pay in interest and fees — which means you need to pay off what you owe each month, and you need to spend enough on Amazon to make the rewards meaningful.

If you carry a balance month to month, interest charges will erase the cash back. The card's APR (annual percentage rate) ranges from 16.99% to 24.99% depending on your credit score. A $1,000 balance at 20% APR costs you $200 a year in interest alone. You would need to earn $200 in cash back just to break even — which means spending $4,000 on Amazon in a year if you are a Prime member. Most people do not spend that much.

There is also a non-Prime version of the card that offers 3% cash back on Amazon purchases instead of 5%. That version makes even less sense unless you do not have Prime, because the difference between 3% and 5% on a $2,000 annual Amazon spend is only $40.

Key Takeaways

  • The card has no annual fee, but you only come out ahead if you pay your full balance every month and shop on Amazon regularly.
  • Prime members earn 5% cash back on Amazon purchases, 2% at gas stations and restaurants, and 1% elsewhere; the APR ranges from 16.99% to 24.99%.
  • If you carry a balance, interest charges will cost you far more than the cash back you earn, making the card a net loss.
  • You need to spend roughly $4,000 per year on Amazon just to earn enough cash back to offset a typical interest charge on a carried balance.

How the cash back actually works

Cash back posts to your account as a statement credit, not as a deposit to your bank account. You see it reflected on your bill as a reduction in what you owe. If you have a $500 balance and earn $25 in cash back, your new balance becomes $475. You do not receive the $25 as money in hand unless you request a check, which most cardholders do not do.

The 5% rate applies only to purchases made on Amazon.com and the Amazon app — not to third-party sellers using Amazon's marketplace, not to Whole Foods purchases, and not to Amazon Business purchases. If you buy from a seller who uses Amazon's platform but is not Amazon itself, you earn 1% cash back. This distinction matters if you buy used items or niche products from marketplace sellers.

Cash back accrues month to month and never expires as long as your account remains open. You do not have to reach a minimum to redeem it. The moment you earn $1, it is available as a statement credit.

When interest charges wipe out the rewards

The math on carrying a balance is straightforward and brutal. Suppose you spend $2,000 on Amazon in a month as a Prime member. You earn $100 in cash back. But if you do not pay the full $2,000 by the due date, you owe interest on the unpaid portion starting immediately — there is no grace period on cash advances, though regular purchases do have a grace period if you pay in full each month.

At a 20% APR, a $1,000 balance costs $16.67 in interest per month. Over a year, that is $200. You would need to earn $200 in cash back just to stay even. For a Prime member, that means spending $4,000 on Amazon annually. For a non-Prime member earning 3% cash back, you would need to spend $6,667 to earn $200.

Most households do not spend that much on Amazon in a year. The U.S. Census Bureau reported that the median household spent roughly $1,500 to $2,000 on online shopping in 2022 across all retailers combined. If Amazon represents half of that, you are at $750 to $1,000 annually — nowhere near the threshold where the card pays for itself if you carry a balance.

Comparing the Amazon card to other rewards cards

The Amazon card's 5% cash back on Amazon purchases is competitive, but only within a narrow use case. The Chase Sapphire Preferred offers 3% cash back on dining and travel, which appeals to people who spend heavily in those categories. The Citi Double Cash offers 2% cash back on all purchases with no category restrictions, which works better if your spending is spread across many retailers.

If you shop on Amazon but also spend significantly at other retailers, a flat 2% card might earn you more total cash back than the Amazon card's mix of 5% on Amazon, 2% on gas and restaurants, and 1% elsewhere. A household that spends $3,000 on Amazon and $7,000 elsewhere would earn $150 from Amazon plus $70 from other categories on the Amazon card, totaling $220. The same household on a flat 2% card would earn $200 total — less, but only by $20, and without the complexity of tracking category bonuses.

The Amazon card also lacks travel protections and purchase protections that premium cards offer. There is no trip cancellation insurance, no baggage delay reimbursement, and no extended warranty on purchases. If those features matter to you, a card like the Sapphire Preferred or American Express Gold may be worth an annual fee.

How closing the card affects your credit and account history

If you open the Amazon card and later decide it is not worth keeping, closing it will affect your credit score in two ways. First, your available credit decreases, which raises your credit utilization ratio — the percentage of your total credit limit that you are using. If you have $10,000 in total credit limits across all cards and use $2,000, your utilization is 20%. Closing a card with a $5,000 limit raises that to roughly 29%, which can lower your score by a few points.

Second, the card remains on your credit report for seven years after closing, but it stops building account age. Your credit score factors in the average age of your accounts. Closing a new card does not hurt as much as closing an old one, but it still slows the growth of your average account age.

The damage is usually small — typically 5 to 15 points — and temporary. Your score recovers within a few months as you continue paying other accounts on time. Closing the card is not a major decision from a credit perspective, especially if you have other cards with longer histories.

Annual fees and other costs to watch

The Amazon Prime Rewards card has no annual fee, which is its main advantage over premium rewards cards. However, there are other costs that can add up. If you miss a payment, the late fee is up to $40 for the first late payment and up to $41 for subsequent ones within six billing cycles. If you pay late, you also lose the grace period on new purchases, meaning interest accrues immediately on anything you charge going forward.

If you use the card for a cash advance — withdrawing money at an ATM or getting cash from a bank — you pay a fee of either $10 or 5% of the amount withdrawn, whichever is greater. You also pay interest on the full amount immediately, with no grace period. A $200 cash advance costs at least $10 in fees plus interest from day one.

Foreign transactions carry a 3% fee if you use the card outside the United States. If you travel internationally, this adds up quickly. A $1,000 purchase abroad costs $30 in fees alone.

The Prime membership requirement and what it means

To earn the 5% cash back rate, you must be an active Amazon Prime member. Prime membership costs $139 per year (or $14.99 per month if you pay monthly). If you are not already a Prime member and are considering the card partly to justify a Prime subscription, the math changes. You would need to earn enough cash back to cover both the card's value and the Prime membership cost.

If you spend $2,000 on Amazon annually as a Prime member, you earn $100 in cash back from the card. Prime membership costs $139. You are $39 in the red before considering any other benefit of Prime. You would need to spend roughly $2,800 on Amazon annually just to break even on the combination of the card and Prime membership.

If you already have Prime for other reasons — fast shipping, Prime Video, Prime Music — then the card's 5% rate is a pure bonus. But if you are considering Prime solely to maximize the card's rewards, the economics do not work unless you are a heavy Amazon shopper.

Frequently Asked Questions

Does the Amazon card have a sign-up bonus?

Chase occasionally offers a sign-up bonus on the Amazon card, typically $100 to $150 in statement credits after you spend a certain amount in the first few months. The offer changes periodically and is not may provide. Check the current offer on Chase's website before applying, as the bonus is one of the few ways the card can provide immediate value to a new cardholder.

What happens to my cash back if I close the card?

Any cash back you have already earned remains on your account as a statement credit and can be used to pay down your balance. Cash back does not disappear when you close the card. However, you stop earning new cash back once the account is closed.

Can I use the Amazon card to pay my Amazon Business account?

No. Amazon Business purchases earn only 1% cash back, not the 5% rate for regular Amazon purchases. If you run a business and use Amazon Business for supplies, the card offers no advantage over a flat 2% rewards card.

Does the card offer a 0% introductory APR period?

No. The Amazon card does not include a 0% intro APR offer on purchases or balance transfers. Your APR applies from the first day you carry a balance. If you are looking for a card with an introductory period to pay down existing debt, this is not the right choice.

What is the difference between the Prime and non-Prime versions?

The Prime version offers 5% cash back on Amazon purchases; the non-Prime version offers 3%. Both have no annual fee. The non-Prime version is only useful if you do not have Prime and do not plan to get it. The 2% difference in cash back rarely makes up for the cost of Prime membership if you are not already a subscriber.