Whether the Amazon card makes sense depends on how much you spend at Amazon and whether you'll use the other rewards

The Amazon credit card (officially the Amazon Prime Rewards Visa Signature Card or the Amazon Prime Store Card, depending on which version) gives you cash back on Amazon purchases and at Whole Foods, plus a smaller reward rate everywhere else. The real question isn't whether the card is "good" — it's whether the rewards you'd earn beat what you'd pay in an annual fee, and whether you'd actually use the benefits.

If you spend less than $500 a year at Amazon, the card probably costs you money. If you spend $2,000 or more annually at Amazon, the rewards typically cover the annual fee and then add value on top. The middle ground is where you have to do the math yourself.

Key Takeaways

  • The Amazon Prime Rewards card charges an annual fee (currently $0 for the first year, then $39 per year) and requires an active Prime membership to earn the highest rewards rate.
  • You earn 5% cash back on Amazon and Whole Foods purchases, but only if you're a Prime member; non-members earn 3% on Amazon and 1% elsewhere.
  • The card also earns 2% at gas stations and restaurants and 1% on everything else, which is lower than many competing cards offer.
  • You break even on the annual fee at roughly $800 to $1,000 in annual Amazon spending, depending on whether you use the Whole Foods and other category rewards.
  • The card's main advantage is convenience if you already have Prime and shop at Amazon regularly; its main drawback is that other cards offer higher rewards rates in more categories.

What the Amazon card actually rewards

The Amazon Prime Rewards Visa Signature Card offers 5% cash back on Amazon.com purchases and Whole Foods Market purchases if you're an active Prime member. That's the headline number, and it's genuinely competitive for Amazon shopping. For non-Prime members, the rate drops to 3% on Amazon and 1% everywhere else, which makes the card much less appealing.

Outside of Amazon and Whole Foods, the card earns 2% cash back at gas stations and restaurants, and 1% on all other purchases. This is where the card falls behind. Many competing cards offer 2% cash back on all purchases, or 3% in specific categories like groceries or gas. If you're not spending heavily at Amazon, you're earning less than you could elsewhere.

The cash back comes as a statement credit or can be deposited to your bank account. There's no points system to track or redeem — it's straightforward cash back.

The annual fee and whether it pays for itself

The Amazon Prime Rewards card currently has no annual fee for the first year, then $39 per year after that. This is a real cost you need to factor in. To break even, you need to earn at least $39 in cash back rewards annually.

At the 5% rate on Amazon purchases, you'd need to spend about $780 at Amazon in a year to earn $39 in cash back. If you're also using the Whole Foods 5% rate or the 2% gas and restaurant categories, you'll hit that threshold faster. If you spend less than $500 a year at Amazon and don't use the other categories much, the annual fee will cost you money.

The fee is also waived if you're under 21 or a student with a valid .edu email address, which can make the card worth keeping even at lower spending levels.

How this card compares to other options

The main competitor is the Chase Sapphire Preferred, which charges a $95 annual fee but earns 3% cash back on dining and travel, plus 2% on all other purchases. If you eat out or travel frequently, that card will earn you more despite the higher fee. The Citi Double Cash card earns 2% on all purchases with no annual fee, which beats the Amazon card for non-Amazon spending.

For pure Amazon shopping, no other card beats 5% cash back. But if you're splitting your spending across multiple categories, a flat-rate card like the Citi Double Cash or a card with higher rewards in categories you actually use will often come out ahead.

The Amazon card also comes with Visa Signature benefits like travel insurance and purchase protection, which are standard on most premium cards. These are useful but not unique to Amazon's card.

When the Amazon card makes financial sense

The card is worth keeping if you meet all three of these conditions: you have an active Prime membership, you spend at least $800 to $1,000 per year at Amazon, and you don't have a card that earns higher rewards in the categories where you spend most of your money.

If you're already paying for Prime ($139 per year for annual membership, or $14.99 per month), the card's $39 annual fee is a smaller additional cost. The combination of Prime membership plus the card's 5% Amazon rewards can make sense if Amazon is a regular part of your shopping.

The card is also worth considering if you shop at Whole Foods regularly. The 5% cash back there is rare — most cards earn 1% or 2% at grocery stores. If you spend $400 a year at Whole Foods plus $400 at Amazon, you're earning $40 in cash back just from those two categories, which covers the annual fee.

Reasons to skip the Amazon card

If you don't have Prime, skip this card. The rewards rates drop significantly without membership, and you'd be paying $39 per year for a card that earns 3% on Amazon and 1% everywhere else. That's not competitive.

If you spend less than $500 per year at Amazon, the annual fee will cost you money. The math is simple: if you earn $30 in cash back but pay $39 in fees, you're losing $9.

If you have a card that earns 2% cash back on all purchases with no annual fee, that card will likely earn you more money overall unless Amazon is your dominant spending category. The Amazon card's weakness is that it only excels in one category (Amazon), while other cards offer broader rewards.

What happens if you close the card later

If you open the card, earn rewards for a year, and then decide it's not worth the annual fee, you can close it without penalty. There's no early termination fee. Your cash back rewards stay in your account even after you close the card, so you won't lose anything you've earned.

The main thing to watch is your credit score. Closing a credit card can temporarily lower your score because it reduces your total available credit and may increase your credit utilization ratio. If you're planning to apply for a loan or mortgage soon, closing the card might not be the best timing. But if you're not in that situation, closing the card is straightforward.

Frequently Asked Questions

Do I need Prime membership to use the Amazon card?

You don't need Prime to open the card, but you need an active Prime membership to earn the 5% cash back rate on Amazon and Whole Foods purchases. Without Prime, you earn 3% on Amazon and 1% elsewhere, which makes the card much less valuable. If you don't have Prime, this card probably isn't worth the annual fee.

Can I use this card at stores other than Amazon and Whole Foods?

Yes. You earn 2% cash back at gas stations and restaurants, and 1% on all other purchases. However, these rates are lower than what many competing cards offer, so the Amazon card is best used primarily for Amazon and Whole Foods shopping.

What's the difference between the Prime Rewards card and the Prime Store Card?

The Prime Rewards Visa Signature Card works everywhere Visa is accepted and earns rewards outside of Amazon. The Prime Store Card only works at Amazon and Whole Foods and earns higher rewards there (5% and 2% respectively), but it's less useful if you shop elsewhere. Choose based on where you spend most of your money.

Does the annual fee get waived if I don't use the card?

No. The $39 annual fee charges whether you use the card or not. If you're not using it, close it before the annual fee hits. You won't be charged if the account is closed.

How long does it take to earn back the annual fee?

At 5% cash back on Amazon purchases, you need to spend about $780 in a year to earn $39 in rewards. That's roughly $65 per month. If you also use the Whole Foods or gas/restaurant categories, you'll reach that threshold faster.