Is the Amazon Prime Rewards Visa Signature Card worth it?
If you’re a big fan of Amazon.com, then you might be considering one of the best online shopping credit cards, the Amazon Prime Rewards Visa Signature Card. This card offers the highest rate of rewards for Amazon.com purchases, plus a handful of other categories.
But, with so many rewards credit cards out there, how can you tell if this card deserves a place in your wallet? Let’s look at this card’s features to see what it offers and who’d benefit most from the rewards, perks and benefits.
What does the Amazon Prime Rewards Visa Signature Card offer?
In addition to giving cardholders 5 percent back on Amazon.com and Wholefoods purchases, you’ll also earn 2 percent back at restaurants, gas stations and drugstores and then 1 percent back on all other purchases. The best part? There’s no limit to the amount of rewards that you can earn. As a welcome bonus, you’ll get a $100 Amazon.com gift card upon the approval of your application for the card.
What stands out about this store credit card is that although it’s tied to one main retailer, you’ll still earn rewards on a vast number of items sold on one of the world’s largest marketplaces, Amazon.com. Plus, if you’re into the upscale, natural food selection Whole Foods has to offer, there’s potential to save a great deal of money there, too. Also offering 2 percent back at restaurants, gas stations and drugstores, plus one percent back on all other purchases, this card could be very valuable for the right person.
Although you may have figured out the difference by now, this card should not be confused with the “closed-loop” Amazon.com Store Card. This card can only be used at Amazon.com and has vastly different terms than the Amazon Prime Rewards Visa Signature Card. The most significant difference is that you can only use it to shop on Amazon.com and nowhere else.
Amazon Prime Reward card highlights:
- Rewards rate: 5 percent back at Amazon.com and Whole Foods Market; 2 percent back at restaurants, gas stations and drugstores; 1 percent back on all other purchases
- Welcome offer: $100 Amazon gift card upon approval
- Annual fee: $0 ($119 Amazon Prime subscription required)
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 14.24 percent to 22.24 percent variable
Since it’s part of the Visa Signature credit card family, you’ll also get extra benefits including extended warranties, zero fraud liability, roadside dispatch, lost or stolen card reporting, travel and emergency assistance services, emergency card replacement and auto rental collision damage waiver, to name a few.
Earning rewards is as easy as using your Amazon Prime Rewards card when spending in the bonus categories that include Amazon.com, Whole Foods, restaurants, drugstore, gas station purchases and all other general purchases. You don’t need to sign up for anything or activate any bonus categories—just swipe and earn rewards.
Redeeming rewards is a little more complicated. With this card, you aren’t earning cash back or statement credits but points that can be redeemed in various ways.
You can redeem your points at a 1:1 value toward cash back, travel, gift cards or Amazon purchases upon checkout, but there are many Amazon.com items you can’t use your rewards points for, like Amazon Music and Kindle downloads.
There’s no minimum rewards balance to redeem for cash back or Amazon purchases, and you can typically maximize your cash back on Amazon by taking advantage of the site’s “subscribe and save deals.” You can also redeem points for gift cards from other retailers on Amazon’s site for extra discounts and rewards.
How much could I earn with the Amazon Prime Rewards Visa Card?
Whenever we analyze if a card is “worth it” or not, the main factors we consider include:
- Spending required to justify the annual fee
- Spending habits of the cardholder
- The opportunity cost of skipping out on another, better rewards card
According to the U.S. Bureau of Labor Statistics, the average household earned $84,352 in 2020 while spending $61,334. This included $7,316 in combined food spending ($4,942 at home and $2,375 away from home), $1,568 in gasoline and motor oil and $1,434 in apparel and services.
So if we use the 2020 figures for as our spending model, an Amazon Prime Rewards cardholder could expect to earn around $247 back from grocery spending at Whole Foods, $48 back from restaurant spending, $31 back for gas station spending and $36 back for apparel spending at Amazon.com (using half of the $1,434 figure), then $7 back on services (the other half of the $1,434 figure) for a total of $369 in rewards for the year. Subtracting the cost of your Prime membership—$119—you would net $250 in rewards.
Of course, these calculations are based on average spending numbers. So there’s a lot of variation in terms of what you can really net in rewards. For one, you could exclude the cost of your Amazon Prime membership in your calculations—especially if it’s an expense you tend to have anyway. Secondly, you could consider your $100 Amazon gift card welcome bonus as another way to offset the cost of your Prime membership, at least in the first year.
Finally, these numbers could be very low for your Amazon spending. According to data from Bank of America, the average Amazon Prime member spends $1,968 per year on Amazon, more than four times non-Prime members do. That means that the average Prime member could earn $98 in rewards from Amazon.com purchases alone, not even factoring in rewards from the other spending categories.
How does the Amazon Prime Rewards card compare to other credit cards?
Most often, this card is compared to the Capital One Walmart Rewards Mastercard, which offers:
- 5 percent back on purchases made on Walmart.com (including Walmart Grocery Pickup and Delivery)
- 5 percent back on in-store purchases using Walmart Pay for the first 12 months of card ownership as an introductory offer (unlimited 2 percent back on in-store purchases after that)
- 2 percent back on restaurants and travel
- 1 percent back on all other purchases
Although it’s difficult to make a perfect apples-to-apples comparison here, one could argue that the rewards categories are very similar. There are just a few nuances that could make this card slightly better for you than the Amazon Prime Rewards card. For one, there’s no membership needed or annual fee for this card, which is a plus.
However, your in-store purchases with Walmart Pay stop earning 5 percent back and drop to 2 percent after 12 months of having the card. But if you don’t mind shopping at Walmart.com to earn rewards, you’ll still earn 5 percent back, which, like the Amazon Prime Rewards card, could still include your grocery spending with Walmart.com grocery pickup and delivery.
If you don’t have a strong preference for a big-box store, you could go with a high-earning rewards card that offers up to 5 percent back on certain spending categories, like the Chase Freedom Flex℠ or the Citi Custom Cash℠ Card. The downsides to these cards are that the bonus categories can change and there is a limit on the amount of rewards you can earn.
Is the Amazon Prime Rewards Visa Signature Card worth it?
This card offers one of the highest rates of cash back for spending categories that are very common for most families. The inclusion of Whole Foods and Amazon Fresh in the card’s 5 percent category make this card great for everyday spending. If you use your credit card for home improvements or travel rewards, there’s still some value, but there are better options out there for spending in these categories.
In other words, if you already have a Prime membership that you find to be worth it, the card will likely complement your spending. If you’re still grappling with the cost of a Prime membership, the rewards you earn with this card can help offset the cost.