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Update 1/11/17 11:38am: Customers who sign up for this card will receive a $70 Amazon.com gift card instantly upon approval.
Today, Amazon’s unveiling a new co-branded credit card from Chase: the Amazon Prime Rewards Visa Signature Card. It will be available exclusively to Amazon Prime members and will replace the current Amazon Rewards Card for existing cardholders with an eligible Prime membership. The new metal card will be issued to Prime members, who can continue using their current Amazon card (with the new benefits) until a metal replacement arrives.
Here’s an overview of this new card’s benefits:
- 5% back on all Amazon.com purchases (for Prime members)
- 2% back at restaurants, gas stations and drugstores
- 1% back on all other purchases
- No cap on rewards earned
- Rewards never expire and are redeemable on hundreds of millions of products at Amazon.com
- No foreign transaction fees when traveling abroad or for cross-border shopping
- No annual credit card fee
- Zero fraud liability
- Benefits including travel and purchase protections, as well as 24/7 concierge service, through Visa Signature
Is it worth it?
This card is definitely an improvement over the Amazon Rewards Card, which earns a lower 3% back on Amazon purchases (in addition to the same 2% back at restaurants, gas stations and drugstores). The new Prime Rewards Card also waives foreign transaction fees — and this perk will extend to the older Amazon Rewards Card as well (the card previously charged a 3% fee per transaction).
While the new Amazon Prime Rewards Card doesn’t technically have an annual fee, you need to be a Prime member to sign up — Prime will run you $99 per year unless you’re sharing an account with someone in your household. If you’re already a member or have been considering signing up, this shouldn’t be a huge barrier to entry, but if you aren’t sure that you can maximize Prime benefits such as expedited shipping and Prime Video, you probably don’t shop at Amazon frequently enough for the membership to be worth it.
Ultimately, the Prime Rewards Card’s main draw is the ability to earn an uncapped 5% back on all Amazon purchases — the same rate available with the Amazon Prime Store Card. Your rewards are actually earned as points rather than cash back, though each point is worth 1 cent so you are indeed earning a 5% return on purchases with the retailer. This makes the card a solid option for spending in this category, though there are some other competitive options. For instance, the Discover it Card earns 5% cash back on up to $1,500 spent on rotating quarterly bonus categories, which have included Amazon in the past. Even better, during your first year of cardmembership, Discover will match your cash back at the end of the year, meaning you could effectively get a 10% return on Amazon purchases if the retailer is a bonus category again this year. Still, note that there is a cap on your bonus cash-back earnings with this card, while there isn’t with the Prime Rewards Card.
The Chase Freedom Card is another option to consider; like the Discover it Card, it features quarterly bonus categories, and you’ll also earn 5% back on the first $1,500 spent. Amazon’s been included in the bonus categories before, and there’s no reason to think it won’t be again in the future. What makes this card potentially even more rewarding, though, is that you can redeem your earnings as Ultimate Rewards points rather than straight cash back if you also hold a premium Chase card like the Chase Sapphire Preferred, Chase Sapphire Reserve or Chase Ink Business Preferred. Since TPG values Ultimate Rewards at 2.1 cents apiece, that would equal an outstanding return of 10.5% on the first $1,500 in Amazon purchases when the retailer is a featured bonus category. If you were to maximize these capped bonuses on the Freedom and the Discover it Card though, the Prime Rewards Card would be a great go-to for additional spending with Amazon.
Will you be signing up for the Amazon Prime Rewards Card?
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards