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Yes, the Amazon Prime Rewards Visa Signature Card is technically free to own, but you have to be an Amazon Prime subscriber to qualify. Since Amazon recently announced it’s boosting the price of Prime membership from $99 a year to $119 (effective now), I thought I’d take a look to see if this card is still worth the cost.

The answer is…probably.

It’s hard (and actually kind of foolhardy) to make an assessment on the value of the Prime membership based solely on the return you might get using the online retailer’s credit card — because membership includes so many other tangible benefits — but for argument’s sake I’m going to try.

First, let’s look at the card’s features. The Prime Rewards card pays:

  • 5% cash back at Amazon.com and Whole Foods Market
  • 2% back at restaurants, gas stations and drugstores
  • 1% back on all other purchases

There’s no cap on the amount of rewards you can earn, and you can redeem your rewards to pay for all or part of your Amazon purchases. You can also redeem for cash back, gift cards or travel. New cardmembers receive a $70 Amazon.com gift card instantly upon approval.

What You Should Use the Card For

At best, the Prime Rewards card should be a secondary option in your wallet. This should not be your card for everyday spending, as you’ll find many other rewards credit cards offer better returns on both bonus and non-bonus category spending. For example, the Chase Sapphire Reserve gets you 3 points per dollar spent on travel and dining at restaurants, while the Costco Anywhere Visa Card by Citi earns 4% cash back on eligible gas for the first $7,000 per year and then 1% thereafter. You even can beat the 5% cash back at Whole Foods by using the Blue Cash Preferred Card from American Express, which offers 6% cash back at US supermarkets (on up to $6,000 per year in purchases, then 1%).

But you’ll find no card can top the Prime Rewards bonus on spending at Amazon.com. So let’s look at how much you’d have to spend annually at Amazon to justify the higher subscription price.

Earning Your Membership Fee Back

The value of $70 gift card you’ll receive upon signing up goes a long way toward paying off the first-year cost of the card. You’d have to spend about $1,000 at Amazon during your first year to earn enough cash back to pay of the remainder of your Prime subscription cost. Here’s the breakdown:

$119 – $70 / $0.05 = $980.

During subsequent years, you’d have to spend about $2,400 on Amazon merchandise to earn enough cash back to pay for your Prime subscription. Here’s the breakdown:

$119 / $0.05 = $2,380

A 2017 Consumer Intelligence Research Partners analysis found the typical Amazon Prime member spends about $1,300 a year with the retailer. That’s not enough spending to justify getting a Prime membership for the express purpose of getting the credit card.

I spend even less than average, it turns out. In 2017, I spent $615.62 on Amazon, buying both physical items and digital content. Had I used the Prime Rewards card, I would have earned $30.78 in cash back or Amazon credit, well short of either the new or old Prime membership fee.

I may have been better off with the other credit card in Amazon’s lineup, the Amazon Rewards Visa Signature Card. You can get this card without subscribing to Prime. The Amazon Rewards card pays:

  • 3% back at Amazon.com and Whole Foods Market
  • 2% back at restaurants, gas stations and drugstores
  • 1% back on all other purchases

New cardmembers receive a $50 Amazon.com gift card instantly upon approval.

I could get a slightly better return, but I’d have to use the Chase Freedom Unlimited, which earns 1.5% on all purchases, and transfer those points to my Chase Sapphire Reserve account, where each point is worth 2.1 cents on average when you redeem them with travel partners, according to TPG’s latest valuations. That would put the total return on Amazon spending at 3.15%.

Bottom Line

As I mentioned earlier, this exercise in determining whether it’s worth paying the Prime membership fee to get the Prime Rewards card is kind of silly. I’m an Amazon Prime member — and I don’t even buy that much from Amazon. But for people who do enjoy perks like free two-day shipping, this benefit alone could justify the cost of a membership.

I find value in the membership because of the Prime Video and Amazon Music streaming services. This alone is worth the $119 a year to me. An extra $20 hit probably shouldn’t factor in your decision whether to subscribe — especially if you take advantage of all the benefits a membership offers.

Throwing in a rewards credit card on top of that couldn’t hurt, either.

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More Things to Know
  • 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®
  • Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • 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
Intro APR on Purchases
N/A
Regular APR
17.74% - 24.74% Variable
Annual Fee
$0 Intro for the First Year, then $95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent Credit

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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