What the Amazon Credit Card Actually Rewards

The Amazon credit card — officially the Amazon Prime Rewards Visa Signature Card — gives you cash back on purchases, with higher rates at Amazon and Whole Foods. You earn 5% back on Amazon purchases and Whole Foods, 2% at gas stations and restaurants, and 1% everywhere else. The card has no annual fee if you have an active Prime membership; without Prime, there is a $39 annual fee.

The card is issued by Chase, and the cash back appears as a statement credit that reduces what you owe. You do not receive a separate payment — the reward straightforward lowers your bill. If you carry a balance, you pay interest on the full amount before the reward is applied, so the cash back does not offset high interest charges.

Whether this card is worth using depends entirely on where you spend money. If most of your purchases happen outside Amazon and Whole Foods, the 1% rate on other spending is lower than many competing cards. If you rarely shop at either place, the card's main advantage disappears.

Key Takeaways

  • The Amazon card pays 5% cash back at Amazon and Whole Foods, 2% at gas and restaurants, and 1% everywhere else, with no annual fee for Prime members.
  • Cash back appears as a statement credit on your bill, not as a separate payment, so it does not reduce interest charges if you carry a balance.
  • The card is most valuable if you spend heavily at Amazon or Whole Foods; otherwise, other cards may offer better rates on everyday purchases.
  • You need an active Prime membership to avoid the $39 annual fee, which means the card's value depends on whether you already pay for Prime.
  • The 5% rate at Amazon applies only to purchases made through Amazon.com and the mobile app, not to third-party sellers or Amazon Fresh grocery orders.

When the 5% Rate Actually Applies

The 5% cash back at Amazon covers purchases made directly through Amazon.com and the Amazon mobile app. Third-party sellers on Amazon's marketplace are included. However, Amazon Fresh grocery delivery and Amazon Go convenience stores do not earn the 5% rate — they earn 1%, the same as other retailers.

Whole Foods purchases earn 5% anywhere in the store, including prepared foods and items at the register. The rate applies whether you shop in person or order online for pickup or delivery. Prime members also receive additional discounts at Whole Foods on certain items, which stack on top of the cash back.

Outside these two places, the 2% rate applies only at gas stations and restaurants (including bars and fast-casual chains). Grocery stores other than Whole Foods earn 1%. Online retailers, utilities, insurance, and most services earn 1%.

How This Card Compares to Other Options

The most direct competitor is the Chase Sapphire Preferred, which earns 3% on dining and travel, 2% on groceries and gas, and 1% elsewhere. It has a $95 annual fee. If you spend $200 a month on groceries and $150 on gas, the Sapphire Preferred earns you $84 a year in extra cash back compared to the Amazon card — but you pay $95 in fees, so you come out behind.

The Citi Double Cash card earns 2% on all purchases with no annual fee. If you spend $500 a month outside Amazon and Whole Foods, the Double Cash earns $120 a year while the Amazon card earns $60. The Double Cash wins unless you are spending heavily at Amazon.

The Discover It card earns 5% cash back on rotating categories (gas, groceries, restaurants, Amazon) but only up to $1,500 per quarter, then 1% after that. If you hit the $1,500 limit at Amazon every quarter, Discover matches the Amazon card's rate. Most people do not spend that much in a single category.

The Prime Membership Requirement

The card's $0 annual fee only applies if you have an active Prime membership. Prime costs $139 per year or $14.99 per month. If you do not already subscribe, the card's annual fee becomes $39, which reduces the value of the cash back unless you are spending several thousand dollars a year at Amazon.

If you have Prime for the shipping benefits and video streaming, the card's no-fee status is a bonus. If you would need to buy Prime just to avoid the card's annual fee, the math changes. You would need to earn at least $139 in extra cash back per year compared to your next-best card option just to break even on the Prime cost.

Prime membership also includes other benefits — free two-day shipping, Prime Video, Prime Music, and Prime Reading — so the $139 cost is not purely about the credit card. But if you are evaluating the card in isolation, the Prime requirement matters.

Interest Charges Erase Cash Back Quickly

The cash back reward is only valuable if you pay your balance in full each month. The Amazon card's interest rate varies by creditworthiness but typically ranges from 18% to 24% APR. If you carry a $1,000 balance for one month, you pay roughly $15 to $20 in interest. The 5% cash back on a $1,000 Amazon purchase is $50, but that assumes you are not carrying a balance on that purchase.

If you use the card to make a large purchase and pay it off over several months, the interest charges quickly exceed the cash back. A $2,000 purchase earning $100 in cash back costs you $300 to $400 in interest if you pay it off over six months. The card becomes a net loss.

The card only makes financial sense if you treat it like a debit card — spending money you already have and paying the full balance when the bill arrives. If you carry balances regularly, a card with a lower interest rate is more important than one with high cash back rates.

How to Decide If This Card Fits Your Spending

Start by tracking where you actually spend money over the last three months. Add up your Amazon purchases, Whole Foods purchases, gas station purchases, and restaurant purchases. Multiply each category by the cash back rate: Amazon and Whole Foods by 5%, gas and restaurants by 2%, everything else by 1%.

Compare that total to what you would earn with your current card or a competing card. If the Amazon card earns you $100 more per year, it is worth using. If it earns you $20 more, the difference is small enough that other factors — like whether you prefer a different card's benefits or interface — should decide it.

Also consider whether you will actually use the card. If you have multiple credit cards and tend to forget which one earns what, using a card you do not actively think about means missing out on the rewards. A card you forget to use earns you nothing.

Frequently Asked Questions

Do I have to be a Prime member to get the card?

No, but the annual fee is $39 without Prime. If you have Prime for other reasons, the card is free. If you do not have Prime, you would need to spend enough at Amazon to earn at least $39 in extra cash back compared to another card to break even on the fee.

Can I use this card at other retailers that sell Amazon products?

No. The 5% rate applies only to purchases made directly through Amazon.com and the Amazon app. Retailers like Target or Best Buy that sell Amazon-branded products do not earn the higher rate — they earn 1%.

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

Any cash back you have already earned stays on your account as a statement credit and can be used to pay your bill. Cash back does not expire as long as your account is open, but once you close the card, you stop earning new rewards.

Does the cash back count toward my minimum payment?

Yes. The cash back appears as a credit on your statement, which reduces the amount you owe. If you owe $500 and earn $50 in cash back, your new balance is $450.

Can I transfer my cash back to my Prime account or use it for something other than paying my bill?

No. The cash back can only be used as a statement credit toward your credit card balance. You cannot transfer it to a bank account, use it to buy gift cards, or explore it to your Prime membership.