The Amazon credit card works best if you shop on Amazon regularly and pay your full balance every month

The Amazon credit card comes in two versions: the Amazon Prime Rewards Visa Signature Card (for Prime members) and the Amazon Rewards Visa Card (for non-members). Both offer cash back on Amazon purchases — 5% for Prime members on Amazon.com and Whole Foods, 3% at restaurants and gas stations, and 1% everywhere else. The non-member version gives 3% on Amazon and 1% elsewhere.

Whether it is worth opening depends on three things: how much you spend on Amazon each year, whether you carry a balance month to month, and what other rewards cards you already own. If you spend under $500 a year on Amazon, the rewards will not offset the annual fee ($139 for Prime members, though the card itself has no separate fee). If you carry a balance and pay interest, the interest charges will wipe out any cash back you earn. If you already have a card that gives 2% back on all purchases, the Amazon card only wins on Amazon itself.

Key Takeaways

  • The Amazon Prime card charges a $139 annual fee and requires an active Prime membership, so you need to spend enough on Amazon to make the rewards worth that cost.
  • You earn 5% cash back on Amazon and Whole Foods purchases only if you pay your full balance each month — interest charges will cost far more than any rewards.
  • The card's main advantage is the 5% rate on Amazon; if you shop elsewhere more than on Amazon, a flat-rate card may save you more money.
  • Opening a new card will lower your credit score slightly for a few months because of the hard inquiry and the new account, but the impact is usually small and temporary.

How the rewards actually work

Cash back posts to your account as a statement credit, not as a separate payment. You can use it to pay your bill or let it sit as a credit balance. The 5% rate applies only to purchases on Amazon.com and Whole Foods Market stores — not Amazon Fresh, Amazon Business, or third-party sellers on Amazon's marketplace, though some third-party sales do may have access to. The exact rules change, so check your statement to see which purchases earned the higher rate.

The 3% category (restaurants and gas) and 1% category (everything else) explore to all other spending. Many people assume they will earn 5% everywhere because they shop on Amazon, but the card only gives that rate on Amazon itself. If you spend $2,000 a year on Amazon and $8,000 everywhere else, you earn $100 in cash back on Amazon but only $80 on the rest — so the card's real advantage is narrow.

The annual fee and whether it pays for itself

The Prime version costs $139 per year. To break even, you need to earn at least $139 in cash back annually. At the 5% rate, that means spending $2,780 on Amazon per year, or about $232 per month. If you spend less than that, the fee costs you money. If you spend $3,000 on Amazon and $5,000 elsewhere, you earn $150 on Amazon and $50 elsewhere, for $200 total — which covers the fee with $61 left over.

The non-member version has no annual fee, but it gives only 3% on Amazon instead of 5%. That makes it worth considering only if you do not have a Prime membership and do not plan to get one. If you already pay for Prime, the card's fee is easier to justify because you are already committed to the membership.

Interest charges will erase your rewards

This is the single biggest mistake people make with rewards cards. If you carry a balance, the interest rate on the Amazon card is typically 18% to 24% per year, depending on your credit score. That means if you spend $1,000 and pay only the minimum, you will pay roughly $15 to $20 per month in interest — far more than the $50 in cash back you earned on that purchase.

The card only makes financial sense if you pay the full balance every month. If you tend to carry a balance on other cards, or if you are not sure you can pay this one off, do not open it. A card with no annual fee and a lower interest rate would serve you better, even if the rewards are smaller.

How opening a new card affects your credit score

explore for the card triggers a hard inquiry, which lowers your score by a few points for about three months. Opening a new account also lowers your average account age, which can drop your score by 5 to 15 points depending on how many other accounts you have. If you have a thin credit file (few accounts or a short history), the impact is larger.

The damage is temporary. After six months, the hard inquiry stops affecting your score. After two years, it disappears from your report entirely. The new account itself stays on your report for ten years, but its negative impact fades after the first year. If you are planning to borrow for a mortgage or car loan in the next few months, opening a new card now could cost you a slightly higher interest rate on that loan — so timing matters.

Comparing the Amazon card to other rewards options

A flat-rate card that gives 2% cash back on all purchases will beat the Amazon card if you spend less than half your money on Amazon. For example, if you spend $3,000 on Amazon and $7,000 elsewhere, the Amazon card earns $150 plus $70 (1% on the rest) for $220 total. A 2% card earns $200 on the same spending — less by $20, but with no annual fee. Over five years, that is $100 in your pocket.

If you shop on Amazon heavily and also use Whole Foods, the 5% rate is harder to beat. But if you split your spending across Amazon, Target, Costco, and other retailers, a card with a simpler rewards structure may cost you less. The math depends on your actual spending, not on the card's marketing.

What happens if you close the card later

If you open the card, earn rewards for a year, and then close it, the account stays on your credit report for ten years. Closing it will lower your credit score slightly because it reduces your total available credit and raises your credit utilization ratio on other cards. The impact is usually small — 5 to 10 points — but it is real.

If you think you might close the card, keep it open even if you are not using it actively, as long as there is no annual fee for keeping it dormant. The Prime version does charge the annual fee whether you use it or not, so if you stop shopping on Amazon, closing it makes sense. Weigh the small score drop against the $139 annual cost to decide what works for your situation.

Frequently Asked Questions

Do I have to have a Prime membership to get the Amazon card?

No. Amazon offers a non-member version that gives 3% cash back on Amazon purchases and 1% elsewhere. But if you already have Prime, the Prime version's 5% rate on Amazon and Whole Foods is usually worth the $139 annual fee if you spend enough on those platforms.

Can I use the card on Amazon Business or third-party sellers?

Amazon Business purchases do not earn the higher cash back rate — they earn 1%. Most third-party seller purchases on Amazon.com do earn 5%, but some do not. Check your statement to see which purchases may have access to. If you use Amazon Business heavily, the card's advantage shrinks.

What if I cannot pay the full balance right away?

Do not open the card. The interest rate will cost more than the cash back is worth. A card with a 0% introductory period on purchases might be a better choice if you need to carry a balance temporarily, but the Amazon card is designed for people who pay in full each month.

Will this card hurt my credit if I open it?

It will lower your score by 5 to 15 points for a few months due to the hard inquiry and new account. The damage is temporary and usually recovers within six months. If you are borrowing for a mortgage or car loan soon, wait until after that loan closes before opening a new card.

Is the cash back worth more than the annual fee?

Only if you spend at least $2,780 per year on Amazon and Whole Foods combined. If you spend less, the fee costs you money. Use a calculator with your actual spending to see whether the card breaks even for you.