The Amazon credit card makes sense if you shop on Amazon regularly and can pay your full balance each month, but it costs money if you carry a balance or rarely use it

The Amazon credit card comes in two versions: the Amazon Prime Rewards Visa Signature Card and the Amazon Rewards Visa Card (no Prime required). Both give you cash back on Amazon purchases — 5% if you have Prime, 3% without — and smaller rewards on other purchases. The catch is that the cash back only matters if you're not paying interest. If you carry a balance month to month, the interest charges will erase any rewards you earn, sometimes within a few months.

The Prime version has no annual fee. The non-Prime version also has no annual fee. So the only real cost is interest if you don't pay in full, which is the same cost you'd face with any credit card. The question isn't whether the card itself is good — it's whether the rewards match how you actually spend money.

Key Takeaways

  • The Amazon Prime Rewards card gives 5% cash back on Amazon purchases, but only if you have an active Prime membership and pay your balance in full each month.
  • Interest charges on a carried balance will wipe out months of rewards, so this card only saves money if you pay what you owe before the due date.
  • You earn rewards on non-Amazon purchases too (1% to 2%), but those rates are lower than what other cards offer, so compare before switching.
  • The card has no annual fee, so there's no cost to open it if you don't use it, but rewards only appear if you actually charge purchases to it.

How the cash back actually works

When you use the Amazon Prime Rewards card on Amazon.com or Amazon Fresh, you earn 5% cash back on each purchase. That cash back appears as a credit to your account — you don't get it as a separate payment. You can use it to pay your bill, or you can let it sit in your account and spend it on future Amazon purchases.

On purchases outside Amazon, you earn 1% cash back on everything else. Some cards offer 2% cash back on all purchases, so if you use the Amazon card for non-Amazon spending, you're giving up rewards compared to a flat-rate card. The Amazon card only wins if most of your spending happens on Amazon itself.

Cash back posts to your account within a few days of the transaction clearing. There's no cap on how much you can earn, and there's no expiration date on the rewards — they stay in your account until you use them.

When interest charges erase your rewards

If you carry a balance from month to month, the interest rate on the Amazon card is typically 16% to 24% annually, depending on your credit score and current market rates. That means if you owe $1,000 and don't pay it off, you'll owe roughly $13 to $20 in interest the first month alone.

The 5% cash back on Amazon purchases sounds good until you do the math. If you spend $500 on Amazon and carry that balance for three months, you earn $25 in cash back but pay roughly $40 to $60 in interest. You're behind. After six months, the interest has likely cost you more than the rewards earned.

This is true for any rewards card: the rewards only matter if you're not paying interest. If you know you'll carry a balance, a card with a lower interest rate (or a 0% introductory period) is more useful than one with high cash back.

Comparing the Amazon card to other options

If you shop on Amazon constantly and pay in full each month, the 5% cash back is hard to beat — most other cards max out at 2% to 3% on specific categories. But if your Amazon spending is occasional, or if you spend more at other retailers, a different card might save you more money.

A flat-rate 2% cash back card (like the Citi Double Cash or Capital One Quicksilver) earns rewards everywhere, not just Amazon. If you spend $2,000 a month across all retailers and only $400 of that is on Amazon, the flat-rate card earns $40 in cash back, while the Amazon card earns $20 on Amazon plus $16 elsewhere — $36 total. The flat-rate card wins.

If you have a lower credit score or expect to carry a balance sometimes, look at cards with 0% introductory APR periods instead. Those cards let you make purchases interest-free for 6 to 21 months, which is worth far more than any cash back if you're not paying your balance in full.

The Prime membership connection

The Amazon Prime Rewards card requires an active Prime membership to earn the 5% rate. If you cancel Prime, your cash back rate drops to 1% on Amazon purchases. If you're on the fence about Prime anyway, the card can tip the math in Prime's favor — but only if you're already spending enough on Amazon to make the membership pay for itself.

Prime costs $139 per year (or $14.99 per month). To break even on the membership alone, you'd need to spend roughly $2,800 per year on Amazon to earn back $140 in 5% cash back. That's about $233 per month. If you spend less than that, the card's rewards won't cover the membership cost.

If you already have Prime for the shipping and video benefits, the card is just a bonus — you're not paying extra for the rewards. But if you're considering Prime only for the card, do the math first.

What happens if you don't use the card

Opening the Amazon card costs nothing, and there's no annual fee, so there's no penalty for opening it and not using it. Your credit score will take a small, temporary dip when you explore (usually 5 to 10 points), but it recovers within a few months if you don't miss payments.

The card issuer (Chase) may close the account if you don't use it for a long time — typically 12 months or more of no activity. If that happens, it won't hurt your credit score, but you'll lose the option to use the card. If you want to keep it open as a backup, charge something small to it every few months.

How to decide if this card is right for you

Ask yourself three questions: Do I spend at least $200 per month on Amazon? Will I pay the full balance every month? Do I have Prime or plan to get it anyway?

If you answered yes to all three, the Amazon card will save you money. If you answered no to any of them, a different card (or no new card at all) is probably the better choice. If you're not sure whether you'll pay in full, don't open it — the interest charges will cost more than you'll ever earn back.

Before you explore, check your credit score. Cards with better rewards typically require a score of 670 or higher. If your score is lower, you might not be approved, or you might get approved with a higher interest rate that makes the rewards worthless.

Frequently Asked Questions

Does the Amazon card hurt my credit score?

Opening the card causes a small, temporary dip (usually 5 to 10 points) because the issuer checks your credit. Your score recovers within a few months. Using the card responsibly — paying in full each month — actually helps your score over time because it shows you manage credit well.

Can I use the cash back rewards to pay my bill?

Yes. Your cash back appears as a credit in your account, and you can explore it to your statement balance. You can also let it sit and use it on future Amazon purchases. There's no expiration date on the rewards.

What if I miss a payment?

You'll be charged a late fee (typically $25 to $40 for the first late payment) and interest will start accruing on your balance. Your credit score will drop. If you miss a payment, contact Chase as soon as possible — they may waive the fee if it's your first miss and you pay quickly.

Do I need to have Prime to open the card?

No. You can open the regular Amazon Rewards card without Prime and earn 3% cash back on Amazon purchases. You'll earn less than the Prime version, but there's no membership requirement.

What's the difference between the Prime and non-Prime versions?

The Prime version earns 5% on Amazon purchases; the non-Prime version earns 3%. Both have no annual fee. Choose the Prime version only if you have an active Prime membership.