The Amazon card makes sense only if you spend enough on Amazon to offset the annual fee

The Amazon Prime Rewards Visa Signature Card charges a $139 annual fee and gives you 5% cash back on Amazon purchases and Whole Foods spending if you are a Prime member. Without Prime, you get 3% back on those same purchases. The card also gives 2% back at gas stations, restaurants, and travel, and 1% on everything else.

Whether this card is worth it depends on one number: how much you actually spend on Amazon each year. If you spend $2,800 or more annually on Amazon, the 5% cash back roughly covers the $139 fee. Spend less than that, and you are paying to use the card. Spend more, and the card saves you money.

The catch is that you need to be a Prime member for the 5% rate. If you are not, the card becomes much weaker — you only get 3% back on Amazon, which means you would need to spend about $4,600 a year just to break even on the fee.

Key Takeaways

  • The Amazon Prime Rewards card costs $139 per year and only makes financial sense if you spend at least $2,800 annually on Amazon to earn back that fee in cash rewards.
  • You must have an active Prime membership to get the 5% cash back rate; without it, the card's rewards are too weak to justify the annual cost.
  • The 2% rewards at gas stations and restaurants are standard for travel cards, so the card's main value comes from Amazon spending alone.
  • If you spend less than $2,800 per year on Amazon, a no-fee card with flat cash back (like 2% back on all purchases) will save you more money.

How the rewards math actually works

The $139 annual fee is the starting hole you need to dig out of. At 5% cash back on Amazon purchases, you earn $1.39 back for every $100 you spend. That means $10,000 in Amazon spending gets you $500 in rewards, minus the $139 fee, for a net gain of $361.

But most people do not spend $10,000 a year on Amazon. The median Amazon customer spends far less. If you spend $2,000 annually, you earn $100 in cash back — not enough to cover the fee. If you spend $3,000, you earn $150, which covers the fee with $11 left over.

The 2% rewards at gas stations and restaurants help a little, but not much. If you spend $200 a month on gas and restaurants combined, that is $2,400 a year, earning you $48 in cash back. That moves the needle slightly, but your Amazon spending is still the main factor.

When the card loses money for you

The Amazon card costs you money if you would otherwise use a no-fee card. A basic cash back card with no annual fee — such as the Chase Freedom Unlimited or the Citi Double Cash — gives you 1.5% to 2% back on all purchases, with no fee to pay.

If you spend $5,000 a year total across all categories, a 2% no-fee card earns you $100. The Amazon card, if you spend $3,000 on Amazon and $2,000 elsewhere, earns you $150 on Amazon plus $40 on other purchases, for $190 total — but you pay $139 in fees, leaving you with $51. You come out $49 ahead. But if you only spend $2,000 on Amazon and $3,000 elsewhere, the Amazon card earns you $100 on Amazon plus $60 elsewhere, for $160 total, minus $139 in fees, leaving you with $21. The no-fee card would have earned you $100 with no fee, so you lose $79 by switching.

The break-even point assumes you are already a Prime member. If you are not, the math gets worse because you only earn 3% on Amazon instead of 5%, and Prime membership itself costs $139 per year (or $14.99 per month). Paying for both the card and Prime just to get 3% back on Amazon does not make sense.

The hidden cost: annual fee creep

Amazon raised the annual fee from $99 to $139 in 2023. That is a 40% increase. If you were barely breaking even before, you now need to spend about $900 more per year on Amazon just to stay in the same place financially.

Credit card companies raise annual fees periodically, and there is no may provide this will be the last increase. If you are using this card because the math barely works, a future fee increase could flip it from profitable to a loss.

Better alternatives if you do not spend much on Amazon

If you spend less than $2,800 a year on Amazon, you will save money with a different card. The Chase Freedom Unlimited has no annual fee and gives 1.5% cash back on all purchases. The Citi Double Cash gives 2% back on all purchases with no fee. Both beat the Amazon card if your Amazon spending is low.

If you do spend heavily on Amazon but also travel, the Chase Sapphire Preferred might be worth considering instead. It has a $95 annual fee and gives 3x points on travel and dining, plus 1x on other purchases. Points are worth more than cash back if you redeem them for travel, but the card does not have a specific Amazon bonus.

If you are a Prime member and spend a lot on Amazon, the Amazon card can still make sense — but only if you do the math for your own spending first. Do not assume the rewards are worth it just because the card is branded with Amazon.

What happens to your credit when you open the card

Opening a new credit card triggers a hard inquiry on your credit report, which can lower your score by a few points temporarily. It also reduces your average age of accounts, which can lower your score slightly. These effects usually fade within a few months.

The card does help your credit utilization ratio if you use it responsibly — meaning you pay the full balance each month. If you carry a balance and pay interest, you lose all the rewards value and then some. The interest you pay will always exceed the cash back you earn.

The Prime membership question

If you do not have Prime, the Amazon card becomes a bad deal. You would pay $139 for the card plus $139 for Prime (or $14.99 per month), totaling $278 to $318 per year just to get 3% back on Amazon. You would need to spend nearly $10,000 a year on Amazon to break even, which is far more than most households spend.

If you already have Prime for the shipping and video benefits, the card math improves because you are not paying extra for Prime just to use the card. But if you are considering Prime only to make the card worthwhile, stop. The combination does not pencil out unless you are a very heavy Amazon shopper.

Frequently Asked Questions

Can I get the 5% cash back without Prime?

No. Without an active Prime membership, the card gives you 3% back on Amazon and Whole Foods purchases instead of 5%. The card still costs $139 per year, so the rewards are too low to justify the fee unless you spend an enormous amount on Amazon.

Does the cash back expire?

No. Cash back rewards do not expire as long as your account remains open. However, if you close the card, you may lose any pending rewards depending on the card's terms, so check before you cancel.

What if I only use the card for Amazon and nothing else?

That is fine from a rewards perspective — you still earn 5% back on Amazon purchases. But you are ignoring the 2% rewards at gas stations and restaurants, which means you are not maximizing the card's value. If you only spend $2,000 a year on Amazon, you earn $100 in rewards and lose $39 to the annual fee.

Is the sign-up bonus worth it?

Amazon occasionally offers a sign-up bonus (usually $100 to $200 in statement credits) for opening the card. This bonus can help offset the first year's annual fee, making the card more attractive in year one. However, you still need to do the math for year two and beyond, when the bonus is gone and you are paying the full $139 fee.

What if my spending changes and I no longer break even?

You can cancel the card at any time. There is no penalty for closing it. If your Amazon spending drops below $2,800 per year, switching to a no-fee card will save you money going forward. Just make sure to cancel before the annual fee posts if you decide to leave.