Amazon credit card review

Our rating

3 stars 3/5

See explanation of our ratings system

See breakdown of this card’s rating

Should you consider applying for the Chase Amazon Visa credit card? Before you send off your application you should carefully consider the pros and cons.

After buying things on Amazon.com you have probably been presented with multiple online popup offers to sign up for their rewards card.

The sign-up promotion for the Amazon Visa entailing a $50 gift card instantly up on approval may not seem exciting, but it also has no spending requirements.

Their rewards program, on the other hand, may be more compelling to frequent Amazon shoppers — just know that there is a different credit card that can earn you a higher rebate on Amazon.com purchases (more on this in a minute).

The numbers behind the rewards…

amazon-credit-card

  • 3% back at Amazon.com
  • 2% back at gasoline stations, restaurants and drugstores
  • 1% back on all other purchases

Your % back rewards are earned as points and each point is worth 1 penny, so 100 points equals $1 that can be redeemed for Amazon purchases, cash back, gift cards or travel.

It’s always nice to see a co-branded card offer bonus points outside its realm — and the Amazon card does just that, offering 2 percent back at restaurants, gas stations and drugstores. As far as the 3% at Amazon is concerned, there are cards out there that allow you to earn that much or more for Amazon purchases.

Here’s an alternate way to earn cash back on Amazon purchases…

Simply apply for a cash back credit card that offers extra cash back for grocery store, office supply or home improvement store purchases.

Then, guess what? Places like Home Depot, and most national grocery chains sell gift cards to other places, including Amazon.com.

So you can buy Amazon gift cards at face value (i.e. you pay $100 for a $100 gift card).

Remember that you can buy gift cards at these types of stores for tons of other places too…

retail-cards

This is the best-kept secret of credit card rewards because it potentially allows you to get higher percentage cash back on all types of things, even gasoline (notice the Shell cards, pictured above). My favorite are the Starbucks and the “home improvement” card you can use at Home Depot and similar places.

retail-cards2
If you don’t want to do the gift-card work-around, though, you might prefer getting an effortless 3 percent back on Amazon purchases.

Going back to the review of the Amazon card…

The rates and fees
As you’re probably already aware, reward cards are not ideal for carrying a balance since their interest rates tend to be higher than non-reward cards. However, in the event you can’t pay your balance in full, the current rates for this card are as follows:

  • 14.49% or 22.49% variable, based on your creditworthiness

Is this good or bad? It’s pretty middle-of-the-road considering the card type. But obviously the finance charges from these types of rates would quickly offset any potential rewards you might be earning if you carry a balance on a regular basis.

There is also a store credit card from Amazon (issued by Synchrony), which has excessive interest rates and doesn’t even have a reward program – it’s simply a deferred interest plan card. But when the interest hits, watch out! The go-to rate 26.24 percent.

Paying punitive interest PLUS no rewards points earned?! If you’re going to apply for an Amazon credit card there is no reason to go with the Synchrony product. It’s better suited for people with lower credit scores who can’t get approved for their regular card. If you were thinking about it to finance a purchase, think twice because it uses DEFERRED interest. You would be better off with a regular credit card deal that gave 0% on purchases and balance transfers instead.

The only silver lining for this category is that neither of their cards charge an annual fee.

The benefits

As far as the Synchrony store credit card is concerned, there are really no noteworthy benefits worth mentioning.

When it comes to the Chase Amazon Rewards card, it simply offers very basic Visa benefits such as extended warranty and auto rental collision damage waiver, which is secondary coverage on eligible rental vehicles. Aside from that, there’s not much worth mentioning.

Verdict? The Amazon card’s benefits are nothing impressive but on par with similar no-annual-fee cards.

What should you do for 2016?

Should you get an Amazon credit card or not? What about the instant savings? Is it easy to qualify for?

As far as approval is concerned, qualifying for the private label store card will be probably be fairly assured, even if you have mediocre credit. With the Amazon Rewards Visa, the underwriting approval standards will be more stringent.

Our recommendation? Here are several cash back programs to consider, offering either a permanent upper tier of cash back on groceries or quarterly rewards as high as 5% on groceries and home improvement stores. The Discover even offers a straight 5% reward on Amazon.com purchases up to $1,500 in Q4 2016.

How much you’ll get out of the Amazon card’s 3 percent rewards on Amazon purchases depends on how frequently you shop on Amazon. If your doorstep is constantly covered with Amazon boxes, or if you order office and baby supplies in bulk from the site, you’ll probably get a lot out of that 3 percent back. If, however, you’re just ordering the occasional holiday gift off Amazon, consider a card that offers a more consistent rate of cash back on other purchases.

Why we gave it 3 out of 5 stars

We rated the Amazon card from Chase based on our standards for store-specific cards. The card lost a couple stars for not having the financing and perks other retailer cards offer, but made up for it with better rewards and interest rates than you’d usually find on a branded store card.

Empty starIntro financing: This card doesn’t offer introductory financing.
Full starOngoing rewards/discounts: This card offer rewards for the life of the card, including in some bonus categories outside Amazon.
Full starFair interest terms: This card has a range of APRs, the bulk of which is below average for store credit cards.
Empty starConsumer-friendly incentives: This card doesn’t offer any perks for loyal Amazon users, like free shipping.
Full starCan be used anywhere: This is a Visa card and can therefore be used outside Amazon.com.