Amazon Credit Card Review – Rewards or Ripoff?
For 2013 should you get the Amazon credit card? As a cardmember of almost 8 years, here’s my personal review of their credit card so you can know the pros and cons.
How many times during checkout have they tried to peddle you their rewards card?
Their signup promotion for a $30 discount is hardly exciting, nor is the rewards program. Why? Because ironically, there is a different credit card that can earn you a higher rebate on Amazon.com purchases (more on this in a minute).
The raw numbers behind the rewards…
Since 100 points = $1 credit towards future purchases, that means the Chase Amazon rewards card is essentially giving 1% normally, 2% on those 3 categories, and 3% on Amazon.com.
- Standard purchases are given 1 point per dollar
- Purchases at gas stations/drugstores/restaurants are at 2 points per dollar
- Lastly, Amazon.com spending earns 3 points per dollar
Not bad, but when you can get 2% on everything with this card from Barclays it suddenly makes it look a lot less exciting.As far as the 3% at Amazon is concerned, funny thing is there's a different card that let's you earn up to 66% more rewards on Amazon than what their own card gives.
Here's how I get 5% cash back on my Amazon purchases...
As mentioned I've had their account for almost 8 years, but I never use it anymore.
Why not? Because a couple years ago I opened up a Chase Ink Cash Business Card. It has no annual fee and gives 5% cash back on up to $25,000 in annual spending on eligible categories. One of those categories happens to be office supply stores.
Well guess what? Places like Staples sell gift cards to other places, including Amazon.com.
So you can go to Staples and buy Amazon gift cards at face value (i.e. you pay $100 for a $100 gift card). Since you're buying these gift cards at an office supply store, you're earning 5% cash back!
And just to clarify, some of these gift cards have the Kindle logo on them (like the ones sold at my local Staples during summer 2013, pictured right). But despite the design, these are normal Amazon gift cards that you can use to buy anything on their website with. That includes everything sold by 3rd party merchants on there, too.
Oh and the fun doesn't stop there. Remember that you can buy gift cards at Staples and Office Depot for tons of other places too...
The store branded cards are almost always sold at face value. Typically the only time you will pay a premium is on the the Visa and AmEx gift cards.
This is the best kept secret of credit card rewards because now you can get 5% on all types of things, even gas (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.
In comparison, the Amazon card's rewards look pretty pitiful, right? Especially considering you only get a crappy $30 signup bonus. Right now on the Ink cards you can get a much bigger bonus.
Now the Chase Ink are business cards, but the great news is you can get one even if you don't have a separate corporation or LLC. If you are a sole proprietor (individuals in business) you can apply using their SSN and their legal business name will be the same as your legal name (i.e. "John Doe" if that's your name).
Right now the one I have has a killer signup offer with it...
Or if you can spend $5k in your first 3 months (that's an average of $1,667 per month) then you should go with the version below because at the moment, it has a bonus worth $500!!! (you can redeem the 50,000 bonus points for a $500 statement credit). I also applied for this one - yep, you're allowed to have both versions!
Note: There is also an Amazon store card issued through GE Capital Retail Bank, but it offers no rewards (it basically just offers deferred interest financing on some larger purchases).
Going back to the review of the Amazon card...
The rates and fees
Obviously reward cards are a bad idea for carrying a balance since their rates tend to be higher than non-reward cards. However in the event you can’t pay your bill in full, as I write this review the rates were as follows:
Are these good or bad? They’re pretty middle-of-the-road considering the card type. But obviously the finance charges from these types of rates would quickly trump the rebate you would be earning.
- 18.24% or 21.24% for those given the platinum card
- 13.24% for those given a Visa Signature
On the other hand, the store credit card from Amazon has excessive interest rates to say the least! When I pulled up the application this is what was listed:
Paying that AND there are no points earned?! If you’re going to apply for an Amazon credit card I see little reason to go with this one. My guess is it’s probably 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.
I suppose the only silver lining for this category is that neither of their cards charge an annual fee.
The benefits (or lack thereof)
As far as the GE store credit card is concerned, there are really no noteworthy benefits worth mentioning.
When it comes to the Chase Amazon credit card, the platinum tier will basically just come with your very basic Visa benefits such as auto rental collision damage waiver, which is secondary coverage on eligible rental vehicles. Aside from that, there’s not much worth mentioning.
For the Signature tier, there are extra bells and whistles thrown in such as lost luggage reimbursement, purchase security (up to $500 coverage on new purchases for theft and a few types of damage), common carrier travel accident insurance, phone concierge, etc. You will get these benefits on all other Signature tier credit cards, too.
Verdict? The Amazon card’s benefits are nothing impressive.
What should you do for 2013?
Should you get an Amazon credit card or not? Is it a good choice? Easy to get?
As far approval is concerned, getting approved for the store card will be probably be somewhat easy even if you have mediocre credit. With their normal credit card, the requirements will be higher. I would estimate the minimum FICO score to be approved would be in the high 600’s for the platinum. To get the Signature, probably a minimum of low to mid 700’s. But that holds true for most other reward cards, so if you only have average credit I see no reason to settle on Amazon if it's not the one you really want.
Ultimately after reading my review of the Amazon card, you may be wondering why do I still have the card myself? Well simply put, because I opened it 7 years ago (2005) the reason I keep it open is because it looks good on my credit report since it’s an older account. I would not recommend anyone apply for it now.
My recommendation? Go with the Chase Ink Cash or Ink Plus business cards if you are an individual in business.
For personal cards, here are some other cash back programs to consider, but nothing beats the Ink business card's 5x points strategy of buying Amazon cards at Staples!