Is the Amazon Visa card the best choice for rewards? This review will show you the good, the bad, and the ugly for 2014. Read before you apply.
Offer Overview For December 2013:
The Good? 3x points (equal to 3% rebate) for Amazon.com purchases.
The Bad? Only 1x point (equal to 1%) for non-category spending.
The Ugly? For what seems like eternity, the signup bonus has only been a measly $30.
Can You Do Better? Probably. Unless you're using it exclusively for their website purchases, you may be missing out since the average you earn (across all your spending) will be closer to 1%. Furthermore, if you're going to apply for a new card you should expect more than a $30 bonus.
For example, here's one that earns 2% on everything and a bonus that's worth $400:And here's a no-frills cash back card that earns a straight 1.5% on all purchases and comes with a bonus:Depending on your spending patterns, either of these will probably net you a higher rebate overall, especially the one from Barclays since it earns the equivalent of 2.2% on everything (2 miles/dollar base, plus 10% of your miles to re-use again after redemption = 2.2% total).
That being said, I am not belittling the Chase Amazon Visa. Since each point equals a penny, it's a very transparent rewards program. They don’t screw around with the point value and there’s no minimum for redemption (an improvement over the $25 minimum previously imposed by Chase). Now the points can be cashed out – in any increment – during checkout for a discount/rebate when shopping on their site.
It’s all gravy, right? Not so fast…
You need to be aware of the fact that while it's true this card has a straightforward redemption for rewards, you’re not going to be earning the most bang for your buck.
Part One: Amazon Purchases
For Amazon.com they give 3 points per dollar spent. You don’t have to be a math wiz to figure out that’s a 3% rebate, which is pretty good.
However, the crazy thing is that it’s not the best Visa card for Amazon purchases!
There is a a little-known strategy you can employ to earn 5x points (or 5%) when you shop on their website thanks to a different Visa card that exists. How is that even possible? By getting a 5% rebate when you buy Amazon gift cards. Here's how you can use this trick to earn 5%.
Part Two: Gas, Restaurants, and Drugstores
There’s no doubt that earning 2 points per dollar on these categories is a nice touch. But how does the Amazon Visa rewards card measure up against what else is out there? Let's review...
Part Three: Everything else
- Gas – There are gas cards that give up to 3% cash back year round. Some even give 5% for part of the year. Conclusion? The Amazon card isn't the best, but it’s still better than plain ol’ 1%.
- Restaurants – Not many cards give extra rewards on dining. The Sapphire gives 2x points at restaurants. But these points have the ability to be worth more than 2%, because with the Preferred version you can for travel that's worth more.
- Drugstores – Years ago this was a popular category on credit cards but not so much these days. I think it’s because people realize only a tiny percentage of their spending was at drugstores. But if you spend a lot at them, then the 2x points with the Visa Amazon is about as good as you can do (I’m excluding cards that give 5% on rotating categories, since those don’t include drugstores year ‘round).
The 1 point per dollar on everything else is fair. After all, earning 1% is pretty typical these days.
But if you want to do better, you certainly can. This card earns travel rewards worth 2% on all purchases, making it the best choice for your non-Amazon and non-category purchases.
Part Four: The Signup Bonus
What about the statement credit for new accounts? I applied for the Amazon Visa card nearly 8 years ago (in 2005) and guess what I got? A measly $30 statement credit.
Guess what they’re still offering in 2013? A $30 statement credit!
This thirty dollar promo for new accounts has been around for as long as I can remember. Since they've been doing it for so many years, there's certainly no rush to apply for it. And if you're waiting for a better off from them, that's unlikely to given that it's been stuck at $30 for 8 years running.
On the other hand, these signup promotions worth up to $400 and higher won’t stick around forever.
Part Five: The interest rates
As you are well aware, interest rates are always subject to change, but while I was writing this I took a look on their site to see what they were (all are Variable APRs).
What have I liked and disliked about the Amazon Chase Visa?
- Purchases: 19.24% or 22.24% (which one you get depends on your credit) for the Platinum and 14.24% for the Signature. The latter isn't horrendous, but the first two are.
- Balance Transfers: same as above
- Cash Advances: If the account has the 22.24% APR, then the cash advance rate is 23.24%. For others, the rate is 19.24%.
- Default APR: up to 29.99%
Since I’ve had it for several years, I’m definitely the appropriate person to be writing an Amazon Visa card review. When I first got it, I loved the 3 points. But now that better offers have came along, eventually I just stopped using the card regularly.
Should you get the card?
Although I still have the card, for me personally it doesn’t make sense to use anymore. The rewards on Amazon purchases are actually good, but surprisingly not the top payout. And since less than 3-4% of my total annual spending is on their site, it doesn’t make sense for me to use the Amazon Rewards Visa as my everyday card since the payouts on the other categories aren’t top dollar.
What’s the lesson here? Be warned… a store loyalty card doesn’t always give you the best rewards at its own store!