A reader named Harold emailed my recently. We discussed a number of topics, one of which was the Amazon.com Rewards credit card.
Here’s what Harold had to say:
would mention one more to you..the Amazon visa. I’ve been using it over the past year and very happy with it. You get 1% match on everything, 2% restaurants and drugstores and 3% on Amazon purchases. Can use the points to purchase items on amazon.com website. Works very well.
I checked it out and the rewards package is as Harold described it:
The rewards make the card ideal for those who shop a lot at Amazon. Three percent back on all purchases can’t be beat with other credit cards. That still leaves the question as to whether it’s a good card for all other purchases.
One percent cash back is the standard reward in the credit card industry. Any rewards over and above this amount have some stipulations. For example, some cards will offer higher rewards, but only on select categories of purchases (like the Amazon 3% cash back on Amazon purchases and 2% back on gas stations, restaurants and drug stores).
There can also be spending limits on the rewards (like apply to all cards offering 5% cash back on rotating categories). That’s not meant as a criticism; it’s the reality of the market. The key is to understand the restrictions when choosing a rewards credit card.
My favorite reward cards are those that pay 2% back on every purchase. The catch there is that to get the full benefit of the rewards, they must be spent on travel. That works well for us because we travel enough each year to use the rewards. Another such cards is the Capital One Venture Rewards Card.
Still, the Amazon card does offer rewards that place it in list of top rewards cards. The 3% cash back can’t be beat on Amazon purchases and the 2% categories cover a significant part of most family’s budget.
There’s also a nice feature for Amazon lovers. Because it’s an Amazon credit card, the rewards are available directly on Amazon when you check out. You can simply choose to use your rewards to pay for an order.
This feature is available with other cards. For example, Amazon purchases can be paid with rewards points earned from American Express. The problem there is that many times the rewards are worth less than 1%. I’ve seen situations where I’d have to use say 25,000 points to pay for a $200 item. That’s not a good deal. Here the Amazon card definitely is the better offer.
Another nice feature is the $70 bonus when you are approved for the card. It comes in the form of an Amazon gift card and will be loaded into your Amazon account upon card approval.
There are, as you might expect, a few downsides to the card. First, the interest rates can be quite high. As of the publication of this article, the interest rate ranges from 14.24 to 22.24% depending on credit worthiness. In addition, the card does not come with a 0% offer either on balance transfers or purchases.
Finally, you can read reviews of this card on Amazon of all places. Just like reviews of all products on Amazon, you’ll find both positive and negative reviews. To date there are 2,405 reviews with an average star rating of about 4 out of 5.
If you are still undecided, you can check out the credit card section of this site for more options.Topics: Credit Cards