Considering getting an Amazon credit card? I’ve never been a fan of store credit cards, but when I learned about Amazon’s credit cards I was pretty intrigued. Amazon is a billion-dollar company that most people use daily if not weekly.
I don’t like how store credit cards are limited to just one retailer. Amazon, on the other hand, is a huge online retailer and one-stop-shop for a lot of items. Whether you’re looking for books, cooking utensils, furniture, or holiday toys for your kids, you’ll find what you’re looking for on the website.
An Amazon credit card can also help you save money and earn rewards from your regular everyday purchases.
Still, with any credit card, it’s important to know how to use it wisely to avoid debt and extra fees. If the thought of getting an Amazon credit card has crossed your mind, here are some tips to help you use it wisely.
Consider Taking Full Advantage of the Card Features
Amazon’s credit card is a rewards credit card which makes it extremely popular. If you’re going to hold a rewards credit card, you might as well take advantage of some of the rewards being offered.
The Amazon credit card offers:
- 5% cashback at Amazon and Whole Foods (with an eligible Prime membership)
- 2% cashback at restaurants, gas stations and drug stores
- 1% cashback on utilities, rideshare, and all other purchases
- 10% cashback on select products (with a Prime membership)
This card also has no annual fee and no foreign transaction fees. These cash-back features are pretty great. You can use this card to shop for groceries, pump gas, utilize rideshare services, and order anything from Amazon and earn money. You’re probably already spending money in all these areas anyway without receiving rewards. Knowing that you’ll earn at least 1% cashback for any purchase you make is another nice benefit.
Some other cash-back cards offer similar rewards but in rotating categories that change each quarter. This can make it very difficult to earn rewards since you’ll have to keep up with which offer is available depending on the month. With an Amazon credit card, these cash-back offers are available all year round.
See If An Amazon Prime Account is Right For You
Only Amazon Prime members get to take advantage of 10% cash back on select Prime products along with 5% cashback on groceries at Whole Foods and other Amazon purchases.
This creates a big incentive to obtain an Amazon Prime membership. Yes, it does come with a fee of anywhere from $5 to $6 per month if you’re a student to $12 per month for everyone else. However, Amazon Prime comes with its own benefits two like most notably, free 2-day shipping.
If you’re already spending money on Amazon regularly, a Prime membership could save you month. Then, the Amazon credit card could help you save even more on your everyday purchases.
Keep Your Utilization Below 30%
As with any credit card, you want to keep your utilization below 30% of your credit limit. This means, if you have a $2,000 credit limit you try not to spend more than $600 on the card each billing cycle.
Maintaining a balance with high utilization of your credit limit will only drive your credit score down. It makes you seem less reliable and trustworthy to future lenders.
Another reason to keep your utilization low is that it will help you avoid completely maxing out your credit card. You can buy almost anything on Amazon. But if you give yourself a reasonable monthly spend limit, this will help you avoid going overboard and getting into serious debt.
Use the Welcome Bonus to Supplement Other Amazon Spending
Amazon welcomes most new card users with a one-time bonus or Amazon gift card which can be as much as $150. This amount may vary, but look out for incentives like this and offers from Amazon before you apply for their credit card.
Sure, the reward is often a gift card that you can use to buy more stuff on Amazon. However, it’s Amazon, remember. You can use that gift card to stock up on household items or lower the cost of the new lawnmower you really needed.
Or, you can use the reward money to shop for holiday gifts for your kids. Either way, purpose to put the money toward a need that you have so you can save more of your own cash.
Enjoy No Interest on Larger Purchases
Another helpful feature that Amazon credit cardholders get is no interest on purchases of $600 or more during the first 12 months. Let’s say you make a big purchase like a new mattress or another item with this credit card. You can save more money as you take up to a year to pay it off.
The average credit card interest rate is around 16%. Other cards are much higher so this feature can be a major relief.
Summary: The Amazon Credit Card is One Store Card That May Be Worth It
Deciding whether to get an Amazon credit card is totally up to you. This card has proven to be one of the best store credit cards so far. It’s flexible and comes with a lot of perks. The only major downside is that you might have to start paying for an Amazon Prime membership if you don’t already have one.
On the bright side, if you make just a few orders per month, you’ll save end up saving more than that $12 monthly fee on your shipping costs. Plus, you’ll earn more cashback and get access to other benefits like Prime Video.
Would you ever consider an Amazon credit card? Why or why not?