If you’re a faithful Amazon.com shopper, you’ve probably at least considered the Amazon Store Card. Created for Amazon Prime shoppers, this card makes it easy to earn 5% back on whatever you buy at the online superstore. On the flip side, you can also choose to forgo the 5% back and stretch out your payments with zero interest over several months instead.
Like most store credit cards, the Amazon store card doesn’t charge an annual fee. However, it’s only good for Amazon.com purchases, and can’t be used just anywhere. Still, with free cash back and no fee, what’s not to like?
Like any other financial product, the devil is in the details when you look at how the Amazon Store Card works. Here’s a basic rundown of the Amazon card’s myriad financing options, along with how they can help you save.
How the Amazon Store Card Works
With the Amazon Store Card, you’ll earn:
- 5% back on total cart purchases up to $149
- 5% back or 6-month financing on purchases of $149 or more
- 5% back or 12-month financing on purchases of $599 or more
- 5% back or 24-month financing on select Amazon-sold items
In addition to these options, you can also enjoy 0% APR on specific Amazon purchases if you opt to make 12 equal monthly payments. This can come in handy if you plan to make a large Amazon.com purchase (holiday shopping, maybe?), but want to pay it off gradually without paying interest all along.
That all sounds great, but the fine print reveals the real kicker. Sure, you get 0% APR for a limited time, but because of the way interest is compounded and charged, you’ll be in for a rude awakening if you don’t pay your purchase in full by the time your promotional period is over.
If your balance doesn’t hit zero before the promotional period ends, you’ll owe backdated interest on the entire purchase. Worse, the Amazon Store Card comes with an APR of 26.24%!
In other words, failing to pay your balance in full before the 0% financing period ends means you’ll owe interest from the day you made the purchase. If you know anything about credit, you already know what a huge downside this is. And really, this should probably be a deal-breaker unless you’re 100% certain you can pay your purchase in full within the promotional timeline.
Another Option: Consider the Amazon.com Credit Card
If you’re not too keen on the way interest accrues with the Amazon Store Card, you can always consider the Amazon.com credit card instead. This card offers 3% back on Amazon.com purchases, 2% back at gas stations, restaurants, and drug stores, and 1% back on all other purchases.
Another important difference is that you don’t have to be an Amazon Prime member to apply. And like its store card counterpart, the Amazon.com credit card doesn’t charge an annual fee, either. Better yet, you can use the Amazon credit card anywhere Visa is accepted – and not just at Amazon.com.
And since it’s a traditional credit card, interest only accrues on actual balances you owe. Plus, the standard APR falls within a more reasonable range of 14.49% to 22.49%, based on your creditworthiness. That’s not great, but it’s better than the 26.24% APR the Amazon.com Store Card offers.
As a potential downside, you’ll only earn 3% back on Amazon.com purchases instead of the 5% you would earn with the store card. If you spend a lot on Amazon.com, the difference in earnings could be substantial.
A Better Option for Amazon.com Purchases?
Still, Amazon.com doesn’t have the market cornered on credit cards for their website. With Discover it® Cash Back, you get 1% unlimited cash back automatically on every purchase you make. The kicker is, you also get 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
- Related: Discover it® Cash Back Review
The Discover it® Cash Back doesn’t charge an annual fee, which means you can keep it in perpetuity without paying for its benefits. Speaking of benefits, this card offers your free FICO score on your monthly statement and no foreign transaction fees. You also get 0% APR on balance transfers for a full 14 months and then the ongoing APR of 13.49% – 24.49% Variable APR. That’s a pretty sweet deal for a no-fee card that offers amazing rewards.
Discover it® Cash Back
Card Highlights Provided by Discover:
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
- Earn unlimited 1% cash back on all other purchases – automatically.
- INTRO OFFER: Discover will match ALL the cash back earned at the end of your first year, automatically.
- Redeem cash back any amount, any time. Rewards never expire.
- Use your rewards at Amazon.com checkout.
- Receive FREE Social Security number alerts—Discover will monitor thousands of risky websites when you sign up.
- No annual fee.
If you’re thinking of signing up for the Amazon.com Store Card, make sure to consider the alternatives that are out there. While it’s true 5 percent back is hard to beat, other rewards credit cards are fairly generous when it comes to Amazon.com purchases, too.
- Two Rewards Cards Every Amazon Prime Member Needs
- Six Facts You Should Know About 0% APR Credit Cards
- The Top 10 Credit Cards Available Today
Do you have the Amazon Store Card or the Amazon.com credit card? Why or why not? What alternatives do you use instead?
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