SEATTLE—Amazon is heating up the battle for rewards cards with an Amazon Prime credit card that offers 5% off every Amazon purchase, plus 2% back at restaurants, gas stations and drugstores and 1% back on every other purchase.
The card is available to Amazon Prime members—and according to Consumer Intelligence Research Partners, nearly half of U.S. households have an Amazon Prime membership.
The credit card is included in each Amazon Prime membership and therefore has no additional annual fee. The credit card waives all foreign transaction fees, Forbes reported.
“Amazon wants to increase its Prime membership base, which has been a major profitability and growth engine for Amazon—the company says Prime members spend twice as much as regular members, given the unlimited free shipping—and an effective strategy to retain its customer base,” stated Forbes. “The 5% cash back is a push to migrate more consumers from brick and mortar retailers. By bundling the credit card with Amazon Prime, Amazon has an advantage over its retail competitors by providing free streaming content on top of the extra credit card benefits.”
As CUToday.info recently reported, a credit card “rewards war” is taking place among many of the biggest issuers. Many of the big banks, including BofA, Chase and Citigroup, have reported that their card income is down due to investments made in beefing up rewards programs. Credit card expert Tim Kolk told CUToday.info that the big banks are realizing that it will take a sizeable investment in their rewards programs to win, and that many CUs face an “inflection point” with their rewards offers—step up and compete or risk members leaving them behind.