Amazon.com, Inc. (NASDAQ:AMZN) didn’t just release its Prime credit card, but it’s adding a new incentive — up to 5% cashback.
The premise for the previous iteration was simple enough: buy things (with your Prime membership), get 3% cashback. The extra 2% AMZN just announced is all the more appealing:
“You can check if your card earns 5% Back on Amazon.com purchases by going to Your Account and clicking Manage Payment Options. Expanding the details of your Amazon Rewards Visa Signature Card will show how much you’re earning on Amazon purchases, and you can learn how to update your card to earn 5% Back if it’s earning 3% Back and you have an eligible Prime membership.”
Those with an eligible Amazon Prime membership earn 5% back from Amazon.com purchases, while purchases at restaurants, gas stations and drug stores net 2% cashback, and all other purchases yield 1%. The kicker, though, is that you can only spend your cashback bonuses with Jeff Bezos & Co.
Obviously, this card doesn’t appeal to anyone who isn’t on Prime, but it’s yet another reason to take the Prime plunge or for current Prime members to squeeze every last value out of their $99-per-year membership. There’s also no annual fee and no extra charge for foreign transactions.
Amazon Prime is key to the AMZN stock investment thesis, and funneling new subscribers into its Prime ecosystem is a battle Amazon is winning. As many as 69 million people boast a Prime membership. If each of them already spends double the amount of non-Prime Amazon.com shoppers, then this extra incentive to shop could sharpen Amazon’s edge even more.
AMZN stock is down 0.32% Wednesday morning.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.