Well, this was surprising. I’ve been thinking about a dedicated Amazon card for a while now, because I do a ton of shopping on Amazon, and 3% on their card makes more sense than 1% on my Discover card. So, this article comes up today, and I finally decided to crunch the numbers.
I created an Excel sheet and entered in all the purchases from my last Discover bill. And I calculated what the rewards would be under the Amazon card - 3% for Amazon purchases, 2% for Gas Stations/Restaurants/Drugstores, and 1% Everywhere Else. My Discover card is a flat 1% everywhere, but with a rotating 5% on certain categories. But since the 5% deals have a cap, they’re barely worth mentioning - they only resulted in an extra $8 in rewards from Discover last month.
Amazon purchases: $475
Everything Else: $6,848
Rewards under the Amazon card would be $95 ($14 from Amazon, $12 from G/R/D and $68 from Everything Else)
Rewards actually paid to me by Discover... $88 ($80 from the 1% and $8 from the 5% rotating categories)
Clearly, if the Amazon spending was higher, the Amazon card would be better, but how much higher? To be really worthwhile, let’s say I want $25 back just from Amazon spending (because all other things are more or less equal). Well, $25 is 3% of what number? $834. I’d have to increase my spending by 75%.
Having a nearly $8,000 credit card bill is not normal for us - we paid for several things last month that are not every-month occurrences (school tuition and some business expenses that were reimbursed, for example). In a normal month where it’s several thousand less, the difference between the two cards’ rewards payouts - seven dollars! - would likely be even less.
Anyway, hope that’s useful to someone. I guess the moral of the story would be... rewards come slowly, even when you have large bills. And the differences between cash-back cards, even when they sound large (3% vs. 1%) might not be that large.
According to reviews on Amazon, The Amazon card (by Chase) now starts charging interest from the date of purchase instead of the end of the billing cycle. No thank you.
That same Amazon card does 2% with Office Supply stores as well as the Gas, Restaurants, and Drugstores. Don’t know if that makes the card more useful or not to you. I didn’t realize that it did that until I got it.