Don’t Use the Amazon Credit Card at Whole Foods

There was plenty of buzz last week about the Amazon Credit Card earning 5% back at Whole Foods. One the surface this seems really good, but there is actually better ways to save to than the Amazon Card at Whole Foods.

Don’t Use the Amazon Card at Whole Foods

Sign Up Bonus:

The sign up bonus for the Amazon Credit Card is a magnificent $70 credit to Amazon. Now, I love Amazon, but I have a hard time pulling the trigger on this card for a $70 credit to Amazon.

The Annual Fee:

Let’s first end this idea that the Amazon Credit Card has no annual fee. Sure, you can have the card with no annual fee, but you’d only earn 3% back on Amazon and Whole Foods.

There is an indirect annual fee associated with this card and that is the $99 Amazon Prime Membership yearly fee.

The only way to earn 5% cash back is to cough up $99 a year.

That being said, if you are an Amazon Prime member, I assume you shop at Amazon quite frequently and use other services to make the $99 fee worth it.

Still, the fee should be considered since the extra 2% comes only if you pay the $99 fee.

Earning Rate:

If you are an Amazon Prime member you earn:

• 5% back on Amazon and Whole Foods
• 2% back Restaurants, Gas, and Drugstores
• 1% back everywhere else

If you are not an Amazon Prime member you earn:

• 3% Back on Amazon and Whole Foods
• 2% back Restaurants, Gas, and Drugstores
• 1% back everywhere else

While 5% sounds enticing to open this card, there are other cards/ways you can have 5% or more off on Amazon. We will discuss that below.

Redemption Options:

One thing to keep in mind, while this is a Chase card, you will earn Amazon points, not Ultimate Reward points.

You can redeem your Amazon points at 1 cent per point via:

• Amazon.com
• Statement Credit (starting at 2,000 points)
• Gift Cards (starting at 2,500 points)
• Travel

There isn’t anything special about the redemption options when it comes to the Amazon Credit Card.

Overall:

That was a quick review of the Amazon Credit Card. While you can earn 5% cash back with this credit card, I would give this card a pass. There are other ways to earn 5% back on Amazon or Whole Foods and you don’t need to be a Prime Member to do so.

Now Let’s Talk…

The other day, I read that the average Amazon Prime member spends $1,300 per year on Amazon vs $700 per year for a non-Prime member.

Personally, I think I do spend around that each year, if not slightly more. I really love Amazon, and when I can stack with Drop and the JetBlue Portal, it makes it even better.

Now, I don’t shop at Whole Foods, because I think the prices are a bit high for my liking. Even if I did, I would not be opening an Amazon credit card to save 5% as a Prime Member. Nor would I become a Prime Member to save an extra 2% (if I wasn’t already a Prime Member).

Other Credit Cards:

Since Whole Foods is a grocery store, if you have a card that has a grocery store bonus this will trigger it.

Here is a list of my top grocery cards.

Cards like the American Express Blue Cash Preferred, which earns 6% and the Everyday Preferred which earns 4.5 points per dollar, earn at a higher rate than the Chase Amazon Credit Card.

If you are in your first year of the Discover It, earning 10% back at Grocery Stores in Quarter 2, is going to be the best option.

For the Ultimate Reward lover in your life, the Chase Freedom is currently earning 5 points per dollar on all mobile payments. Quarter 2 hasn’t been released yet, but since they like to follow along with Discover, if could be Grocery Stores as well.

I would give these 2 cards the nod over the Amazon Credit Card as well. Discover has no redemption minimum and you can redeem directly on Amazon if you wanted with no restrictions.

The Chase Freedom, well it earns 5% back (or 5 points per dollar). If you use these for travel, you can receive a better value than your Amazon Credit Card.

Math Time:

Taking a look at the different credit card options, we have a few options.

I found this article interesting about grocery store spending by age, gender, and salary.

For this example, we will say the average grocery store purchases is $300 per month ($3,600 per year)

The Amazon Credit Card will earn:

• ($3,600*.05)- $99 = $81 per year in rewards

The Blue Cash Preferred will earn:

• ($3,600*.06) – $95 = $121 per year in rewards

The Everyday Preferred:

• $3,600 *4.5 = 16,200 Membership Reward Points.
• You value of these points will help you decide if this is a better option than the Blue Cash Preferred
• Also keep in mind this card has a $95 fee

Interestingly enough, if you shop at Whole Foods and have the Amazon Credit card, but you are not a Prime Member, you actually out earn the person who is a Prime Member:

• $3,600 *.03 = $108

This was just an example, you always want to run the numbers for your situation.

Discounted Gift Cards:

This option usually isn’t mentioned, but definitely should be. Depending on your goals, this could be a better option than using a credit card.

Currently, looking at discounted gift cards, you can receive up to 7.3% off your Whole Foods gift card purchase.

At the moment CardPool is out of stock, but you can earn 2% cash back through shopping portals.

For ease of math, we will say you pay using your 2% cash back credit card, you will save up to 9.3% on your Whole Food gift card purchase.

Even by those numbers, this could very well be a better option than earning points.

Amex Offers:

I love Amex Offers, they are just a really awesome way to save money.

In the past American Express has had offers to save money at Whole Foods. Also there have been offers to stores that sell 3rd party gift cards (to places like Whole Foods) to save you more than the ways mentioned above.

 

Conclusion:

While at first glance it seems great that the Amazon Credit Card offers 5% back when you shop at Whole Foods, there are much better options to save more money/earn more rewards.

If you have this card and none of the others, well then this will be your best bet. If you have any others not this list, those are going to be a better option for you.

Do you use the Amazon Credit Card at Whole Foods?

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