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Amazon’s Latest Prime Perk: A Five Percent Cash-Back Credit Card

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• By Jason Del Rey
• @DelRey
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July 22, 2015, 6:46 AM PDT

Amazon continues to make a concerted effort to add new perks to Amazon Prime as it tries to funnel new shoppers into the membership program that turns casual shoppers into Amazon addicts. Here’s another Prime benefit that many people might not know about: Access to an Amazon credit card that pays back 5 percent on every Amazon.com order.

Amazon quietly introduced the card, the Amazon Prime Store Card, in March and has been slowly rolling out marketing for it on Amazon.com since then. But the company hasn’t done any PR around it, which is why I first learned of the Prime card by seeing a message on the site last week.

The card has no annual fee and allows Prime members to get 5 percent back in the form of a statement credit on all Amazon.com orders — not just Prime purchases — that they place with the card. The card also comes with some promotional financing options, but you should read the fine print yourself because credit card application fine print ain’t nothing to mess with.

The card is obviously great for Amazon if it attracts new shoppers to the Prime program, which costs $99 a year and comes with two-day shipping and media streaming, or helps retain current ones. But it’s also important because Amazon will likely be paying lower transaction fees on purchases made with Prime cards compared to purchases made with mainstream credit cards. That’s because store-branded cards typically carry low processing fees when they aren’t associated with Visa, MasterCard or American Express’ networks. As a result, expect Amazon to try its best to get cardholders to make the Prime Store Card the default payment option. (Full disclosure: I did.)

Some might also view the Prime card as a shot across the bow at Target, whose REDcard gives cardholders 5 percent back every time they use it and free shipping on Target.com purchases.

“While others may try and replicate parts of this offering,” a Target rep said, “we think REDcard paired with exclusive, only-at-Target merchandise and great prices on everyday essentials is an unbeatable value proposition.”

Well, Amazon is going to try to beat it.