Amazon Prime was launched in 2005 as an express shipping membership program and more than a decade later it has tens of millions of subscribers who enjoy a lot more than just free, fast shipping on millions of products Amazon sells. 

From video and music to photo storage and access to Amazon’s own line of products under the Amazon Elements brand, Amazon continues to add benefits for Prime members in an effort to lure new Prime members and retain existing ones.

The latest benefit: a new credit card available exclusively to Prime subscribers.

Dubbed the Amazon Prime Rewards Visa Signature Card, the new credit card, which is offered through Chase, offers cardholders 5% cash back on all of their Amazon purchases, as well as 1% to 2% cash back on purchases in other categories.

There is no cap on rewards earned, no minimum rewards balance to redeem, and rewards never expire. Additionally, the new card doesn’t have an annual fee.

Prime subscribers who already have Amazon’s Amazon Rewards Visa Signature card, which offers 3% cash back on Amazon purchases, will be automatically upgraded to the new card. New cardholders will receive a $70 Gift Card once they’re approved.

Amazon’s most valuable asset

Amazon Prime is arguably Amazon’s most valuable asset – one that other retailers like Walmart are trying to replicate – and the Amazon Prime Rewards Visa Signature Card could be one of the most important additions to the growing list of Prime membership benefits.

As The Motley Fool’s Daniel B. Kline explains, Amazon’s new Prime-only credit card, with its 5% cash back on Amazon purchases, now has a more noticeable edge over Costco’s Visa Anywhere Card, which offers Costco members 2% cash back on all purchases at Costco clubs or on the Costco website.

Costco, of course, is the largest membership warehouse (Read more...) in the U.S. and the second biggest retailer in the world, making it a juicy target for Amazon, which is poised to capitalize as more and more consumers find that they can do more and more of their shopping online at equal or greater convenience.

As Kline notes, “The previous Amazon card offered 3% off on its website, which may not have been enough to sway Costco loyalists. In this case, the online retailer has topped the warehouse club’s in-store discount by 3% while adding a lesser, but still nice package of non-store discounts.”

While the hefty cash back rewards of the Prime Rewards Visa Signature Card will come at a cost to Amazon, margins aren’t Amazon’s primary concern. Instead, Amazon clearly has the goal of becoming the nation’s go-to retailer, and with research indicating that Prime members spend more than their non-Prime counterparts, launching a Prime-only credit card with hefty cash back rewards seems like a logical move.

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