If you’ve never heard of Amazon before, chances are you’ve never heard of online shopping either. The two go hand-in-hand.
In fact, Amazon has become the largest online marketplace for Canadians – so it’s safe to say that many of us actively buy from Amazon on a regular basis. And the competition is feeling the heat.
So if you’re one of the many Canadians to purchase their essentials from Amazon, you’re probably wondering what credit card is best to earn the most rewards for your spending?
We’re taking a look at just that, plus a new surprise contender, coming to the Canadian credit card market soon…
|Credit Card||Why It’s Good||Annual Fee||Welcome Bonus||Apply Now|
|American Express Cobalt||Connect directly with Amazon.ca to make purchases with points.||$120||Up to 30,000 points (terms)||Apply Now|
|American Express SimplyCash Preferred||2% cash back on all purchases||$99||5% cash back on all purchases, up to $6,000 spent (terms)||Apply Now|
|National Bank Echo Mastercard||1.5% cash back on online purchases||$30||None||Apply Now|
|Home Trust Preferred Visa||No foreign exchange fees||$0||None||Apply Now|
Ends December 18, 2019.
Amazon’s “Prime Effect”
As the largest online marketplace in Canada, you can buy literally anything from Amazon at extremely competitive pricing and record delivery times – one of Amazon’s tactics in squashing their competition.
They provide low, low, low prices, barely keeping their own noses above water, so the rest of their competition ends up 6 feet underwater.
Just take a look at what’s been happening to brick-and-mortar stores across North America…They can’t keep up.
Plus, throw in an Amazon Prime Membership in there, and you get the perfect combination for customer loyalty.
By paying for a membership, we tend to want to maximize the value of that membership – meaning we spend more at that specific company.
Online shopping habits
Using myself as an example, after I purchased a Prime Membership, my Amazon spending doubled in the first year.
The total money I spent at Amazon in 2016 was $744.03.
After I got my Prime Membership, in 2017, I spent $1,499.37.
And in 2018, I spent $1,723.32.
This might not be accurate for everyone, but it’s safe to assume there’s a definite “Prime Effect” happening here.
And that’s not necessarily a bad thing…It just means Canadian consumers are changing their buying habits to make their lives easier.
And Amazon does just that.
Amazon credit cards Canada
So what credit card is the best for rewards on Amazon purchases?
But, not all hope is lost. There are still some great contenders out there, plus one rumoured to be coming to the Canadian credit card market soon…
And as an added bonus, all these cards have no income requirements, making them accessible to everyone.
American Express Cobalt
The undisputed king of Canadian credit cards, the
What’s cool about this card is you’re able to link your Amex Membership Rewards to your Amazon account and use points to pay for purchases at a 0.7 cents per point value – points you’re sure to earn tons of at the following rates:
- 1 point per $1 spent on all purchases,
- 2 points per $1 spent on gas and travel purchases, and
- 5 points per $1 spent on grocery and restaurant purchases.
Although this card doesn’t earn you any extra rewards for your online purchases, the potential for free (or almost free) Amazon purchases is pretty intriguing.
For its $10 monthly price tag and no income requirements, you’ll also get up to 30,000 points as a welcome bonus when you spend $500 for 12 consecutive months.
American Express SimplyCash Preferred
The second best alternative for Amazon purchases is the
On a typical $2,000 monthly spend, that’s up to $480 rewards per year. Despite American Express’ limited acceptance at most retailers, there’s some definite value here.
But if you think its $99 annual fee is a deal breaker, there’s always its little brother, the
National Bank Echo Cashback Mastercard
You’ll earn 1.5% cash back on online purchases, gas, and groceries, up to a combined spend of $25,000. Afterwards and on all other purchases, you’ll get 1% cash back.
And unless you spend over $1,000 per month on gas and another $1,000 on groceries, don’t let that spending cap scare you.
Although this card is ideal for Amazon purchases, it might not be the best for online purchases made in a foreign currency, where you’ll be charged a foreign exchange fee of 2.5%. The 1.5% will offset this a bit, but you’ll still net a loss of 1%.
You’ll get all this for no income requirements and a low annual fee of only $30.
Home Trust Preferred Visa
When the Chase Amazon Visa left the Canadian market, the
This no annual fee card waives the 2.5% foreign exchange fees, plus gives you 1% cash back on all purchases – a net savings of 3.5% on foreign exchange purchases. So, if you frequently shop at the American Amazon site, you’ll really start saving yourself some extra cash on those purchases.
What’s more, it also offers complimentary roadside assistance for whenever you find yourself and your vehicle in a pickle.
A new Amazon credit card?
Recently, we were surprised to catch wind of a rumoured Amazon credit card. Alleged to be issued by MBNA, the card could be debuting on the credit card market as soon as 1-2 months from now.
The card’s earn rates are dependent on whether or not you have an Amazon Prime membership.
For Prime members, here’s what we know about rewards:
- 2.5 Amazon Rewards points per $1 spent at Amazon.ca, Whole Food Markets, any physical Amazon store, as well as foreign currency transactions, and
- 1 Amazon Reward point spent everywhere else.
And for non-Prime-ers:
- 1.5 Amazon Rewards points per $1 spent at Amazon.ca, Whole Food Markets, and any physical Amazon store, and
- 1 Amazon Reward point spent everywhere else.
Although these rewards are quite good, compared to the credit card formerly known as Chase Amazon Visa, your rewards can only be used against Amazon purchases. Plus, you won’t get your foreign exchange fees waived, you’ll just be earning some extra rewards on your foreign purchases.
Are you a big Amazon.ca shopper? Do you agree with our picks?
Which credit card do you reach for to pay for your purchases?
Let us know in the comments.