NewDay, a major issuer of credit cards in the UK, has decided to end its relationship with Amazon. The decision means two Amazon-branded credit cards will be axed early next year.
The news will likely come as a disappointment to Amazon cardholders who regularly earn points to spend on the retailer’s website.
However, the good news is that there are other ways you can continue to earn cashback at Amazon. Here’s everything you need to know.
[top_pitch]
How do Amazon credit cards work?
There are currently two Amazon-branded credit cards: Amazon Platinum and Amazon Classic. Both are facing the chop, which is expected to impact roughly 800,000 account holders.
Amazon Platinum credit card customers can currently earn 0.75 points for every £1 spent on Amazon and 0.25 points for every £1 spent at other retailers. And 100 points is equivalent to £1 to spend on the Amazon website.
If you’re a Prime member, then you can earn double points when making purchases on Amazon. The representative APR on this card is 21.9%.
Meanwhile, the Amazon Classic credit card is essentially just a credit card that can help to improve your credit score. It doesn’t offer any Amazon points when you spend on the card. The representative APR is 29.9%.
Both cards typically reward new customers with a £20 Amazon gift card.
What is happening to Amazon’s credit cards?
If you have either of Amazon’s credit cards, you’ll be automatically be moved to a NewDay ‘Pulse’ credit card from January next year. It’s been reported that this new card will offer 0.25% cashback on all spending. However, the maximum cashback you’ll be able to earn in a year will be capped at £150.
NewDay hasn’t revealed further details about its new card, so we don’t know what the representative APR will be.
If you’re an Amazon customer and you don’t want to be transferred to NewDay’s new offering, then you’ll need to close your Amazon credit card account before January. It’s worth knowing that you can continue to use your Amazon credit card until the changes are made.
Do bear in mind that any debt you have on an Amazon credit card will still need to be repaid, even after the cards are axed.
[middle_pitch]
How can you continue earning Amazon points?
While some Amazon Platinum credit card users may shed a tear at the news they’ll no longer be able to use their card from next year, it’s possible Amazon will find a new credit card issuer and continue to have credit cards in its name.
However, Amazon hasn’t yet given any indication that this will be the case. As a result, if you’re keen to continue earning points to spend at Amazon, it’s may be worth looking at some alternative options.
Right now, there are two rewards credit cards that give you points for everyday spending. These points can be spent directly at Amazon.
Amex Preferred Rewards Gold
The American Express Preferred Rewards Gold is the most generous offering right now. Sign up for it and you’ll get 20,000 bonus ‘Membership Reward’ points if you spend at least £3,000 on the card within your first three months.
On top of this, you earn ongoing points too. You get one point for every £1 you spend on the card, regardless of the retailer. This unofficially works out at a 0.45% ‘cashback‘ rate at Amazon. As an added boon, Amex also throws in two free airport lounge passes.
The representative APR is a hefty 60.1%, including the fee, so ensure you clear your balance in full each month if you go for this card. Note that the card comes with an annual £140 fee, though it’s fee-free in the first year. This means that if you cancel the card within your first year, then you’ll pay nothing.
You can spend Membership Reward points directly on the Amazon website. And 1,000 points is equal to £4.50 in Amazon points. That means that if you bag the introductory 20,000 bonus by spending £3,000, you’ll have 23,000 points. This would be worth £103.50 on the Amazon website.
Amex Rewards
If the Gold card above isn’t for you, then consider the Amex Rewards credit card. It doesn’t have a fee, and gives 10,000 bonus Membership Rewards points if you spend £2,000 on the card within your first three months. This means that if you hit this trigger spend, you’ll have 12,000 points, which are worth £54 at Amazon.
You’ll also earn one point for every £1 you spend on the card.
If you get this card, then ensure you clear your balance in full each month. If you don’t you’ll have to pay 24.7% representative APR interest.
Keen for more options? Take a look at The Motley Fool’s list of the top-rated rewards credit cards.
