Chase announced yesterday that the Amazon Credit Card rewards points can now be used to pay for Amazon.com merchandise. Using the new Amazon Shop with Points program, cardholders can redeem their rewards at checkout, at the rate of 100 points to the dollar. That’s in addition to other redemption options, which include gift cards, cash or travel credits, redeemable at the same rate. But the Shop with Points option is more flexible: you can redeem as many or as few points at checkout as you’d like, and supplement the rest of the purchase with another payment option. Says Chase Card Services General Manager Chris Conrad, “This new feature delivers terrific value with fast and easy access to rewards points instantly redeemable for millions of items on Amazon.com.”

The Amazon Visa has a lot going for it: 3% rewards at Amazon.com, 2% on restaurants, gas, drugstores and office supply stores, and 1% everywhere else. Plus, there’s no annual fee, and a $30 Amazon.com gift card on signing. This is a pretty solid rate, especially considering:

  • Amazon.com sells pretty much everything
  • This means you get 3% rewards on clothes, books, movies, music…pretty much everything except travel, gas and groceries
  • Oh, and you get 2% on gas, dining out, drugstores and office supplies. That’s a pretty broad range
  • You can earn unlimited rewards

And now, redeeming those points is a lot simpler. Time was, you could redeem 2,500 points for a $25 Amazon gift card or 5,000 points for $50 cash back. Now you can redeem any number of points to offset an Amazon.com purchase, and as always, points don’t expire.

In our rewards credit card lineup, we decided that, purely based on rewards rates, Amazon isnt always the standout card. We usually prefer the Citi Forward over the Amazon credit card, since the Forward earns 5 ThankYou points per $1 spent at restaurants, movies, music and books, and it tends to count Amazon.com as a bookstore. This means you can end up earning more rewards at Amazon than with the companys own card.

It also earns 1 ThankYou Point per $1 spent elsewhere. However, there’s a 75,000-point yearly cap, so if you spend $15k in bonus categories alone you’ll max out. This cap is high enough that most people won’t hit it, but if you do spend a lot of money on Amazon, it’s something to keep in mind.

The major consideration is the Amazon points versus ThankYou Points. In this, the Amazon credit card clearly emerges as the winner. Citi’s ThankYou Points expire 5 months after you earn them (Amazon’s never expire) and you have to accumulate quite a few points before you can redeem them. To get the 100-points-per-dollar conversion rate, you need to rack up 10,000 of them and trade them in for a $100 gift certificate. If you’re impatient and redeem 6,000 of them, you’ll only get $50. Amazon’s rewards points are far more flexible, especially now that you can redeem them against an online purchase.

Our new verdict: Amazon wins for flexibility, the Forward for all-around rewards rate.

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