Amazon Prime credit card now offering 5 percent cash back at Whole Foods

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Eligible Amazon Prime members will now earn 5 percent back when they shop at Whole Foods using their Amazon Prime Rewards Visa Signature Card.

Cardholders who don’t belong to Amazon’s $99 annual Prime membership service will earn 3 percent back on Whole Foods purchases made with their Amazon Rewards Visa Signature Card, the company announced Tuesday.

Both cards will continue to offer elevated rewards on Amazon.com purchases (5 and 3 percent, respectively), plus 2 percent back at restaurants, gas stations and drugstores and 1 percent back on all other purchases.

What does this really mean?

Since acquiring Whole Foods last summer for around $13.4 billion, Amazon has quickly left its mark on the upscale grocery chain. In recent months, the online giant slashed prices on dozens of Whole Foods items and debuted exclusive discounts for Amazon customers.

This latest move builds on Amazon’s promise to bring “special savings and in-store benefits” to Prime members as the company continues to integrate Whole Foods into its flagship membership program.

Why should you care?

This new benefit could mean significantly higher rewards earnings for cardholders, but that depends on your spending habits and whether Whole Foods is where you buy most of your groceries. Let’s take a closer look at how much the average consumer could earn with the Amazon Prime Rewards Visa Signature Card or Amazon Rewards Visa Signature Card.

According to the U.S. Bureau of Labor Statistics, the average American consumer spent $7,203 on food in 2016, the most recent year for which data are available. Of that total, $4,049 went toward food at home (i.e. groceries) and $3,154 went to food away from home (i.e., restaurants and dining out).

Although your spending may vary significantly from those average figures, we can still use them to illustrate how much you’d stand to earn on food spending as a Prime member with the Amazon Prime Rewards Visa Signature Card:

Prime member with the Amazon Prime Rewards Visa Signature Card

Keep in mind that the Amazon Prime Rewards Visa Signature Card is only available with an eligible Prime membership, which currently costs $99 annually.

If you don’t take advantage of other Prime benefits, such as free two-day shipping and access to Prime Video, you might be better off with the Amazon Rewards Visa Signature Card. This card is available to non-Prime members with no annual fee.

Here’s what your food spending and rewards might look like with the Amazon Rewards Visa Signature Card:

Non-Prime member with the Amazon Prime Rewards Visa Signature Card

Do more rewards translate to more money in your pocket?

Keep in mind, Whole Foods tends to be more expensive than the average grocery store.

Shopping studies have found that Whole Foods prices may be as much as 20 percent higher than prices at Trader Joe’s, though that figure is subject to change depending on where you live and how aggressively Amazon continues to slash prices.

So, even with 5 percent back, shopping at Whole Foods might prove more expensive than shopping at other grocery stores.

What can you do?

If you’re on the fence about applying for an Amazon credit card, this latest perk for Whole Foods shoppers might be enough to convince you it’s time.

But you may want to wait a bit longer to see what else Amazon has in the bag when it comes to Whole Foods.

For example, Amazon is now experimenting with a free two-hour grocery delivery service for Prime members who order from Whole Foods stores in Dallas; Cincinnati; Austin, Texas; and Virginia Beach, Virginia. If the service expands to your area, that might give you even more reason to consider signing up for a Prime membership and applying for the Amazon Prime Rewards Visa Card.