4 Things to Know Before You Shop With Points on Prime Day

This story is part of Amazon Prime Day, CNET’s guide to everything you need to know and how to find the best deals.

When you’re shopping for Prime Day deals on July 11 and 12, there’s a small button at checkout you need to be prepared for. If you’re a frequent Amazon shopper, you’ve likely already seen it before. Nestled in the payment methods section, next to your credit card selection, you may see a toggle to opt to use your credit card points to cover your purchase.

I never click it, and I would advise you to think twice before you do, either.  

Shop with Points allows you to link a participating credit card and use your credit card points to cover all or part of your Amazon purchase, directly at checkout. It can be a convenient way to spend your credit card rewards if you have no better options, but it can also be a waste of points that could’ve been more valuable if spent elsewhere. 

Here are four things to know before you spend your hard-earned credit card points on Amazon. 

1. You may be getting less value for your points than you think

Most cash-back cards offer a standard 1 cent per point when redeeming your points for cash or a statement credit. Using your points to cover purchases on Amazon sometimes gets the same conversion rate, but not in all cases. 

Here’s how much your points from popular credit card rewards programs are worth when using them for Shop with Points. Note how more than half of the rewards programs offer less than 1 cent per point when you redeem your rewards on Amazon:

The above chart shows the typical conversion rate for each issuer, but it may vary depending on which specific card you have. You can always get an accurate calculation of how much your points are worth based on what Amazon shows you at checkout: If you’re spending 2,500 points to take off $25 from your purchase total, then every point is worth 1 cent.

2. Using points from travel cards is almost always a waste

Anything that gives you less than 1 cent per point is usually a subpar redemption, but it’s an especially raw deal when you use points from travel cards. That’s because most travel cards let you transfer your points to hotel and airline partners to book free flights and stays that are worth much more than the value of the Amazon merchandise you could get for the same amount of points.

Say, for example, you had 34,000 Chase Ultimate Rewards points on your Chase Sapphire Preferred® Card. If you redeem them via Shop with Points on Amazon, you’d be able to get $272 worth of merchandise. Redeemed for direct cash back or statement credits, your points would be worth $340. But if you transfer your points to Iberia Airlines and find a travel award “sweet spot” -- like a business class flight to Europe that’s worth $3,657 but only costs 34,000 in Avios, Iberia Airlines’ rewards currency (plus taxes and fees) -- you could get an approximate value of 10.8 cents per point, more than 10 times what you’d get from Amazon.

And it’s not just Chase. The five credit card reward programs that offer the least value for your points through Shop with Points -- Capital One, Chase, American Express, Bilt and Citi -- all offer transfer partners that give you, on average, 1.8 cents to 2 cents of value per point, according to The Points Guy’s valuations. That means you’re cutting the potential value of your points by around half if you redeem them with Shop with Points instead of travel partners. 

3. You can take advantage of Shop with Points special offers by using only 1 point (usually)

If you have a credit card enrolled in Shop with Points, you may have received targeted promotions from your issuer offering heavy discounts -- as much as 50% in this example from Amex -- when you use your points at checkout. These offers can make Shop with Points a good deal. But there’s a loophole that might not be obvious from the marketing materials: You don’t need to pay for your entire purchase with points to get the discount.

Though you should always check the terms and conditions of your specific offer, most of the time, you can get the discount by using only 1 rewards point and paying for the rest of the purchase with your card. When you Shop with Points at checkout, Amazon will automatically apply the maximum amount of points to your purchase -- either enough points to fully cover the transaction or your entire points balance, whichever is less. Before you confirm your purchase, you can manually adjust how many points you want to use by filling out a box in the payment methods section. Simply adjust the value to 1 point, double-check that the discount is still active and enjoy your savings without wasting your precious credit card points.

4. Shop with Points CAN be your best option in certain situations

Though Shop with Points almost always provides equal or lesser value than other redemption options, there are a few niche situations where it might make sense for you. 

In situations where direct cash back or a statement credit gives you equal or greater value than Shop with Points, I would advise you to redeem your points directly for those cash equivalents and then use it to reimburse yourself, rather than going through the Shop with Points program. Although the end result is the same, doing it this way lets you earn points on the purchase and gives you more control by cutting out the intermediary (Amazon).

But that’s not an option with every credit card. Some travel credit cards offer significantly lower redemption ratios for cash back and statement credits.

Take, for example, the American Express® Gold Card, which lets you redeem your points for travel, Shop with Points, a statement credit to cover eligible charges and more. However, statement credits only give you 0.6 cent/point compared with 0.7 cent/point through Shop with Points. If you don’t want to redeem your points for travel, Shop with Points at Amazon is actually a better deal than a statement credit.