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Amazon Prime Reload: Deal or no deal?

Prime subscribers can now earn a 2 percent reward on every purchase. But are the hassles worth the savings?

If you don't mind tying up your funds in an Amazon gift-card account, you can earn an extra 2 percent.

As anyone who uses a cashback credit card knows, little savings can add up.

That's the idea behind Amazon Prime Reload, a new cashback program for Prime subscribers. With it you can get a 2 percent reward on everything you buy from Amazon. It may not sound like much -- but it can add up.

There is, however, a fairly significant catch: You can no longer use a credit card to pay for things, at least if you want your reward. Instead, Reload requires a debit card, along with a US bank account (ideally the one tied to that card) and a routing number. What's more, you need to fund an Amazon gift-card balance, which is what's actually used to buy things.

The cost of cashback

To put all this another way, you give Amazon, say, $100; Amazon gives you $102 to spend. The company effectively becomes your secondary bank, providing instant 2 percent interest every time you make a deposit (i.e. "reload").

There are limits, of course: The maximum single reload is $2,000, and your maximum possible reward can't exceed $196 per day. (Those probably aren't issues for most customers; the latter would equate to nearly $10,000 in reloads.) Furthermore, this is a "limited time offer" and "good while supplies last," meaning Amazon could decide to pull the plug at any time.

Why is the company doing this? Simple: Every time you use a credit card, Amazon has to pay fees -- most likely in excess of 2 percent. This way, it gets to bypass those fees while passing along some of the savings to you.

Now for the key question: Is it worth it?

Reload or reject?

If you buy a lot of goods from Amazon and/or use a debit card for those purchases, this is something of a no-brainer: a little shuffling of funds nets you a 2 percent savings you'd otherwise miss. (Although, technically, it's not savings, because the extra funds land in your Amazon gift-card account, not your bank account. So it's really bonus cash for spending.)

There are better perks to be had, however, starting with Amazon's own Prime Rewards Visa Card, which pays you back 5 percent on all Amazon purchases; 2 percent at restaurants, gas stations and drugstores; and 1 percent everywhere else. (It's not a debit card, though, so you can't use it with Reload.)

Of course, there are other credit cards that offer cashback perks as well, and not just at Amazon. Credit cards also afford purchase protection, fraud protection and other benefits not generally available via debit transactions. Therefore, if you typically pay off your balance every month, you're probably better off sticking with a credit card.

And don't forget the biggest red-flag: If you have funds tied up in your Amazon gift-card, you can't use them elsewhere -- like to buy groceries or get your car towed.

Ultimately, Reload may make sense for some Prime subscribers, but I'm going to pass.

Your thoughts?