Amazon just upgraded its no-fee credit card to offer 5% back on all Amazon purchases -- but there's a catch

Amazon Prime Rewards cardAmazonThe new Amazon rewards card is available only to Prime members.

Amazon just announced an attractive upgrade to its existing rewards credit card — but it’s for Prime members only.

The new Amazon Prime Rewards Visa Signature Card, in partnership with JPMorgan Chase,will be offered exclusively to Amazon’s Prime members granting 5% back on all purchases, as well as 2% back at restaurants, gas stations and drugstores, and 1% back on every other purchase, the companies said in a press release Wednesday.

Currently, Amazon offers a rewards credit card to all account holders with 3% back on all purchases. Prime members with this card will be upgraded to the new card — made with metal, like the popular Chase Sapphire Reserve card — and will start earning rewards immediately.

The card awards $1 back for every 100 points. Starting at 2,000 points, members can redeem the rewards for cash.

There’s no cap on the amount of rewards members can earn, and there’s no expiration date, as long as the account stays open. All points will be lost if a member closes the account linked to the rewards card.

While there’s no annual fee for the new rewards card (or foreign transaction fees), it’s only available to those who pay for a Prime account, which costs $99 a year and includes access to free two-day shipping and TV and movie streaming, among other perks. Non-Prime members can upgrade their account to apply for the new card. They will also get a $70 gift card upon approval.

The new Amazon-Chase rewards card comes on the heels of the bank’s announcement last week that it was slashing its 100,000-point sign-up bonus in half for the Chase Sapphire Reserve Card, effective January 12. The $450 annual fee credit card made waves for its lucrative rewards offerings when it debuted in August 2016. But it included benefits that were perhaps too generous. By December, JPMorgan Chase said it expected an earnings dip in the fourth quarter to the tune of $200 million to $300 million as a result of the card’s popularity, according to CEO Jamie Dimon.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

NOW WATCH: Here’s how much money you need to make to live in the 7 biggest US cities

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.