The companies’ latest offer: New cardmembers who buy a Kindle with their Amazon Visa will get $100 off the price of the e-book reader — a 28% discount off its $359 retail price, and $70 bigger bonus than the $30 Chase typically offers new Amazon Visa applicants.
But it’s easy to see how this would benefit both parties: Amazon gets to sell more Kindles, and new Kindle owners will probably generate a flurry of follow-up transactions, like a bunch of books, and maybe a subscription to The New York Times. That generates more digital revenue for Amazon and more credit card transactions for Chase, which it gets paid to process. Because Amazon Visa cardholders get bonus rewards points shopping at Amazon, we assume people will use that card for the bulk of their Kindle purchases.
What we don’t know: Who’s subsidizing that extra $70. The language on Amazon’s site — “Thanks to Chase, you get $100 off Kindle when you get the NEW Amazon.com Rewards Visa Card instantly” — suggests it’s Chase. But it could just as easily be both companies footing the bill — as it’s a mutually beneficial transaction.
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