It is so tempting to use your Amazon Rewards points to buy things on Amazon ̵
How do you lose money by using your rewards on purchases? Because you only get money back when you use your card, not when you use your points. This is how it looks in practice.
Suppose you have an equivalent of $ 100 in Amazon points and want to buy something that costs $ 100. In the first scenario, you do not use points and you place the purchase on your Amazon Visa or Amazon Prime Store card. For this you get 5% back (the high cashback with Amazon-based purchases is the biggest advantage of using one of the Amazon cards). The effective cost of the product is $ 95.
In the second scenario, you use $ 100 in points to pay the $ 100 item. You might think: "Yes! This $ 100 product is free because I use my points!" The $ 100 product is $ 100, and you lose the $ 5 you get as a cashback reward – and the Cashback is probably the whole reason that you have an Amazon card in the first place.
Is it smart to do it? Don't let the excitement of getting something for free get better – buy the item with your Amazon card instead and then log in to your card account, where you can apply the accumulated cashback benefit to your balance, or have it deposited into your bank account – each far better option than missing out altogether.