Amazon Prime loyalists and fans of the company's Alexa digital assistant will find a lot to like about the newly launched Amazon Prime Rewards Signature Visa card.

But for those who aren't Prime members or don't do a lot of shopping on the online retail giant's website, there are plenty of other credit cards that might make more sense. 

The biggest benefit of Amazon's new card is that you get an effective discount of 5 percent (in the form of rewards points) on everything you buy at Amazon.com.

The card also will give you a 2 percent discount (also in rewards points) when you use the card at restaurants, gas stations, and drugstores, and 1 percent back on all other non-Amazon purchases.

The rewards points can be used at Amazon.com or redeemed through JPMorgan Chase—Amazon's partner bank—for cash back, gift cards, or travel.

Of course, you can get the Prime Rewards card only if you have a Prime membership, which costs $99 per year (the card has no annual fee, however). But Amazon is giving you an added incentive to sign up: a $70 Amazon gift card as a bonus, effectively cutting the cost of your first year's membership to $29.

Still, even if you don't want a Prime membership, you can get an almost identical card called the Amazon Rewards Visa Signature card. It offers many of the same benefits but provides only 3 percent back in rewards points on Amazon purchases and a gift card signup bonus worth $50.

The Prime card looks like a pretty good option for Amazon Prime members, says Beverly Harzog, credit card expert and author of "The Debt Escape Plan". But she cautions that people might be tempted to overspend to get rewards points.

“My concern with this card is that it's going to encourage people to get on Amazon and buy a lot of stuff,” she says. “Don’t go crazy trying to get 5 percent back.”

She has reason to be concerned. According to an analysis (PDF) from Consumer Intelligence Research Partners, Amazon cardholders spend 16 percent more per year than Amazon Prime members who don't have an Amazon credit card. 

Amazon's new card joins an already flooded market of travel rewards and cash-back cards.  

Chase is offering—though winding down—a sign-up bonus of 100,000 points to those approved for its Chase Sapphire Reserve card. At this point, though, to get the deal you have to apply in person at a physical branch by March 11th. Other cards, like the Citi Double Cash or Capital One Quicksilver card, also offer great rewards.

Consumers have more choice than ever before when it comes to picking the best rewards credit card. As banks compete to woo new customers and maintain current ones, making sense of the generous sign-up bonuses and ongoing rewards offerings can be overwhelming.

“It’s absolutely positively a buyer's market in the credit card business. It’s a good time to be a consumer right now,” says Matt Schulz, senior industry analyst at CreditCards.com.

Consumer-Friendly Rewards Redemption

The most compelling feature of the Amazon Prime Rewards card may be how easy it is to redeem rewards points.

Rewards points will appear as a payment option during checkout at Amazon.com and can be claimed at any time and in any amount. In other words, no matter how much you have in rewards points available, you can apply the entire balance toward paying for your purchase before using your credit card or other payment method for the remainder of the transaction. 

That’s good news for consumers who have a hard time remembering to claim their rewards points. Although U.S. households earn an average of $622 in rewards points each year, most aren’t taking full advantage of those points. Approximately $205, or one-third of points earned, goes unused each year, according to a report from Colloquy, a loyalty program research firm.

In addition to no foreign-transaction fees, travelers who pay for trips with the card can enjoy additional perks like lost-luggage reimbursement of up to $3,000 and reimbursement of up to $100 per day for essentials like toiletries if your baggage is delayed by 6 hours or longer. 

Additional benefits like these are steadily becoming the norm among rewards cards, making it more important than ever to read the fine print before deciding to sign up for a new card.

Questions to Ask Yourself

Evaluate your current cards. If it has been a while since you applied for a new credit card, you may be due for an upgrade. Having too many cards can be difficult to manage, so it's generally better to focus on one card that rewards you for your current lifestyle. Use the Consumer Reports credit card comparison tool to find out whether replacing your current primary credit card would pay off in higher ongoing rewards points. There's no need to cancel that other card—keeping it open helps to maximize your credit score even if you aren't using it regularly anymore. 

Consider your shopping habits. Determining which rewards card is best for you is highly personal. If you're already a Prime member and a heavy Amazon user, this card could be a good addition to your wallet. "The benefits of the Amazon card are good, but not good enough to pay $99 per year for Amazon Prime if you are not a big shopper," advises financial planner Kathy Hauer.

Do the math before applying. Before deciding to apply for the new Amazon credit card, pull a copy of your 2016 spending report from your current primary card. You can usually find this online, or you can call the number on the back of your card for help. Add up your total spending at Amazon last year to see if the rewards points will be worth taking on a new credit card.

Make sure you can pay it off. Evaluate whether you are likely to carry a balance on a new credit card. Rewards credit cards typically charge a higher interest rate, and this one is no different. “Use rewards cards strategically, and don’t carry a balance or you’re going to wipe out your rewards,” Harzog says.

Which Card is Right for You?