I enjoy the 5% cash-back perk that Amazon offers their Prime credit card users on their website. It is just really nice when I have accumulated enough points to buy something without paying directly from my pocket. After doing that for some time, however, it dawned on me that I was making a mistake spending the points that way. Therefore, I have stopped using Amazon rewards for purchases.
When you shop with an Amazon Prime credit card, you get 5% back and that is nothing to scoff at. Unfortunately, I have learned that when you decide you want to use the points/cash for a purchase, you are forfeiting the 5% on that purchase because you are no longer using the Credit card. So, what I have been doing instead is cash-out the reward as a deposit to my bank account or elect to apply it to my credit card balance, and use only the card for any additional purchases.
An important note is that whatever my tax rate is on Amazon, that 5% reward lowers the taxes I am paying by said 5% and that adds up.
This is the approach I take with all of the credit cards I use, but please remember again that it is important that I do not carry a balance because, among other reasons, it would offset these types of benefits of using credit cards. Another important note is that I do not buy items just to get rewards, but rather, I get rewards for items I was going to buy regardless of rewards.