Amazon's (AMZN) - Get Report improved credit card rewards program could be trouble for Costco (COST) - Get Report .

The e-commerce giant announced Wednesday a Visa credit card that offers Prime members 5% cash back on all purchases. Costco's Visa Anywhere cards, issued by Citigroup (C) - Get Report , offer just 2% cash back on Costco purchases.

But Costco's cards do offer better incentives for gas, restaurants and travel purchases than do Amazon's.

Costco grants 4% back on gas, 3% back on restaurant and eligible travel purchases and 1% back on other purchases. Amazon's cards, issued by JPMorgan Chase (JPM) - Get Report , will grant 2% back at restaurants, gas stations and drugstores and 1% back on other purchases, the companies said in a joint statement.

Neither of the cards have annual membership fees.

About 8.5 million of Costco's 87 million members had signed up for the Visa Anywhere cards as of the fiscal 2017 first quarter, CFO Richard Galanti said on a conference call at the time.

Amazon doesn't disclose Prime membership figures, but estimates range as high as 69 million. Every Prime member who held Amazon's previous credit card will automatically be upgraded to a Prime Rewards Visa Card.

Costco's card is "great" for "driving member value and sales over the next years and of course lowering our effective merchant fees related to the new program," Galanti said on the company's most recent earnings conference call. 

Last year, Costco ended its longstanding partnership with American Express (AXP) - Get Report in favor of the Visa Anywhere cards' increased cash back rewards and lower merchant fees.

Oppenheimer estimates that the card's sign-up bounties and revenue from outside spending could increase Costco's top line between $20 million and $40 million and add between 5 and 15 basis points to gross margins in each of the next three quarters, according to a note issued yesterday.

The firm estimates potential savings of $70 million in interchange fees in the fiscal 2017 first quarter. 

Amazon's new credit card comes as the company is projected to surpass Costco in annual revenue for the first time ever this year. FactSet analysts are looking for $137 billion in sales from Amazon for fiscal 2016, while Costco reported $119 billion for the year.

Back in 2010, Amazon's annual revenue of $34 billion was less than half of Costco's.

Costco stock has gained almost $10 over the past 12 months, while Amazon stock has tacked on more than $200.

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