The BuyPower Card (formerly known as the GM Card) used to have some red tape that made it a less-than-stellar offer. But, after being taken over by Capital One (which bought HSBC’s U.S. credit card business in 2012), the card underwent some major changes in late-2013 that make it a better option for anyone interested in focusing their rewards on a new GM product.
So what’s changed?
The card still has no annual fee and allows you to earn back a percentage of your spending, which you can then put toward an eligible new GM vehicle (retail purchase or lease).
In 2016, you can earn:
- 5% back on the first $5,000 in purchases every year
- 2% back on all purchases the rest of the year without limit
Below are the major differences between the old GM Card and BuyPower Card:
BuyPower is now a World Elite MasterCard: That means it offers an array of additional benefits and protections beyond the perks offered by the issuer. Many of the World Elite MasterCard benefits are designed for travelers, and that’s fitting because the card (just like all Capital One cards) has no foreign transaction fees.
Here’s a run-down of some of them:
- Trip cancellation insurance: This coverage refunds any non-refundable purchases you’ve made for a trip (hotels, flights) if you have to cancel or end your trip early for a covered reason.
- Luxury Hotel & Resorts program: For hotels in MasterCard’s portfolio, get complimentary room upgrades, late check-out, early check-in and free breakfast (availability permitting)
- Discounts on limos: Get between 15 and 25 percent off on limo and chauffeured car services from participating companies.
- Flight upgrades: You get discounts for certain airlines and itineraries and, sometimes, even complimentary seat upgrades.
- Concierge service: Available 24/7, this service will help you with tasks and chores like finding hard-to-find items, plan travel and make reservations.
No more redemption limits: In the past, the GM Card had what were called “redemption allowances.” Only a certain amount of the rewards you earned could be used toward your car purchase. That ceiling was as low as $500 for some vehicles and went up to $3,000 for others.
The BuyPower Card has no such limits. You can redeem as many rewards as you earn, up to the full price of a new GM vehicle (if you’re so lucky).
Rewards do not expire: Previously, rewards expired seven years after they were earned. Coupled with the redemption allowances, this was a double hit for cardholders; if you maxed out your redemption allowance you would have to buy a new vehicle within seven years to take advantage of remaining rewards, otherwise they would be lost.
Now, rewards earned via the BuyPower Card never expire. So, even if you don’t plan on getting a new car for a while, you can simply bank your rewards as long as needed. This makes perfect sense for a long term, high value reward target like a new or used GM vehicle.
Cool new design: The previous traditional horizontal design of the original GM card has been rotated 90 degrees with a distinctive vertical design. The only other credit card on the market featuring this design ethic is the Virgin America card. The cobalt blue background is truly eye-catching and the silver MasterCard logo indicates that this is a special piece of plastic. Of course, you should choose a card based on more than good looks ? but this luckily this card has looks and substance.
Other GM cards
In addition to the BuyPower credit card, Capital One offers one more option for consumers: The GM Extended Family Card. With the regular card, you can’t redeem you rewards in combination with an employee or supplier discount. The Extended Family card allows you to do that, although it also decreases the rewards earnings ? you get a steady 1 percent back on all your purchases. The card does have a unique perk, though: If you don’t want to cash your rewards in for a car, you can get them as cash back in $50 increments.
For business owners, there’s another option: The GM Business Card. It gives 5 percent back on GM parts, accessories and service at GM dealers; 3 percent back at gas stations, restaurants and office supply stores and 1 percent back on everything else. It also offers a $100 statement credit if you spend $500 in the first three months. Rewards are good toward a new GM vehicle.
Is it a good deal for 2016?
There are a few other cards out there that offer a 5% cash back rebate structure on category spending that rotates each quarter (the Chase Freedom and some Discover it cards among them). In theory, you could get one of them and save up the cash back toward a new car. Yet, that 5 percent back is often tied to very specific and rotating categories, and the cash-back rate often falls to 1 percent after that. With the BuyPower card, you get 5 percent back on the first $5,000 you spend each year (on absolutely anything) and 2 percent after that. That’s a pretty strong weighted average cash back percentage for most people, but you would need to do the math for your own spending.
The card’s biggest potential drawback is that, as with many loyalty cards, the redemption options are pretty limited. The card is clearly meant for customers who have extreme brand loyalty to General Motors. Unless you have the Extended Family Card (which gives you the option for cash back), your points must be redeemed for anew GM vehicle. Change your mind about buying or leasing with GM? Your points are useless.
If you aren’t a fan of GM, you probably wouldn’t have this card in the first place, but make sure your budget can handle a new GM vehicle. Even if you spend $10,000 on the card per year, you’d have just about $1,750 after five years. That’s not enough to entirely cover the cost of a new vehicle, and probably not even the sales tax when you really crunch the numbers. So, if cost is a concern, you can certainly save money by forgoing the card altogether and buying a used car.
The bottom line: If you intend to buy a GM vehicle and nothing else will do, the BuyPower card can be an understandable choice, given the user-friendly changes to the program and a simple rewards structure that lets you stockpile cash back on all your purchases. With no more redemption ceilings and expiration dates on rewards, you can rack up enough points to get a significant discount on your dream car and wait until the right time to buy it. However, if you don’t anticipate sticking with GM for years to come, there are lots more flexible rewards cards on the market that will get you a nice return on your spending over the long term.
Updated June 2016