The review below is outdated and for reference purposes only.
The GM Card isn’t a newbie; it’s been around since 1992. That makes it one of the longest running credit cards in existence. Having been born and raised in Michigan, I have a close affinity for General Motors. In fact, my grandfather’s entire career was at the company and I have quite a few friends and family connected to the company in some shape or form.
And their credit card? Well during my childhood, it was my parent's primary piece of plastic. Back then, (in the 90's) you could redeem up to $3,000 worth of rewards for your new vehicle. Now, the program is quite different...
Compare the 3 cards available in 2013
Previously, there was only one version of the GM MasterCard offered thru HSBC. Now there are 3 versions thru a different bank. Here's what all of them have in common:
- No annual fee
- Rewards expire 7 years after the date you earn them
- There are no caps on the amount of rewards that can be earned.
This is my favorite because it earns 5% rewards. That's not just on special categories, but all purchases you make. However it comes with a big catch: there are "redemption allowances" which limit how much you can redeem per vehicle and you can't combine it with the GM employee or supplier discount.
With this card you have the option to choose either 3% rewards to use towards a new vehicle purchase -OR- 1% cash back. Like the GM credit card above, this one doesn't allow you to combine it with an employee or supplier discount. You're also limited in how much you can redeem per vehicle.
With this one you can use the GM employee or supplier discount in conjunction with your credit card rewards. But the catch is you're only earning a 1% rebate on your spending, whether you use that for a car or cash back. So basically, this can be thought of as being just a plain vanilla 1% cash back card.
The APRs on the GM cards are average, comparable to what you will find on many other reward cards.
Aside from that, the application doesn't list any other incentives or bonuses for signup.
GM's 0% balance transfer offer for 12 months is a nice touch, but if that's your goal then you will be better off with these 0% offers, some of them give the 0% intro for up to 18 months.
The Big Catch: Redemption Allowances
This card is a lot different than it was a decade ago. Now, they cap the amount you can redeem for a new vehicle. As of summer 2013 here is a list of the current caps for the 2013 model year. Please note these are subject to change at any time and probably before I have a chance to update this review again.
Chevy: Spark, Sonic (both sedan and hatchback)
Chevy: Cruze, Volt, Equinox Buick: Verano, Encore GMC: Terrain
Chevy: Camaro (coupe or convertible), Impala, Malibu and Malibu Eco, Traverse Buick: LaCrosse, Regal, Enclave GMC: Arcadia, Arcadia Denali Cadillac: ATS
Chevy: Avalanche, Silverado (1500, 2500HD, 3500HD) GMC: Sierra (1500, 1500 Denali, 2500HD, 2500 Denali, 3500HD, 3500 Denali) Cadillac: CTS (all versions), SRX Crossover
Chevy: Corvette (coupe or convertible), Suburban, Tahoe, Express Van GMC: Yukon (all versions), Savana Van Cadillac: Escalade (regular, hybrid, ESV, EXT)
Do You See The Problem Here?
Even though you can earn unlimited rewards, you're limited in how much you can redeem.
Considering that you might only buy a new vehicle once every 3-5 years (if not longer in this economy!) then it might be hard for you to actually use all of your rewards.
Think about it... let's say you spent $1,400 per month on your GM credit card. Over 4 years that's $67,200. If you take 5% of that, you're getting $3,360 to use towards a new vehicle. But even if you're buying one of their most expensive cars or trucks, the most you would be able to use is $3,000. Meanwhile for most people buying a more average-priced vehicle, you may only be able to use $1,000-$2,000 worth.
Credit Card vs. Employee Discount?
In this scenario the answer is obvious- skip their credit cards altogether! The 1% version isn't worth it and you will do far better with the employee/supplier discount.
You're better off if you just get a different 5% cash back credit card.