Is the GM credit card really a good deal? There’s some fine print with the GM credit card application you should know about. Read this before you apply.


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.

Post-Bankruptcy
In the months (and even years) leading up to GM’s bankruptcy, many people had concerns about whether or not their credit card points would be valid once the company filed for Chapter 11. Fortunately, the points on the GM card were unaffected by the bankruptcy – as far as I know, they never even considered the idea of voiding them out. So the GM credit card has had an excellent track record both before, during, and after that major event.

Now that we have that out of the way, let’s continue with the review…

GM Credit Card Review
It’s important to note that the original GM card is different than today’s GM Flexible Earnings card, and we will discuss those differences in throughout this review. Ever since they phased out the original, it’s impossible for new cardmembers to apply for the old GM Card (which had better rewards). For now, those original cardmembers still enjoy the old rewards, but there’s no way for you to open a new account and get the old GM Card.

Type of Card:
MasterCard

Annual Fee:
There is no annual fee on GM credit cards.

Rewards:
In the 90’s, the GM Card used to offer a 5% rebate which could be used towards the purchase of a new vehicle. At the time, this was by far the best rewards credit card on the market. Unfortunately, as of a few years ago, they transitioned to the GM Flexible Earnings card, which offers a 3% rebate instead.

Here are the rewards on the current GM credit card:
  • 3% rebate on all purchases, which can be used towards the purchase of any eligible, new vehicle
- OR you can choose -
  • 1% cash back on all purchases in the form of a check (instead of the 3% rebate towards new GM vehicles)
The Fine Print on Rewards:
Although it’s not the 5% rebate once available, the 3% rebate is still pretty good. However, here’s the fine print that goes along with it…
Allowance
What is the maximum GM credit card redemption allowance? Well, on the original GM Card it was $3,000. But today, the GM Flexible Earnings has a cap of $2,000 or less (so you can use up to $2,000 on a new vehicle).

Eligible Vehicles
Although most GM vehicles are eligible, there are some exceptions. Some vehicles have restrictions on the amount of rebate you can use. For example, the Cadillac Escalade has a $1,500 cap at the time of this review. The Chevy Corvette, Aveo, Cobalt, Malibu, and Traverse had a $1,000 cap. Quite a few of their vehicles have caps below the standard $2,000 ceiling, so be sure and keep this in mind. The original GM Card members have more generous ceilings than this.

Employee Discount
The rewards on the standard GM credit card (GM Flexible Earnings) cannot be used in conjunction with an employee/supplier discount. They do offer a different credit card (GM Extended Family Card) which can be combined with the employee discount, but unfortunately this card only gives 1% on spending. Being that almost every card nowadays gives 1% in rewards, that’s nothing unique or special.
Interest Rate
This is probably not the best choice if you carry a balance. At the time of this credit card review, the interest rate is either 15.99%, 18.99%, or 22.90% (the one you get depends on your credit). Even the lowest of those is pretty high, so the General Motors credit card would be a very expensive way to carry a balance.

Conclusion
As mentioned, I was raised in Michigan and have family ties to General Motors, so it’s a company that’s very dear to my heart. The original GM Card from the 90’s (with 5% rewards) was an incredible credit card, but as mentioned, as of the past several years that’s impossible to get. If you still have that card, don’t ever cancel it because there’s no way you can get it again!

As far as their newer GM credit card – the Flexible Rewards card – it’s still a great credit card, but it’s a far cry from the original. It’s probably still a great choice for people who buy a new vehicle every two or three years, but because of the lower redemption allowances, some people may be left with more rewards than they can redeem. Of course they can always opt for the cash back if that happens, but doing so would only give them a 1% rebate on that spending.

How To Get a 5% Cashback Bonus (sponsored)
If the GM credit card isn't right for you, or you would like to have an additional option, then check out the Discover More card. It gives up to a full 5% cashback bonus on various rotating categories like home improvement, gas, restaurants, department stores, groceries, and others. Here's my full review of the no annual fee Discover More card

Last update Jan 2010