A good card, but it was once great
Written: Jan 18 '03
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Pros: Generous 5% rebate. Good account access via web.
Cons: Can only be used toward new GM vehicle. Redemption allowances now more complex, restrictive.
The Bottom Line: Can be a good choice if you’re buying a GM car in the next few years. But redemption allowances may trip you up when it comes time to buy.
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| technofan's Full Review: General Motors MasterCard (Household Bank) |
A mere shadow of it’s former self
When I first received my GM Card Gold Mastercard over ten years ago, the benefits were very generous. As I recall, the annual earnings cap was $1000, for a maximum of seven years. Earnings could be applied directly to the purchase or lease of a new GM vehicle and could be combined with any other discount or rebate. Sadly, this was scaled back to a $500 annual limit after a number of years.
Household bank now offers only the “new” GM Card to new applicants. Annual earnings, which are still a generous 5% of purchases, are no longer capped. However, the earnings amount you can apply to a new vehicle IS capped, with the limit tied to the make and model you chose. The GM Card assures members that they will always be able to redeem at least $1000 toward a “new model year introduction.” Typical redemption “allowances” range from $1500 to $2500 or so, depending on the make, model, and year of the vehicle purchased. See the GM Card website for redemption allowances on specific models.
Earnings on both the old and new card are valid for seven years. After seven years, the oldest points will expire first.
If you have the old Gold or Blue GM Card, should you convert to the new card? That probably depends on your current earnings and your time horizon for buying a new GM car. If you’re eager to earn as many points as possible in a few years, and apply it to a new car, it may be more rewarding to convert. If you tend to keep your cars a long time, and don’t plan to buy a new car for quite a while, you may prefer to keep the old card so you can earn and redeem as much as $3500.
Decent customer service, but their website is better
Customer service from Household bank is acceptable overall. I have not experienced any problems to date. But, the level and quality of service is not as polished and friendly as that of, say, American Express or Citibank.
Their website is quite good. You can review current and previous online statements, request a balance transfer or credit-line increase, set up email alerts, send a question to customer service, and even download transaction details for import into a money-management program. You can also register to pay your card statement online. However, this is through a third-party service called Checkfree.
My only real complaint about their online presence is the lack of a one-time-use card-number generator for use with online purchases. Several major card issues offer a computer program that does this.
Easy to redeem points – but it may weaken your negotiating position at the dealership
I found it very easy to redeem my GM Card earnings at a dealership when buying a new car. The salesperson simply called a special number to confirm and redeem my current earnings balance. The earnings amount was deducted from the purchase price of the vehicle, along with any other rebate, incentive, or discount that was agreed upon.
But in terms of negotiating your best deal, it would be best to claim these earnings AFTER any successful haggling with the salesperson. If you eagerly bring all your discounts and rebates to the table up front, it may make it more difficult to negotiate further. I suspect that the dealership gets reimbursed for the GM Card earnings, but the dealer may claim otherwise.
Such a small statement
The monthly account statement is perhaps the smallest and busiest paper statement of all the credit card statements I receive. Several years ago, Household bank made “improvements” to their statement format ‘to serve its customers better.” While the statement is legible, it’s much smaller than the old version, has a smaller font, and takes more effort to review when it arrives.
Danger: Falling restrictions ahead for some members
Starting in August 2003, cardholders will no longer be able to combine their GM Card earnings with GM Employee/Supplier discounts. While this probably affects only a small portion of the cardholder population, the impact is substantial for those affected.
GM will be offering a new credit card to these members. It will earn only a 1% rebate on all purchases, but will not be capped. This will allow these members to combine these new earnings with any other employee/supplier discounts at the time of purchase. As with all other GM cards, earnings will begin to expire after seven years.
Unfortunately, there is another pothole in this new road. When these members accept the offer to convert to the new card (it’s not mandatory), their current earnings will be converted to the new program at a rate of 5 to 1. This means that if a cardholder has $500 in earnings under the current program, it will be converted to $100 under the new GM card for employees/suppliers.
A bird in the hand is usually worth two in the bush
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Deferred redemption issues
While the 5% earnings ration is very generous for a rebate card, it does have its limitations. Aside from the obvious requirement to apply your earnings toward a new GM product, you cannot benefit from your earned points until you purchase a vehicle at some point in the future. With other rebate cards (gasoline, cash back, travel, etc), you often have the ability to redeem a small number of earned points toward a gift, hotel stay, etc. You may prefer to have the option to apply your earnings (probably at 1% of purchases) toward a variety of awards or merchandise, rather than bank on buying new GM vehicle years into the future.
Proceed with caution
I would recommend the GM Card to those consumers that are highly confident they will buy a NEW GM car in the next several years. You could earn several thousand dollars of earnings in a few years. With some luck, the make and model you want to buy will be associated with a generous redemption allowance.
If you are not sure which brand of vehicle you might buy in the future, or if you are even considering a used car, you may be better off with another rebate card.
If a new GM vehicle purchase is still years away, you may find that you would earn more than you could redeem when it comes time to make that purchase.
GM may also make additional changes (reductions) to this rewards program. They’ve done it several times already, and may further restrict how you can redeem your earnings at the dealership.
Recommended:
Yes
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Epinions.com ID:
technofan
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Reviews written: 8
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