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The GM Rewards Credit Card Is Back

Several auto manufacturers offer co-branded reward credit cards.The General Motors rewards credit card – now under a different name and with a different bank issuer – is back in its third formulation.

While I can’t say it’s “better than ever,” the new version – called the BuyPower Card from Capital One – is much better than the previous version and still pretty generous, if not as good as the original.

GM introduced its original rewards card back in 1992. You could earn 5% back toward the purchase of a new GM vehicle, but the automaker later discontinued it, probably because it was overly generous.

A few years ago, HSBC Bank “totally re-engineered” the card, although it was a watered-down version of the original. You earned only 3% back on purchases, not 5%, but only if you later redeemed your rewards for a new GM vehicle.

If you didn’t want a car or later changed your mind, you earned only 1% back, and you had to earn a minimum of $100 in rewards before you could redeem them.

There were other drawbacks. There were limits on the amount of rewards you could redeem for a new car, depending on the make and model you wanted. Plus, the rewards dollars expired after seven years.

Now Capital One has introduced the BuyPower Card.

Cost of financing with the BuyPower Card

Intro interest rate Standard APR Average APR
0% for 12 months 11.9%-19.9% 15.03%

One of the best things about the new card is its simplicity, although the rewards are very good, too.

You earn 5% back on the first $5,000 in purchases every year. After that, you earn an unlimited 2% on everything else – not just groceries or restaurants or gasoline.

And there are no rotating categories, no limits on how much you can earn or redeem, your rewards don’t expire and there’s no annual fee.

Rewards dollars can be redeemed for a new Chevrolet, Buick, GMC or Cadillac vehicle.

Just go into a GM dealership, negotiate the best price you can on the car you want, then tell the dealer you want to use your rewards dollars, which will be deducted from the purchase price.

I had the original GM Card way back when, and after several years my family earned enough rewards to take several thousand dollars off the price of the car we bought. The BuyPower Card looks like it can do the same.

Let’s say you spend $12,000 a year on the card, or $1,000 a month – not unreasonable given all the groceries, gas and other purchases a typical household makes.

You’d earn $250 on the first $5,000 of spending, then another $140 on the other $7,000, for a total of $390 a year. After five years, you’d be able to take nearly $2,000 off the price of the vehicle, enough for a big down payment, or more, depending on how heavily you use the card.

That’s in addition to other discounts GM may offer at the time of purchase.

Compare that to Capital One’s signature Quicksilver cash rewards credit card, one of the best cash-back cards around. You earn an unlimited 1.5% cash back on all your purchases. With that card, you’d earn $180 a year on $12,000 of spending, a lot less than the BuyPower card.

The BuyPower card offers a 0% introductory APR for the first 12 months. After that, APRs range from 11.9% to 19.9%, based on your creditworthiness.

Compare this credit card with the cash back credit card offers in our database.

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