The GM MasterCard issued by Capital One can be an excellent way to earn money toward your next General Motors vehicle. With an impressive reward rate, low interest and fees, and the benefits of a World MasterCard, this can be a valuable credit card product -- if you plan on buying a GM vehicle in the future.
One of the best rewards rates in the business
The GM MasterCard comes in three varieties -- for consumers, GM employees, and businesses -- and I'm going to focus on the product intended for general consumers, known as the BuyPower card.
The card allows a generous 5% earnings rate on the first $5,000 in purchases each year, and 2% on all purchases beyond that threshold. The earnings never expire, nor is there a limit to the amount of earnings you can accumulate. In theory, you could get a free Corvette if you spend enough. The BuyPower card from Capital One also has no annual fee, comes with 0% APR for the first 12 months, and has variable interest rates as low as 11.9% afterwards.
The only catch is that your earnings can only be used for one purpose -- toward the purchase of a new GM vehicle (Chevrolet, Buick, GMC, or Cadillac).
However, for consumers who like GM vehicles, it's a no-brainer. This is a fixed, permanent rewards rate that other credit cards simply don't match. If you use the card for $10,000 in spending per year for five years, you'll have $1,750 to use toward your next GM vehicle. To see how your personal spending could add up, GM provides a calculator to estimate your reward potential.
The procedure for redeeming earnings is pretty straightforward. Simply decide on a new GM vehicle, and then negotiate your best price with the dealer. Once you've agreed on a price, let the dealer know you're a GM MasterCard holder and would like to apply your earnings toward the purchase price.
World MasterCard benefits
On top of the earnings, the BuyPower card from Capital One is a World Elite MasterCard, which comes with its own array of benefits. Just to name a few, cardholders get:
- Price protection: If you find a lower price on an item within 120 days, you could be refunded the difference.
- Extended warranty: You can get double manufacturers' warranties on many items (though not vehicles).
- Exclusive VIP travel benefits, such as complementary upgrades at certain hotels.
- Concierge service to assist with dinner reservations, event tickets, gifts, and more.
- Trip cancellation insurance.
- Airport concierge service.
Most World Elite MasterCard products come with an annual fee attached, such as the offerings from Ameriprise ($150 annual fee), Virgin Atlantic ($90), or Barclays ($89). So this list of benefits alone may make the BuyPower Card from Capital One appealing to you, even if you aren't planning on purchasing a GM vehicle anytime soon.
The bottom line
If you plan to buy a GM vehicle anytime in the future, the BuyPower Card from Capital One offers an unbeatable reward rate and benefits that are hard to find in a no-annual-fee credit card. With a straightforward redemption process, no limits on earnings, and no benefits expiration, this card ranks up there with the best rewards credit cards in the business.
Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends General Motors and MasterCard. The Motley Fool owns shares of Capital One Financial. and MasterCard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.