Pumped Up GM Card

Household Credit Services has picked up 650,000 new customers for the General Motors MasterCard in the year since re-introducing the card with new terms. Originally launched in 1992 the old edition still holds the record for most successful card launch. The card picked up one million customers in its first month and 2 million in the first 45 days. The winning proposition was the offer of rebate dollars as a reward to card usage, which could then be applied toward the purchase of a new GM automobile. But, card ownership began sliding in the late 1990s in the face of intense competition. Cardholders declined from a high of about 9.4 million to around 6 million.

Most of the decline was attributed to the old card's cap of $500 on the amount of rebates that could be earned in a year. Mary Kubitskey of General Motors told the American Banker "people would get to $500 and put their cards away." The cap is gone with the new GM card. Some popular features of the old card remain: there is no annual fee and cardholders earn 5% rebates on all purchases. Rebates must be used within 7 years, and the maximum redemption award is $3,500 toward any GM vehicle. Some popular vehicle models such as the Corvette have lower maximums, since the company doesn't need to provide the additional sales incentive to move the units. Some new features include the opportunity for smaller, non-vehicle redemptions toward items such as reduced rates at Ritz-Carlton Hotels or American Airlines tickets.