GM enters credit card market

NEW YORK - General Motors is moving into the lucrative credit card business in North America with the launch of its own Mastercard which will also allow users to qualify for savings on GM cars, writes Michael Marray.

GM is launching the card with an advertising campaign and a direct mail-out to 30 million Americans. For each dollars 1,000 spent with the GM Mastercard, customers will qualify for a dollars 50 rebate on any new GM vehicle, including Chevrolet, Pontiac and Cadillac models.

A maximum of dollars 500 per year can be gained, and accrued over a maximum of seven years, meaning that heavy users of credit cards could save dollars 3,500 on a new car purchase after seven years.

Traditional credit card issuers such as banks are facing increasingly fierce competition from new card issuers, but the GM move is also aimed at winning brand loyalty from rival car manufacturers such as Ford and Chrysler. Card users will also qualify for benefits from other companies linked into the programme.