GM Ready to Launch Credit Card : Finances: The auto maker enters the crowded field only a week after General Electric jumped in.
General Motors Corp. will enter the increasingly crowded credit card market this week with a new general-purpose card offering rebates to buyers of GM cars and trucks, company sources said Monday.
Television commercials for the new card were expected to begin Monday night, with a formal introduction scheduled for Wednesday in New York.
The GM move follows last week’s introduction by General Electric Co. of a new Mastercard offering consumers discounts and rebates at dozens of retailers. The GE Reward card will be marketed to consumers beginning this month by GE Capital Corp., the company’s finance subsidiary. Products and services sold by more than 15 companies, including Bullock’s department store, Hertz car rental company and Home Box Office cable network, can be purchased with GE credit card rebates.
Both GM and GE are trying to follow in the footsteps of American Telephone & Telegraph Co., whose 2-year-old Universal calling and credit card has proven highly successful at pulling business away from traditional bank-sponsored credit cards. Offered initially with no annual fee, the popularity of the Universal card has made AT&T; the nation’s fourth-largest credit card issuer.
Like the Universal card, GM’s version will be offered as a Visa or Mastercard and is expected to lure consumers with an offer of no annual fee for those who sign up in the first year.
In addition, consumers will be able to earn rebates of up to $500 on GM vehicles--in addition to existing incentives--by charging $10,000 on the new card. The rebate will be offered at a rate of $5 for every $100 charged.
Other details such as annual interest rate were unavailable for the GM card, which will be offered through Household Bank FSB, a unit of Household International Inc. in Prospect Heights, Ill. The average interest rate among major credit card issuers is now 17.7%.
Although GM is new to the credit card game, it certainly is no stranger to the consumer lending business. General Motors Acceptance Corp., GM’s consumer and dealer finance unit, is the nation’s largest finance company, with more than $100 billion in assets.
