Reviews GM BuyPower card from Capital One review

GM BuyPower card from Capital One review

Published: September 26, 2017
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Ratings Policy
No Annual Fee Rating:
3.7 rating
3.7 rating
3.7 / 5
Rewards Value: 4.8
Annual Percentage Rate: 3.4
Rewards Flexibility: 2.7
Features: 3.0

In a nutshell:

For no annual fee, the Capital One GM BuyPower card gives you an extraordinarily high rewards rate; however, the rewards are meaningless if you aren’t in the market for a new car.

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Rewards Rate

  • 5% earnings on first $5,000 in purchases each year
  • 2% earnings after that

Sign-up Bonus
None

Annual Fee
$0

Average Yearly Rewards Value ($1,325 monthly spend)
$366

APR
13.9-23.9% (variable)

Rewards Redemption
Pros

  • Rewards don’t expire
  • Can combine rewards with other GM offers and incentives
  • No limit on 2 percent earnings

Cons

  • Rewards only apply to GM vehicle purchases and upgrades
  • List of eligible vehicles is limited
  • Can’t combine rewards with employee or supplier discounts

Other Notable Features: No foreign transaction fees, car rental insurance, concierge services, extended warranty, price protection, trip cancellation and interruption insurance

Rewards Rating:
3.3 rating
3.3 rating
3.3 / 5
Rewards Value: 3.8
Annual Percentage Rate: 3.3
Rewards Flexibility: 2.7
Features: 3.0

In a nutshell:

Few cards can beat the 2 percent rewards rate on Capital One’s GM BuyPower card, but the rewards only apply to the purchase of a new car.

Learn more about this card

Rewards Rate

  • 5% earnings on first $5,000 in purchases each year
  • 2% earnings after that

Sign-up Bonus
None

Annual Fee
$0

Average Yearly Rewards Value ($1,325 monthly spend)
$366

APR
13.9-23.9% (variable)

Rewards Redemption
Pros

  • Rewards don’t expire
  • Can combine rewards with other GM offers and incentives
  • No limit on 2 percent earnings

Cons

  • Rewards only apply to GM vehicle purchases and upgrades
  • List of eligible vehicles is limited
  • Can’t combine rewards with employee or supplier discounts

Other Notable Features: No foreign transaction fees, car rental insurance, concierge services, extended warranty, price protection, trip cancellation and interruption insurance

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The first thing you’ll notice about the BuyPower card from Capital One is a pair of very flashy numbers: 5 percent and 2 percent. The card promises 5 percent earnings on your first $5,000 in purchases in your first year of membership and unlimited 2 percent earnings on purchases after that.

A credit card with a 2 percent rate on general purchases is rare and highly sought after in the rewards card world, a category that includes a handful of premium travel rewards cards and a couple of cash back cards. For card users who are not interested in travel rewards and who want to avoid a card with an annual fee, the 2 percent rate on the BuyPower card may seem like a dazzling incentive, especially with the preliminary 5 percent bonus to give it some extra oomph.

There is, however, a very large catch with the BuyPower card: You can only apply the rewards to the purchase of a brand new GMC, Buick, Cadillac or Chevrolet vehicle. In other words, unless you are willing to stick to the BuyPower card’s list of eligible vehicles and are able to delay your purchase for a year or two so that you can accumulate credit card rewards, the card’s rewards program will have little value to you.

High rewards rate for no annual fee
The BuyPower card offers a 2 percent rewards rate on all purchases across the board, with no limits on how much you can earn. This is an exceptionally high rewards rate matched by only a few other cards, most of which come with an annual fee.

While there are a couple of cash back cards on the market that offer a 2 percent cash back rate with no annual fee, in terms of overall earnings, the BuyPower card bests these cards by offering a 5 percent bonus rate on the first $5,000 in purchases every year. The bonus really adds up: If you max it out, you could earn $150 on top of what you would normally earn with a 2 percent rate.

However, if you are looking for redemption options beyond the purchase of a new vehicle, a 2 percent cash back card may still be your best bet.

Inflexible rewards program
The limited redemption options on the BuyPower card are a major drawback that, unfortunately, render it a poor value for most cardholders. While there are a few other co-branded automotive cards on the market that allow you to apply your rewards to merchandise and gift cards, the BuyPower card very strictly limits you to purchases and upgrades of new vehicles.

This makes the card practical for a very limited audience. New car purchases are not a common event and – even for cardholders who plan to purchase a new GMC car – many probably won’t plan their purchases far enough in advance to take advantage of the card’s high rewards rate.

On the bright side, the card does allow you to negotiate the price of the vehicle with the dealer and to combine your rewards with dealership offers and discounts (Note: Supplier and employee discounts are excluded).

A minor rebate in the grand scheme of things
When you consider the massive costs that come with the purchase of a new car, the BuyPower card’s rewards rate seems a little less impressive.

For example, suppose you sign up for the card and proceed to spend $1,325 per month on it for 12 months in preparation for the purchase of a Chevrolet Silverado by year’s end. If you add together the rewards from the initial 5 percent bonus rate and the regular 2 percent bonus rate, by the end of the year you’ll have accumulated $368 in rewards. The suggested retailer price of a 2017 Chevrolet Silverado 1500 is $27,585. The BuyPower card, in this scenario, will net you approximately a 1 percent rebate on your new car.

This is not the most exciting application of credit card rewards. However, as some consolation, you can combine your rewards with other discounts. If your main goal is to achieve the lowest price possible on your new GMC car, the card can give you a bit of a boost. Also, the rewards do apply to upgrades on your new car – perhaps you can use them to splurge on some leather seats.

Good travel and purchase perks
The BuyPower card does comes with some nice perks and travel benefits. There are no foreign transaction fees, which means you can use the card while traveling in foreign countries without racking up fees. The card is a World Elite MasterCard and affords many travel benefits, including car rental insurance and trip cancellation and interruption insurance. The card also comes with purchase protections, including extended warranty and price protection, providing a little extra security for purchases that you put on your card.

Reasons to get it:

  • You are very certain of purchasing a new GMC, Buick, Cadillac or Chevrolet vehicle in the near future.
  • You are looking for a card with a high rewards rate.
  • You are looking for a highly rewarding card that offers a good alternative to travel rewards.
  • You are looking for a no annual fee card with a great rewards rate.

How to use it:

  • This card requires advanced planning – you’ll need to know what kind of car you intend to purchase and ensure it’s on the list of eligible vehicles, and then allow a year or two of spending on the card to accumulate enough rewards to make a dent in the car’s price tag.
  • Plan to use this as your main card in order to build up rewards in a short time.
  • You can combine your BuyPower rewards with dealership offers and discounts to get a better price on your car.
  • Use your rewards as a down payment or to lower the purchase price of the vehicle.
  • You can also apply your rewards to vehicle upgrades, such as leather seats or floor mats.

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