My GM Rewards Card Review: Revved-up Yet Inflexible Rewards

Buying or leasing a car is a huge financial undertaking for many. And with high car prices come high car-maintenance costs. Rewards from the My GM Rewards Card™ can help lower some of those car-related expenses.

The $0-annual-fee card, issued by Goldman Sachs, earns impressive rewards for General Motors Co. purchases as well as everyday spending. Those rewards, however, are only valuable toward GM-specific costs. This means that if you don't have your eyes set on a GM car or don’t already drive one, you’ll want to consider hitching a ride with a more flexible general cash back card instead.

» MORE: NerdWallet's best credit cards for car repairs

My GM Rewards Card™: The basics

Card type: Rewards.

Annual fee: $0.

Rewards:

• 7 points per dollar spent on eligible purchases at GM.

• 4 points per dollar spent everywhere else.

Eligible GM purchases include GM Certified Service, parts and accessories purchased at GM dealerships or online, as well as some OnStar and Connected Services plans.

Redemption:

Points are worth a penny each when redeemed for GM purchases and do not expire as long as the account is open. Redemption options include:

• Redeem points toward the purchase or lease of an eligible new GM vehicle. For this option, there's no limit to the number of points you can redeem, but you must confirm the dealership participates in the My GM rewards program.

• Redeem up to $1,000 worth of points per calendar year toward the purchase of a certified pre-owned Chevrolet, Buick, GMC or Cadillac vehicle.

• Redeem for non-vehicle GM purchases, within 365 days of making the purchase. This includes GM certified service and purchases of car parts and accessories at GM dealerships, most OnStar or Connected Services plans, and SiriusXM subscriptions, as well as Chevrolet, Buick, GMC and Cadillac protection plans.

• Redeem up to $250 worth of points per calendar year toward gift cards from eligible stores and restaurants. However, when you redeem points this way, they’re only worth a quarter of a cent each.

Interest rate: 0% intro APR on Purchases for 12 months, and then the ongoing APR of 19.74%-29.74% Variable APR based on creditworthiness.

Special offers for new cardholders

New card members can earn the following bonus after approval: Get 15,000 bonus points after you spend $1,000 in your first three months. At a penny per point, this welcome offer is worth $150 toward GM-related purchases (not gift cards), which is a decent amount for a $0-annual fee card but might not go very far in covering certain car-related expenses.

There's also an introductory APR promotion that new cardholders are entitled to: 0% intro APR on Purchases for 12 months, and then the ongoing APR of 19.74%-29.74% Variable APR based on creditworthiness.

This introductory interest-free period can be valuable for financing a major car repair or car part. But if a break from interest is what you’re mainly after, there are cards that offer much longer intro 0% APR periods, like the Wells Fargo Reflect® Card. It features a 0% intro APR on Purchases for 21 months from account opening and 0% intro APR on Balance Transfers for 21 months from account opening on qualifying balance transfers, and then the ongoing APR of 17.99%-29.99% Variable APR. That card doesn’t come with any ongoing rewards, however, so once the promotional period ends, it won’t offer much long-term value.

» MORE: NerdWallet's best credit card bonuses for new cardholders

It offers a high rewards rate

The card earns 7 points per dollar spent on eligible GM purchases and 4 points per dollar spent everywhere else. Eligible GM purchases include GM Certified Service, parts and accessories purchased at GM dealerships or online, as well as some OnStar and Connected Services plans.

While cardholders earn the highest rate for GM-rated purchases only, they’ll still earn an impressive 4 points per dollar on all other spending. Earning 2 points per dollar (or 2%) back on every purchase is strong and considered the industry flat-rate standard. But this card earns 4x (4%), which is double the norm. That means that $1,000 spent on the card for everyday purchases earns $40 in points toward GM purchases.

Because you’re earning such a high rate on all of your spending, it’s easy to rack up points. But remember, those points can be hard to use if you're not in the market for a GM vehicle, or currently driving one (see below).

» MORE: NerdWallet's best rewards cards

Automatic Gold status

When you’re approved for the My GM Rewards Card™, you’ll get automatic Gold Tier status, the second level of GM’s rewards loyalty program, which typically requires a three-year spend minimum of $45,000 on GM purchases.

Gold Tier members can receive a $100 statement credit when they spend $1,500 on gas with their card in a calendar year. Alternatively, if you drive an electric car, you can receive a $100 statement credit when you use your card to pay for six electric bills between January and December. (The electric bill credit is only available to electric vehicle drivers).

Every calendar year, Gold Tier status gives cardholders a $50 allowance when they use their My GM Rewards Card™ for car detailing at a participating GM dealer.

You're tied to the dealership

While there are several redemption options you can choose from, the road bump here is that they are strictly GM-specific.

If you're looking for a new GM vehicle, you can use an unlimited number of points toward your purchase. That could be a great way to put some money back in your pocket on that big purchase. Just be sure to do the math when determining whether to buy a new or used vehicle.

However, if you're in the market for a used GM vehicle, you can only use up to $1,000 in points toward that purchase per calendar year.

As with all store or brand-specific points, the biggest problem is your inability to shop around. If your heart is set on a GM vehicle, this card could be a boon. But it locks you into the GM ecosystem and reduces your options for buying a vehicle or having service done outside of a dealership.

» MORE: Auto repairs: Dealerships vs. independent mechanics

Redemptions outside GM offer poor value

Since points are only worth one-quarter of a cent when redeemed for store and restaurant gift cards, it would take 100,000 points to redeem for the annual $250 cap. That's not a very rewarding proposition.

If you're looking to offset costs on merchandise or dining, you'd be better off with a general rewards card that earns flexible points or cash back. The Chase Freedom Unlimited® has a $0-annual fee and earns 3% cash back on restaurant and drugstore purchases and 1.5% back on everything else. Chase's Ultimate Rewards® points are worth 1 cent each when redeemed for a statement credit or even for most gift cards; a much better value than offered by theMy GM Rewards Card™.

If you're a GM owner or looking to become one, this card could deserve a parking spot in your wallet. Its exceptional rewards-earning rate not only on eligible GM purchases but on everyday spending will help drive a nice pileup of rewards.If it's the only card you carry, your rewards will be locked into GM-specific redemptions. But there's nothing stopping you from carrying multiple cards to diversify your earnings. For example, you could consider adding a Blue Cash Preferred® Card from American Express to your mix to earn cash back on some of your purchases. It earns 6% cash back at U.S. supermarkets on up to $6,000 in spending per year, 6% back on select U.S. streaming subscriptions, 3% back on transit including U.S. gas stations and 1% back on everything else. Terms apply (see rates and fees). It comes with a fee, currently: $0 intro annual fee for the first year, then $95. But you'll make up for that cost in rewards if you spend at least $31 a week at the supermarket.

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