GM BuyPower card from Capital One review

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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.

But reward redemption is quite limited with the BuyPower card. You can either apply your rewards to the purchase of a brand new GMC, Buick, Cadillac or Chevrolet vehicle, or, in a few specific cases, redeem rewards as a statement credit. To get the most use out of the card, however, you’ll need to be willing to stick to the BuyPower card’s list of eligible vehicles and delay your purchase for a year or two so that you can accumulate the needed rewards.

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.

Niche rewards program

The limited redemption options on the BuyPower card are a major drawback that, unfortunately, render it a poor value for most cardholders. You can either apply rewards to the purchase of a new car or get statement credits when you make qualifying auto-related purchases, including OnStar and Connected Services plans, SiriusXM subscriptions, customer-paid Certified Service, and parts and accessories purchased at authorized GMC, Buick, Cadillac and Chevrolet dealerships.

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. That said, if you already visit a GM dealership for oil changes, tire rotations and mechanical repairs like brake jobs and air conditioning service, the card could help offset some of your vehicle maintenance costs.

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.

Other benefits

The BuyPower card is a World Elite Mastercard, and therefore comes with plenty of benefits that make it a valuable option for frequent travelers.

• Lyft credits – If you take five Lyft rides in a month, you’ll automatically receive a $10 credit for your next ride.
• Movie ticket discounts – For tickets purchased through Fandango, you’ll receive $5 off future tickets for every two tickets you buy.
• Postmates discounts – A nice perk for foodies, you can receive $5 off purchases of $25 or more from Postmates made with your card.
• Free ShopRunner membership – When you enroll in your free ShopRunner membership, you’ll enjoy free, two-day shipping from dozens of online retailers.
• No foreign transaction fee – You can use your card freely when you travel abroad, as it doesn’t charge a foreign transaction fee.
• Car rental insurance – For car rentals booked and paid for with your card, you can receive secondary coverage in the case of damage or theft.
• Extended warranty – Extend eligible manufacturer’s warranties on purchases made with your card.
• Price protection – If you purchase an item with your card and find a lower price for the item within 120 days, you might be eligible to have the difference refunded.

To take advantage of these perks and protections, put all qualifying purchases on your card.

Why get the BuyPower card?

• You are very certain of purchasing a new GMC, Buick, Cadillac or Chevrolet vehicle in the near future.
• You want to chip away at some of your car maintenance costs.
• 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 the BuyPower card:

• 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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