Two percent of GM MasterCard holders have redeemed rebates for a General Motors car or truck, company officials reported.
Half of the 200,000 cardholders who redeemed their rebates did so in the first five months of this year.
It took 15 months after the card was launched for the first 100,000 cardholders to redeem rebates. To date, the company says more than 10 million consumers carry the GM Card in the United States.
GM officials said they were pleased, but not surprised, by the redemption level.
Can Double Rebate
"We don't really have a benchmark to go by," said Hank Weed, general marketing manager for the GM Card, "but we're not far off our expectation."
GM MasterCard holders earn a 5% rebate on purchases, up to $500 per account year, or $3,500 over seven years, toward a new Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac or GMC Truck.
Cardholders can double the rebate level when they purchase goods or services from six partners, including GM dealerships.
Redemption levels from a similar cobranded program from Citibank and the Ford Motor Co., were not available.
Rise in Car Sales Cited
Bruce Brittain, president of Brittain Associates, Inc., an Atlanta research firm, said GM may be benefiting from a wave of increased car sales in the United States this year. "If people are buying more cars, they will have more rebate activity," he said.
The car market is definitely stronger this year, Mr. Weed agreed. "GM has riden that risen wave as other car companies have."
A recent consumer survey conducted by Brittain Associates suggests GM cardholders buy cars sooner than they would if they did have the card. Based on a $325 average rebate amount on the GM card, Mr. Brittain estimates the program has cost about $65 million to date.
Averages Not Released
Mr. Weed said the company does not release average rebate numbers, but they were also at a level the company expected. "It's what drives people into the showrooms," he said.
Stephen Szekely, vice president of credit card research for PSI, a Tampa research firm, said the initial redemption level GM reached was from cardholders who had already planned to buy a car. "Now you're getting to the point where folks start seeing serious dollars there," Mr. Szekely said.
"A lot of people who got the cards [at the beginning] will start redeeming after two years."
