General Motors Co. said Monday that it is reducing by half the maximum annual rebate to its gold credit card customers.
Effective in 1997, holders of the gold GM card can earn only as much as those with standard cards: up to $500 a year for seven years, to a maximum of $3,500. But the gold card comes with a $39 annual fee, compared to no fee on the standard GM MasterCard.
"We benchmarked the gold card portion against other gold cards in the industry and found we're way out of the box," said Hank Weed, managing director of the GM Card.
"We're more generous than any other program," said Mr. Weed.
Household International has been issuing the cobranded MasterCard since September 1992, adding a gold version in February 1993. It has eight million accounts, 600,000 of them gold.
GM has been trying to scale back its gold card for some time, said James Accomando, a Fairfield, Conn., consultant.
"Tell me the benefits of having a gold card," he said, other than higher credit limit, premium benefits from MasterCard, and a lower interest rate.
In fact, GM offers holders of its gold cards tiered interest rates: prime plus 7.4% on balances of $2,500 or more and prime plus 10.4% for the rest, the same as other GM cardholders.
"They don't want to be in the gold card business," Mr. Accomando said. "They want to limit their exposure."
GM has sold or leased 975,000 cars and trucks to customers who have applied card rebates to the vehicles' cost.
