Should I Get a Credit Card From a Car Company?

(BMW of North America, LLC)

You’ve seen the ads: For every dollar you spend on a credit card, you’re that much closer to your dream car. Do credit cards from car manufacturers get you the best deal on a new car? Some manufacturer-branded credit cards provide great benefits, but others are trounced by more traditional card programs.

While it may be cool to flash that BMW or Mercedes credit card at lunch with your coworkers, you may be better off with a card from Costco, Target, or a large national credit card issuer such as Chase or Citibank.

Most Automotive Credit Cards Aren’t Really From a Car Company

Most automotive-branded credit cards aren't actually offered, managed, or supported by the automaker. These cards – called affinity cards – are typically backed by large banks. The Lexus Pursuits Visa, for example, is a product of Comenity Capital Bank. General Motors' BuyPower card comes from megabank Capital One.

Of the manufacturer-branded cards that we researched, only the BMW and Mini cards are offered by banks affiliated with the automakers.

Before you jump into any credit card program, you’ll want to do some research into the company behind the card. Does it have Better Business Bureau complaints? How do websites like U.S. News & World Report Money rate its programs and practices?

Balancing the Perks and Prices of Car-Company Credit Cards

When you evaluate a credit card, you have to take your buying habits into account. Are there several thirsty cars in your family that require frequent trips to the gas station? If so, you’ll want to find a rewards card that gives you a big return on fuel purchases. Do you frequently travel on one airline? You may get more benefits with the frequent flier miles and travel perks of an airline credit card than what an automotive card could supply.

If you don't use credit cards very much, avoid cards with a high annual fee, as you'll rarely earn enough points or perks to overcome the cost. If you carry a balance, you'll want to look for a card with a zero percent or low interest rate on purchases, such as the BMW or Mini credit cards.

Every credit card offer has something called a "Schumer Box," named for U.S. Senator Chuck Schumer, who was instrumental in passing the federal Truth in Lending Act. The box clearly states the card’s interest rates, annual fees, and finance charges.

Unsure of what your next new car will be? You may want to skip manufacturer-branded cards altogether to avoid sacrificing hundreds of potential rewards dollars if your allegiance switches to a different carmaker.

To help you find the automotive credit card that fits your needs, we’ve detailed each card’s offerings below.

[Read: How to Buy a Car]

General Motors BuyPower Card

Benefits:

Five percent earnings on your first $5,000 spent in a year, with 2 percent on all purchases after that. Earnings can be put toward the purchase of a Chevrolet, Cadillac, GMC, or Buick.

Earnings don’t expire. Cardholders also receive World Elite MasterCard benefits, which include extended warranties on some purchases, price protection, travel accident insurance, trip cancellation insurance, rental car insurance, and travel assistance services.

Drawbacks:

Earnings can only be used for the purchase of GM vehicles. It’s hard to gain huge rewards quickly; you would have to spend $5,000 with the card to get a $250 discount.

Card Type:

World Elite MasterCard

Issuer:

Capital One

Annual Fee:

No annual fee

Interest Rates:

Zero percent introductory rate for one year, then 13.65 to 23.65 percent variable APR based on creditworthiness. Penalty APR 30.15 percent.

Also Available:

GM Extended Family Card, BuyPower Business Card

Contact:

BuyPowerCard.com

[Read: What to Do After You Buy a Car]

Lexus Pursuits Visa

Benefits:

Point-based rewards system with 5,000 points awarded when you spend $500 outside of Lexus dealerships in the first 90 days you have the card. Earn five points for every dollar spent at Lexus dealerships and two points on gas, dining, and entertainment purchases. Earn one point per dollar spent on all other purchases at Visa merchants.

Points can be redeemed for Lexus vehicle purchases and leases, plus service, parts, accessories, travel experiences, gift cards, and statement credits. Points do not expire. For the purposes of redemption, each point equals $0.01.

Drawbacks:

Points can only be used for purchases at Lexus dealerships. If you decide to buy a vehicle from another brand, your accumulated points are only valuable if you use them for statement credits to offset other purchases. The card is a basic Visa card with no notable enhanced customer benefits.

While your first $50 in rewards will come as soon as you spend $500 outside of Lexus dealerships, additional rewards will come much more slowly. For example, you’ll have to spend $50 on gas to accrue a $1 reward. Opt for a Costco Visa card instead, and you’ll earn discounts on fuel purchases twice as fast.

Card Type:

Visa

Issuer:

Comenity Capital Bank

Annual Fee:

No annual fee

Interest Rates:

Zero percent introductory rate for six months, then 14.74 to 23.74 percent variable APR based on creditworthiness. APR may vary with market rates based on the Prime Rate.

Contact:

LexusPursuitsVisa.com

[Read: Can I Buy a Car With a Credit Card?]

BMW Signature Card

Benefits:

BMW offers three tiers of Visa cards, with the BMW Signature Card as their middle offering. Cardholders receive four points per dollar spent at BMW centers, two points per dollar spent on fuel, and one point for all other purchases.

Points can be redeemed for exclusive BMW Rewards, including travel and Get Away Rewards, lease and finance credits, and BMW Center Rewards. If you pay with your Visa card, you’ll also receive 20 percent off of the BMW Performance Driving School. The driving school benefit alone can make up for much of the $75 annual fee.

Unless BMW is offering a special incentive program, points are generally worth $0.01 toward eligible purchases.

Visa Signature cards include a number of perks, including roadside assistance, lost luggage reimbursement, travel and emergency assistance services, auto rental collision damage waiver, purchase warranty extensions, and an annual year-end purchase summary.

Drawbacks:

Points can only be used forcertain items through the BMW rewards redemption site or BMW Centers. Information on how to claim rewards and their worth is tough to come by on the company's website, which makes the card difficult to compare with others.

Typical purchases only receive the equivalent of one percent back toward most rewards. There are other cards on the market with much stronger cash back programs.

Card Type:

Visa Signature

Issuer:

BMW Bank of North America

Annual Fee:

$75

Interest Rates:

Zero percent introductory rate for 15 months, then 13.99 to 24.99 percent variable APR based on creditworthiness. APR may vary with market rates based on the Prime Rate. Penalty APR 29.99 percent.

Also Available:

BMW Card, BMW Ultimate Card

Contact:

MyBMWCard.com

[Read: How to Finance a Car}

Fiat Chrysler Automobiles MasterCard

2017 Chrysler Pacifica

(Fiat Chrysler Automobiles)
Benefits:

Cardholders earn three points per dollar spent at FCA-brand dealerships (Dodge, Chrysler, Jeep, Ram, and Mopar parts). Travel purchases earn two points per dollar, and other purchases earn one point per dollar.

The FCA MasterCard has one of the most generous redemption programs of any automotive-branded credit card. Not only can you redeem points toward the purchase of a Chrysler, Dodge, Jeep, or Ram vehicle, but you can spend them in a number of other ways, including statement credits that are like getting cash back toward other purchases.

Awards can also be used for vehicle servicing, donated to more than 250 charities, used for domestic and international travel (airline tickets, car rentals, and hotels), and exchanged for products or gift cards. Cardholders receive benefits including price protection, travel accident insurance, and the ability to look at their FICO scores.

Drawbacks:

If you elect to buy or lease a non-FCA vehicle, your points can’t go toward the purchase of a car.Points expire seven years after you earn them. The lowest interest rate charged from customers with the best credit is significantly higher than that of other cards.

Card Type:

MasterCard

Issuer:

First Bankcard, a division of First National Bank of Omaha

Annual Fee:

No annual fee

Interest Rates:

Zero percent introductory rate for the first six billing cycles, then 19.24 percent. APR may vary with market rates based on the Prime Rate. No penalty interest rate.

Also Available:

Small Business Card

Contact:

FCAMastercard.com

[Read: New Car Deals]

Toyota Card

Benefits:

The Toyota Credit Card mirrors the benefits of the Lexus Pursuits Visa.Earn five points for every dollar spent at Toyota dealerships and two points for every dollar on gas, dining, and entertainment purchases. Earn one point for all other purchases at Visa merchants. You’ll receive 5,000 bonus points when you charge $500 on the card outside of Toyota dealerships during the first six months you have the card.

Points can be redeemed for Toyota vehicle purchases and leases, plus service, parts, accessories, travel experiences, gift cards, and statement credits. Points do not expire. For the purposes of redemption, each point equals $0.01. The ability to use rewards for statement credits is a huge plus if you decide to buy a car that’s not a Toyota.

Drawbacks:

Unless you spend a lot of money at Toyota dealerships, there are faster ways to earn rewards with other credit cards. The card is a basic Visa card, with few additional benefits.

Card Type:

Visa

Issuer:

Comenity Capital Bank

Annual Fee:

No annual fee

Interest Rates:

Zero percent introductory rate for six months, then 14.74 to 23.74 percent variable APR based on creditworthiness. APR may vary with market rates based on the Prime Rate.

Contact:

ToyotaRewardsCreditCard.com

[Read:Repairing Your Credit: 7 Steps to Take so You Can Get a Car Lease]

Mercedes-Benz Credit Card

Benefits:

The Mercedes-Benz Credit Card comes with a host of benefits that can help offset its higher-than-average annual fee. If you make $1,000 in purchases in the first three months you have the card, you'll receive 10,000 membership rewards points.

Cardholders receive five points for every dollar spent on select Mercedes-Benz purchases, three points for every dollar spent on fuel, two points for restaurant dining, and one point per dollar on other purchases.

Spending $5,000 on the card during the year will earn you a $500 certificate toward the lease or purchase of a Mercedes-Benz vehicle. Renew the card each year, and you will receive a $50 certificate that you can use for Mercedes accessories.

Points are part of the American Express Membership Rewards system and can be used for any eligible purchase or statement credit through that program. The card also allows you to have 1,000 excess miles on leased vehicles with no extra fee at the conclusion of the lease.

The card includes a plethora of additional shopping, entertainment, travel, rental car insurance, and roadside assistance features.

Drawbacks:

High annual fee and2.7 percent foreign transaction fee.

Card Type:

American Express

Issuer:

American Express Company

Annual Fee:

$95

Interest Rates:

Zero percent introductory rate for six months, then 16.24 percent. APR may vary with market rates based on the Prime Rate. Penalty APR 29.99 percent.

Also Available:

Platinum Card from American Express Exclusively for Mercedes-Benz

Contact:

AmericanExpress.com/us/credit-cards/card/Mercedes-Benz

[Read: How to Choose the Right Car for You]

Ford Credit Card

Benefits:

The Ford Credit Card is intended for use by Ford service customers only. It is not a Visa, MasterCard, or American Express card that can be used at a variety of merchants.Ford occasionally offers special deals such as a $25 rebate by gift card if you spend $250 or more on the card.

Drawbacks:

The Ford Credit Card is a throwback to the time when you had to have a credit card for each company you did business with. It does not work anywhere other than Ford service facilities. It does not provide points, cash back, or a car-buying program outside of occasional special offers.

Compared to many of the cash back cards available in the market, the Ford Credit Card simply doesn’t make sense for most credit card users.

Card Type:

Ford Motor Company Credit Card

Issuer:

Citigroup Inc.

Annual Fee:

No annual fee

Interest Rates:

Zero percent interest on purchases of up to $199 if paid in full within six months. Zero percent interest on purchase of up to $499 if paid in full within one year. Current interest rate is 29.74 percent but is variable based on benchmark interest rates.

Contact:

Must apply at dealership

[Read: How to Negotiate the Price of a Car]

Infiniti Signature Visa

Benefits:

Infiniti recently launched its credit card program with a pair of no-fee Visa cards. If you qualify, you’ll want to opt for the Infiniti Signature Visa, as it offers the full array of Visa Signature benefits without an annual fee.

The card features a points program, with five points earned per dollar at Infiniti retailers and gas stations. That’s more than double the rewards that some cards offer for fuel. You’ll also earn three points per dollar at restaurants and one point per dollar for all other Visa purchases.

Points can be put toward the purchase or lease of a certified pre-owned or new Infiniti vehicle, an automotive service, or accessories. They can also be added as a statement credit (up to $300 per year). Each point is equivalent to $0.01 toward Infiniti products and services.

Drawbacks:

The program does not allow for purchases of travel services. There’s no bonus for travel expenses like you’ll find with some other programs. If you have a large point balance, you can only redeem up to $300 per year as statement credits.

Card Type:

Visa Signature

Issuer:

Synchrony Financial

Annual Fee:

No annual fee

Interest Rates:

17.99 or 23.99 percent at account opening based on creditworthiness. APR will vary with market rates based on the Prime Rate.

Also Available:

Infiniti Visa Card

Contact:

Credit.syf.com/Infiniti

[Read: New Car Lease Deals]

The Mini Card

Mini Cooper

(BMW of North America, LLC)
Benefits:

The Mini Card can be customized with an image of the car you own or the Mini that you dream of owning.

Cardholders earn Mini Motoring Points on various purchases. Most purchases earn one point per dollar, but purchases at Mini dealers and on motoring expenses (such as gas and tolls) earn two points per dollar. Five thousand Mini Motoring Points equals $50 in Mini Motoring Rewards. Rewards can be used toward the purchase or lease of a Mini vehicle, toward excess wear charges at the end of a lease, toward the purchase of additional allowable lease miles, for service and repairs at the Mini dealership, and for Mini Motoring Gear.

In addition, Mini Motoring Rewards can help pay for exclusive Mini experiences, Visa prepaid cards that can be used anywhere, and donations to charity.

Drawbacks:

Mini Motoring Points will accrue slower than the more generous cash back of other cards on the market. Some cards, including the Costco Visa and Infiniti Visa, offer double or more cash back on the purchase of fuel.

Card Type:

Visa

Issuer:

BMW Bank of North America

Annual Fee:

No annual fee

Interest Rates:

Zero percent introductory rate for 15 months, then 13.99 to 24.99 percent variable APR based on creditworthiness. APR may vary with market rates based on the Prime Rate. Penalty APR 29.99 percent.

Also Available:

Mini Platinum Visa Card

Contact:

4MyMiniCard.com

[Read: Should You Buy a Used Rental Car?]

Volkswagen Credit Card

Benefits:

Like the Ford credit card, the Volkswagen Service Credit Card is intended for service customers only.There are occasional special offers, such as the current one that awards customers with a $25 Visa prepaid card when they make purchases of more than $250 on the card.

Drawbacks:

The card can only be used at Volkswagen service facilities, and there's no rewards program included. There are few reasons to put this card in your wallet, as its benefits can easily be eclipsed by the hundreds of Visa, MasterCard, Discover, and American Express cards available to consumers.

Card Type:

Volkswagen Service Credit Card

Issuer:

Citigroup Inc.

Annual Fee:

No annual fee

Interest Rates:

Zero percent interest on purchase of $200 or more if paid in full within six months. Current interest rate is 29.74 percent but is variable based on benchmark interest rates.

Contact:

Must apply at dealer

[Read: Used Car Deals]

More Shopping Resources from U.S. News & World Report

When you’re shopping for a car, the best way to save money is to arm yourself with information. Start on your journey to finding the perfect ride with our new car rankings and comparison tools, where you can see how vehicles stack up against one another.

We offer advice on how to buy a car and how to finance a car, but you can also save thousands of dollars by visiting our new car deals and lease deals pages to find the hottest manufacturer incentives.

Before you head to the dealer, use our Best Price Program, where we work with local dealers to find you guaranteed savings off MSRP. Buyers save an average of $3,279 off the sticker price with our program.