DETROIT - General Motors on Thursday said it planned to offer two new credit cards which the automaker hopes will boost sales by rewarding users with discounts on new GM vehicles.
Users of the cards, the GM Business Card for small and mid-sized businesses and the GM Extended Family Card for GM employees, retirees, suppliers, dealers and their families, can apply 1 percent of the value of every purchase they make toward a GM vehicle.
GM teamed with Chase Manhattan Bank, a unit of J.P. Morgan Chase & Co. Inc., for the GM Business Card, and with Household International Inc., a unit of HSBC Holdings Plc, for the GM Extended Family Card.
The cards will strengthen vehicle sales and foster more owner loyalty, said John Smith, GM group vice president of North America vehicle sales, service and marketing.
The new cards will have little impact on the GM Card, the credit card the automaker launched in 1992. About seven million people are holders of the GM Card, and rewards from the credit card have been used toward the purchase or lease of about four million GM vehicles, Smith said. About a quarter of those sales were from people who did not own a GM vehicle.
"We sell more vehicles through the GM card then all of the vehicles sold in North America by Lexus and Mercedes combined," Smith said.
Holders of the credit cards will use their discounts to buy or lease about 400,000 vehicles this year alone, Smith said, and about a quarter of those will be from consumers who currently do not own a GM vehicle.
Unlike the other GM cards, the new ones do not have limits on how much a holder can earn each year or apply toward a new vehicle.
The GM Business Card will be available immediately, and could generate as many as 100,000 new accounts in the short term and few thousand vehicle sales this year, said Jack Bowen, general director of GM's customer network.
The GM Extended Family card, available in July, could eventually double the nearly 500,000 GM employees, retirees, suppliers, dealers and family members currently holding a GM credit card, Bowen said.