Automaker Cards Offer Consumers Points for Brand Loyalty

But that’s just the case with a pair of Visa cards offered by luxury automaker Mercedes-Benz. “If you don’t own a Mercedes, then I guarantee you will never see a solicitation in your mailbox,” said Kevin Boglarsky, marketing manager for Mercedes-Benz Financial.

For Mercedes, limiting eligibility is a way to emphasize that their customers are members of a rarefied group. “What is important to our drivers is the exclusiveness, being part of a club,” said Kathryn Blake, director of credit card services for Mercedes-Benz Financial. Also important, she said, are the benefits offered for charges racked up on Mercedes plastic.

Indeed, holders of the Mercedes Visa Signature card, which was launched in April 2005, can earn up to 10 reward points for every dollar they spend at the company’s dealership; cardholders also earn five points for every dollar spent on Mercedes merchandise, like shirts and bags, as well as 1.5 points for each buck spent on everything else. Those points, in turn, can be redeemed for a wide variety of goodies, including vacations and travel as well as parts and service at Mercedes dealerships. They can even help defray — or, if a person was able to charge up millions on their card, completely cover — the cost of a new car.

Mercedes-Benz Showroom

Although alone in limiting enrollment to current drivers, Mercedes is not the only luxury-car company to offer a credit card with a rewards program. These are known as co-branded cards because they carry both the brands of the issuer as well as the partnering retailer. Co-branded cards are often mistaken with affinity cards, which are popular with universities and charities. Affinity cards look like co-branded cards in that they have the logo of both the organization and the issuer on the actual card. But there are no rewards for users of affinity cards. Instead, every time the consumer uses the affinity card for a purchase, balance transfer or cash advance, the bank donates a small percentage — usually .05 percent — of the transaction to the organization.

BMW, Lexus and Audi all have their own cards, as do Volkswagen, Subaru and General Motors, which in 1992 was the first automaker to roll out its very own MasterCard. Not all automotive credit cards are affiliated with an individual car company, either: Citibank has the Driver’s Edge Platinum Select MasterCard, which allows users to roll up points toward the purchase of a wide variety of both new and used cars.

Published on 7/26/06