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Did you use your GM Credit Card's Rewards $ when purchasing your Nox/Terrain ?

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  • Yes, but would have bought it without the card's money

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Discussion Starter #1
Just curious how influential the Rewards Money was in moving you to this purchase.
 

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Very influential, I have received over 12 thousand dollars since I have had my card. I have the original card and it lets you use more than the newer card on some purchases. I have been trading every two years with around 12 thousand miles with a close relative that has several dealerships and the rewards card makes a difference.
 

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When I bought my new 14 back in Jan. The dealership gave me $1k than my GM card allowed! Totaling $3k GM card cash! ;)
 

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I have redeemed over $10,000.00 in the last 20 years on my GM Card. I also have the original card. Usually in the spring and fall they will ''top off'' your card to the next thousand dollar increment. I have gotten the 3 grand a couple of times, gave my son 2200. on his car. It's a great deal if you DO NOT carry a balance month to month.... :cheers:
 

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Re:

Got $4,000 off my SRX.

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For my wife's car we occasionally use the card Subaru offers with Chase. This card is significantly more flexible, offering $100 coupons also good for parts and maintenance, but only at 3%.

I don't have or intend to get a GM card. I wouldn't want to be locked into a particular brand for a purchase, sometimes, years ahead, and something that is only good for the purchase of a new car at a GM dealer. Just too many restrictions on how those rewards can be used, but I see the advantages (5%) for someone that is a GM diehard.
 

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I would have bought GM no matter what. But the card is a no brainer as it is free money.

Charge on it pay the balance at the end of the month and collect the money. I have saved much on our last 6 cars.

I just wish it was unlimited like the first time where you could use all your money.
 

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I used $1000 on the 2014 Terrain I just bought. I also used the GM Card money on a 2003 S10 ZR2 4x4 years ago. I was offered a topoff of $3k last year...and attempted to but a 2013 Impala LTZ, but couldn't reach a deal. The next time I receive a topoff, I'll probably trade again. Like others have stated this is free money, just don't carry a balance on the card.
 

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I've got the original card and it was $4500 I would've left on the table, so I was pretty much locked into buying a GM product (2011 Equinox).

Also previously used $5500 on my '02 Impala, which is scheduled to go over 200,000 miles next year.

But my next purchase may not be GM - mostly because I don't think you can get the same kind of deals anymore. The power of the GM Card dollars has been compromised by lower manufacturer rebates and higher invoice pricing. I think if your timing is right, you can purchase a competitor's product (ie: Japanese) at nearly the same value.

GM really ought to boost the GM Card in some way. All they've ever done is downgrade it. From $1000/year to $500/year, to "We'll tell you how much you can use for this model and that model", to .... what next?? .... taxes, of course: "$4000 in GM Card points, Mr. Smith, but Uncle Sam gets $1120, so that's $2880 to put toward your new vehicle purchase today !!!"
 

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Colt Hero said:
GM really ought to boost the GM Card in some way. All they've ever done is downgrade it.
Blame the changes to the credit card rules. Since banks' bottom lines are tightening due to restrictions on fees and interest on products for those with a lower credit score, they are increasingly decreasing the benes for the 'premier credit rating' cards.

Not sure what you are saying regarding paying taxes on this. Are you expecting your credit card rewards to become taxable?
 

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Ralphalph said:
Blame the changes to the credit card rules. Since banks' bottom lines are tightening due to restrictions on fees and interest on products for those with a lower credit score, they are increasingly decreasing the benes for the 'premier credit rating' cards.

Not sure what you are saying regarding paying taxes on this. Are you expecting your credit card rewards to become taxable?
The major and drastic changes I've mentioned happened 15 years ago. Well before the banking crisis, when the economy was booming with the .com gold rush.

And yes - this 'free money' will eventually be taxed. There's been talk of doing this for years now (maybe 7-10 years). Fortunately it hasn't happened yet.
 

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Colt Hero said:
But my next purchase may not be GM - mostly because I don't think you can get the same kind of deals anymore. The power of the GM Card dollars has been compromised by lower manufacturer rebates and higher invoice pricing. I think if your timing is right, you can purchase a competitor's product (ie: Japanese) at nearly the same value.

GM really ought to boost the GM Card in some way. All they've ever done is downgrade it. From $1000/year to $500/year, to "We'll tell you how much you can use for this model and that model", to .... what next?? .... taxes, of course: "$4000 in GM Card points, Mr. Smith, but Uncle Sam gets $1120, so that's $2880 to put toward your new vehicle purchase today !!!"
I agree, all banking institutions are diluting their reward points (not only GM). But I don't see how it's GM's fault that the points will be taxed?? Shouldn't that frustration be aimed at Uncle Sam??


Colt Hero said:
And yes - this 'free money' will eventually be taxed. There's been talk of doing this for years now (maybe 7-10 years). Fortunately it hasn't happened yet.
Well, technically, there are already places in the tax forms where you are supposed to declare other incomes - which includes cash backs and rewards. Of course most of us won't willingly declares our rewards, and it's difficult for the IRS to track/enforce this. I suppose the IRS is not strongly enforcing this because the expense/collection margin is so small. How much will a person earn in rewards in a year? How much would the IRS have to spend to track these small rewards? They're better off focusing their efforts on those who are trying to fraud the taxes by skimming tens of thousands off their regular incomes or claiming huge tax deductions/credits - and quite likely there already exists official tax paper trails from others in these situations to cross-check.
 

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Chas said:
But I don't see how it's GM's fault that the points will be taxed?? Shouldn't that frustration be aimed at Uncle Sam??
I didn't say (or mean to imply) the taxes were GM's fault. It's just another downgrade coming your way with this and *every* rewards program at some point.

Chas said:
Of course most of us won't willingly declares our rewards, and it's difficult for the IRS to track/enforce this.
I don't see why the IRS couldn't simply require dealerships, airlines, etc to take the tax money when the rewards are *used* (just as in the mock example I gave). It's a LOT of tax money that's not being collected.
 

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Colt Hero said:
I didn't say (or mean to imply) the taxes were GM's fault. It's just another downgrade coming your way with this and *every* rewards program at some point.
Oh, alright. As I was reading that post, it started with bashing GM's lower rebates and higher invoice, continued with GM only downgrading the points and GM limiting points for certain models, then suddenly - taxes (told from GM's perspective too?). At least to me, it felt like you were blaming GM for the taxes as well.

Colt Hero said:
I don't see why the IRS couldn't simply require dealerships, airlines, etc to take the tax money when the rewards are *used* (just as in the mock example I gave). It's a LOT of tax money that's not being collected.
First off, it'll require an act of Congress (not IRS). Wonder how much rewards our congressmen/women earn? They probably don't have much personal incentive to get this worked up??
Second, in USA there's an incremental tax bracket. It'll be much more paperwork for the dealerships, airlines, etc to estimate proper withholding. Not impossible (and there are more ridiculous things being done), but dealerships, airlines, etc will not be supportive of this tax withholding act.

Third, perhaps most importantly - I don't know how "correct" this could be - did you really get $4,500 in cash for your Equinox? (If you don't mind me using your personal example.) It seems you got $4,500 marked off the Equinox as if it were on sale. What's the difference between GM marking $4,500 off an Equinox and Walmart offering 10% off bottles of shampoo? You're not taxed on the 10% break Walmart gave you, so why should you be taxed on the $4,500 break GM gave you?
I wouldn't be surprised if Congress somehow got a tax law on the Cash Rewards, that GM would simply modify their rewards program to percentage points off MSRP. Like every $1,000 on credit = 0.1% off your next vehicle. (But if demand for GM vehicles climb, expect to see lower rebates and further diluted rewards. Supply and Demand.)
 

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Re:

My SRX was $8,600 off sticker and $4,000 top off offer from GM card. Was a new 2012 they were trying to move off the lot. Couldn't pass up almost $13,000 off sticker.

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Chas said:
O]
Third, perhaps most importantly - I don't know how "correct" this could be - did you really get $4,500 in cash for your Equinox? (If you don't mind me using your personal example.) It seems you got $4,500 marked off the Equinox as if it were on sale. What's the difference between GM marking $4,500 off an Equinox and Walmart offering 10% off bottles of shampoo? You're not taxed on the 10% break Walmart gave you, so why should you be taxed on the $4,500 break GM gave you?
Yep, the IRS treats cash back credit card rewards as a discount, not as income. I have not read anything indicating that congress or the IRS intended to change this. How about a source for your conjecture, Colt Hero?

More info on how these rewards are treated is here. Note that a discount like this would reduce your deduction if the car is a tax deductible business expense. But I do not think that is what we are discussing here.
https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Video--Are-Cash-Back-Rewards-Taxable-Income-/INF20522.html
 

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Ralphalph:

It's been years since I heard mention of this. Might've even read about it in a newspaper, for God's sake! Obviously, I hope it never happens, but I also know that they're always looking for new ways to tax us.

And I've never written any tax laws, but I could see a distinction made between a 'discount' from Wal-mart, which is a one-way offering made to no one particular individual, versus GM "dollars" which are earned through a 'contract' between two parties whereby one party agrees to "pay" the other party for sending business their way. It's a quid pro quo that is not very unlike the arrangement one has with their employer. The government intervenes and taxes *that* income. Why not tax *this* income?

Maybe, for starters, GM "dollars" should become GM "points" (not expressed in dollars) - similar to what the airlines and other rebate cards do. Watch out if *that* happens because, rest assured, it won't be a 1-to-1 anymore ...
 

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Colt Hero said:
Ralphalph:


And I've never written any tax laws, but I could see a distinction made between a 'discount' from Wal-mart, which is a one-way offering made to no one particular individual, versus GM "dollars" which are earned through a 'contract' between two parties whereby one party agrees to "pay" the other party for sending business their way. It's a quid pro quo that is not very unlike the arrangement one has with their employer. The government intervenes and taxes *that* income. Why not tax *this* income?

I'm not sure what you are referring to here, are we still talking about the rewards from using the GM card? In any event, if the discount is only valid on some future purchase, then it is nontaxable. In both the walmart purchase and the car purchase, there is still a purchase. It is the purchase which is the defining characteristic that the IRS determined puts these "transfers of value to the consumer" outside of taxable income. Certainly they could change that determination, but I think given that they have the credit card and bank lobbies on the other side of the equation, I think you can rest easy for the time being. Now, if GM is writing you a rebate check after the fact, that is another story.
 

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A discount is an agreement to sell at a price, not a taxable transfer of funds. A rebate on paper is a discount, not taxable. A cash back check is a taxable income item, which the issuing business would certainly send you a 1099.
 
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