Holden And Westpac Join To Launch Credit Card
The Age
Tuesday May 16, 1995
Holden and Westpac yesterday jointly released Australia's newest credit card with a ``frequent user" reward of a discount on the price of a new car.
Ford Australia has also been developing a card, but Holden yesterday won the race. Both companies have similar cards in use in the United States and Britain.
General Motors launched its MasterCard in September 1992 and today it is carried by about 11 million Americans.
The Australian system is very similar, with Westpac replacing Household Credit Services of California as the credit provider (Ford US uses Citibank). The GM Card can be issued on MasterCard or Visa, and can be used as a normal credit card, here and overseas.
Every purchase gives Holden credit users 5 per cent of the value of a purchase towards a rebate on a new car. The maximum discount on buying or leasing a new Holden will be $3000. The discount is transferable to a family member who doesn't hold a GM card.
The interest rate is 16.9 per cent with no annual fee in the first year, and an interest-free period of 55 days. Balances from other credit cards can be switched to the GM card, and any balance over $200 immediately attracts the 5 per cent rebate.
Mr Bill Hamel, the managing director of Holden, said at the joint launch in Sydney yesterday that the card was not just for Holden owners and was not ``just another credit card".
Holden's general marketing manager, Mr Ross McKenzie, said the GM Card was different from existing fly-buy and frequent flyer schemes.
``There is absolutely no comparison. We offer a 5 per cent rebate the others average out about 1 to 2 per cent," he said.
The pooling of rebates by transfers between GM card-holders would not be permitted.
Mr McKenzie yesterday foreshadowed a ``partner program" in which the 5 per cent rebate would be gained by shopping with other suppliers.
In the US, for instance, GM customers gain the same 5 per cent rebate for purchases from Mobil, Marriott Hotels, Fairfield Inns, and the MCI telephone system, as well as GM's own travel service, which includes suppliers such as Delta Airlines and Club Med.
In North America both the GM and Ford programs allow a maximum rebate of $US3500 over seven years, against $3000 over five years in Australia (in Britain the Vauxhall discount is E2500 over five years).
By paying an annual fee, American users can qualify for a GM Gold Card, which doubles the rebate limit to $US7000 after seven years.
The newest Australian card represents a threat to the Fly-Buy program, in which Shell is heavily involved. Mr Hamel said the GM Card was the most successful launch yet of a credit card in the US, gaining two million card-holders in 60 days. It was now the fastest-growing card in the world, with 15 million held in four countries.
On the latest figures for credit cards, Bankcard has 39 per cent of the total Australian market, Visa has 29 per cent, MasterCard 25 per cent and ``others" 7 per cent.
Reserve Bank figures put the market at 6.6 million accounts with an annual turnover of and $23 billion in annual turnover of sales and cash advances. Of that $5.637 billion is in of that called ``outstandings", meaning consumer debt.
The Fly-Buy program does includes National Australia Bank credit cards, but is seen more as best described as a restricted-use shopping card.
Westpac's chief executive officer, Mr Robert Joss, said the GM Card would be accepted worldwide by 12 million retailers, 300,000 ``institutions", and 200,000 ATMs.
© 1995 The Age
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