By : Mr Credit Card

Lexus Credit Card Review

Summary - The Lexus credit card allows Lexus owners to earn reward points that can be used for the purchase or lease of a new Lexus. Points can also be used to servicing and auto parts. This is one of the most generous auto credit cards available and Lexus owners will be please about this.

How much rewards can you earn at Lexus Dealerships? - The Lexus Pursuits credit card allows you to earn 5 points for every dollar at their dealerships. This is at the top of the range for auto credit cards. But best of all, you can earn 1.5 points for every dollar that you spend elsewhere (higher than the usual one point per dollar).

Info About Lexus Points? - Lexus Points are essentially worth 1% or 1 cent in reward terms. That means that 1,000 points is worth $1. The points can be used towards the purchase or lease of a new Lexus. Note that it has to be new and not certified used. For the purchase and lease of a new Lexus, you can use points to get up to 10% discounts off negotiated price. You can also use points for servicing and auto parts. For these items, you can use points for up to 100% of the cost.

Lexus points are valid for 5 years and there are some caps on how you earn and redeem points. You can earn a maximum of 200,000 points at dealerships. That means you can earn points for up to $40,000 in spending at a dealership in one calendar year. If you decide to use your card to pay for a new Lexus, you are capped to earning 50,000 points for a single charge to the card. That means that you can only charge up to $10,000 for the purchase of a new vehicle to your card to earn 5X points. For regular purchases, you are capped at earn 7,500 points a month (ie means spending limit of $5000 since you earn 1.5 Points per dollar on regular purchases)

Optional Reward Program - Lexus also has an optional travel reward program for this card, which you have to pay an annual fee for (but the fee is nowhere to be found on their site). The way it works is as follows: you can book your travel with any agent, offline or online. Once it has been booked and charged to your Lexus card, you then call Lexus to inform them about the travel expense and you will be credited on your next statement with any points you have. The number of points needed for travel expenses is 150 points for every dollar.

Fees and Rates - The Toyota Rewards Credit Card has no annual fees.

In terms of points earning capacity, the Lexus card tops class by matching their own Toyota credit card and GM Card in allowing cardholders to earn 5 points for spending at dealerships and 1.5 points outside dealerships. However, there is cap on how many points you can earn a year from new card charges, spending at dealerships and outside dealerships, which most other auto cards do not have. The fact that there is an expiration date on points will dictate whether you should get this card or not (more on that in our verdict). The one thing I also do not like about this card is that you cannot use points for the purchase of a certified used Lexus.

This card also has a reward program which we should mention briefly. But the bottom line is that you should not get the optional travel rewards program because other regular rewards card with no annual fee offer better value for their rewards versus Lexus. For example, for most rewards cards, 100 gets you $1 in value whereas for this card, 150 points gets you $1 in value.

Verdict - The Lexus Pursuits credit card is actually a great card to get if you intend to buy a Lexus for your next car. But the caps and expiration date of points means you've got to plan to buy a new Lexus in 4 years time. Here's why. Let's say you want to buy a Lexus 350 now (with a cost of $45,000). You can use the card to pay for $10,000 which earns you 50,000 points. Let's assume that you do not modify your car in any way and your car is under warranty for the standard 3 years. That means you will be hardly spending anything at the dealership to be honest. Let's assume again you max out of your spending away from the dealership ($5,000 a month equals $60,000 a year), you will earn 90,000 miles. In four years, you will have earn 90,000 X 4 = 360,000 miles from non-dealership spending. Add what you have spent from the Lexus purchase and you will have earned 410,000 miles after 4 years. Because Lexus miles expire in 5 years (by the month and not calendar date), you have to use the points for your new car purchase after year 4. Otherwise, points will just expire and go to waste.

So if your intention is to buy a new Lexus now and another one 4 years later, and assuming you do charge $5,000 a month of the card, I would say that this card will help you max out your saving money for your next Lexus purchase (assuming a $40,000 price thereabouts). But if you intend to buy a used Lexus (even a certified used), or drive the car for longer than 4 years or do not spend anywhere close to $5,000 a month on the card, then I would give this car a skip unless you really want to use points for servicing.