dcsimg

A Groupon rewards credit card? Research shows potential

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook
credit cards

Wall Street already likes Groupon and Living Social for their IPO potential. However, one research firm thinks the nation's banks could see even greater benefits by teaming up with the "daily deal" websites and issuing co-branded rewards credit cards. According to Lightspeed Research spokesman Greg Flemming, many daily deal shoppers already hold some of the banking industry's best credit cards, making them attractive prospects.

A phone survey of 1,500 Americans found that frequent Groupon and Living Social shoppers often earn more than $75,000 per year. Most daily deal subscribers already maximize their savings by pushing more than three times the typical amount of charges through their credit cards every month, while paying their balances in full after every statement cycles. Lightspeed's research found 34 percent of Groupon users were interested in a Groupon-branded credit card, while 27 percent of Living Social customers were hoping for a card bearing the logo of their favorite deal site.

A win-win proposition

While Lightspeed's research echoes the spending habits of high-saving consumers detailed in Thomas Stanley's "The Millionaire Next Door," banks have found themselves embracing customers that some executives once called "deadbeats." Banking regulations and shareholder pressures have forced banks to float more of their cash to low-risk borrowers. Offering the best credit card deals to cardholders who pay off their monthly statements prevents banks from paying costly cash management fees to the Federal Reserve. Encouraging cardholders to make signature-based credit card transactions in exchange for rewards generates short-term revenue from merchant processing fees.

American Express hopes to bypass daily deal sites altogether with its Smart Offers API, a system that enables merchants to pre-program special deals directly into the accounts of mutual customers. Instead of printing a coupon from a Daily Deal website, AmEx cardmembers can check for special offers online and simply swipe their cards as usual to receive statement credits. The Smart Offers API avoids much of the confusion and the fraud attempts that have accompanied daily deal websites since they emerged a few years ago.

0 Responses to "A Groupon rewards credit card? Research shows potential"

No Comments

Leave a Comment
 
 
 
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here

NEXT »

Featured Partner Cards

loading