Photo: LivingSocial email screenshot
Daily deals giant LivingSocial is planning to launch its own credit card in the spring, Reuters’ Alistair Barr reports. Per CFO John Bax, the card will be available to anyone with a LivingSocial subscription, comes with no annual fee and offers $10 “Deals Bucks” for every 10 purchases.
They’re hoping the card will encourage consumers to return to merchants even after they’ve cashed in on discounts.
“We will use this as a platform to encourage people to come back to merchants,” Bax told Reuters. “Small and medium-sized local businesses will never be able to have their own credit card or loyalty program. We will be able to bring them the benefits of that.”
Just about every major retailer offers some sort of brand-specific credit card today as a way to pump discounts to shoppers and help drive up sales. LivingSocial’s looking to target smaller businesses that can’t afford to launch their own cards.
It’s not fair to judge the site’s first foray into the credit business until more information is available, but branded credit cards are typically bad deals for consumers.
Credit card comparison site Nerdwallet says LivingSocial could be different.
“The LivingSocial card is a great supplement to another rewards card,” says Marketing VP Anisha Sekar. “The reason it differs from most branded credit cards is that it gives rewards based on a transaction threshold, rather than giving out a (usually low) percentage of the amount charged to the card. You could use the LivingSocial card to buy 10 $1 cups of coffee, and get a 100% rewards rate.”
You could use the card for LivingSocial deals only, score your $10 and then use another, traditional rewards cards for other purchases.