On July 21, the new Consumer Financial Protection Bureau opened its doors for business, and at the same time launched a portal (via a call center and snail mail as well as online) through which consumers could complain about their credit card companies. In spite of that launch being reported on the IndexCreditCards.com news blog, some people may remain ignorant of the service’s existence, a possibility that might appear likely given that it received only 5,074 complaints up to Nov. 15.

Top credit card complaints

The CFPB broke down complaints into 33 categories (including one called “other”), so it gives us a chance to see the things about credit card companies that bother people most. Perhaps surprisingly, only three of these each made up over 10 percent of the total:

1. Billing disputes: 13.4 percent
2. Credit card rates: 11.0 percent
3. Identity theft/fraud/embezzlement: 10.8 percent

The fourth largest category was that “other” one, and no other (other than “other”) accounted for more than 4.4 percent of all complaints. One interesting observation is the low levels at which the three fee-related categories (late fee, overlimit fee and other fee) appear. When you add them all together, they make up less than 8 percent of all complaints. Before the Credit Card Act was implemented, you might have expected the ultra-high penalty fees that issuers used to charge to have topped the list.

Credit card interest rates

At first sight, consumers’ beefs with credit card rates seem strange. We all know what rates we have to pay on our cards, so what’s the problem? Unfortunately, the CFPB doesn’t provide an answer, but it may be that penalty rates are the issue. These can be triggered by late payments, and often result in a doubling of the APR that a consumer is used to paying. You can see someone being outraged if such a hike were to be imposed (and one usually would be) after they’d provided their credit card issuer with a perfectly reasonable and innocent explanation for a one-off slip.

Of course, credit card interest rates could easily become an increasingly common cause of complaint in the future. Most credit cards today have variable rates, and when these eventually begin to climb–and some believe they might do so steeply once the economy gets fully back on its feet–then many who carry forward significant balances could well find themselves suffering real pain.

Balance transfer credit cards

It was encouraging to see that only 83 complaints (1.7 percent of the total) were received concerning balance transfer credit cards or balance transfer fees. Many see these as important tools that can help them head off financial problems before they get too serious, so it’s important they work well.

However, you have to recognize the limitations of the data. If only 83 balance transfer credit cards were to have been issued during the period the figures covered (an incredibly unlikely scenario) then that would mean that every one of them was a cause of complaint. The thing is, we don’t know how many were issued, so we can’t make more than intelligent guesses about how well they’re performing for cardholders.

There is another weakness in the CFPB report: it provides only a snapshot of the period covered. Of course, that’s inevitable for the first data from any tracking study. What will be even more interesting in the future is to watch trends develop. The CFPB, the credit card companies, and you as a cardholder should then be able to identify problem areas of the business as they emerge, and address them. So, for example, you might one day see that complaints concerning cash advance fees have suddenly jumped (they account for only 0.3 percent in the current report), and that might prompt you to check whether your issuers have bumped up their fees recently and, if so, consider switching to a different card.

A truly free market can only exist when all parties have access to full, accurate and timely information. Anything that improves the flow of knowledge, even imperfectly, should surely be welcomed. The CFPB is surely a step in the right direction.

Stand by for a blockbuster Black Friday weekend. Recently, the National Retail Federation (NRF) reported the results of a survey that suggested that half of all Americans (152 million) are planning to make purchases either in-store or online over the three days running from Friday through Sunday. That’s way up on last year, when some 138 million were expected.

Online shopping

How many will venture out and how many will head for their home computers may well depend on the weather and the crowds. Extrapolating from the NRF survey sample, about 74 million are certain to visit stores, while another 77 million say they plan to wait and see how cold it is and how mobbed the malls are.

One thing seems certain, at least according to new research published by comScore on Nov. 23: it’s going to be a bumper year for online sales. Just during the first 20 days of November, retail e-commerce sales reached $9.67 billion, 14 percent up on the $8.47 billion spent during the same period last year. comScore now forecasts that such purchases for the whole 2011 holiday season will top $37.6 billion, 15 percent up on 2010’s equivalent number.

Credit cards and online shopping

Presumably, a large chunk of that will be spent using credit cards. There are at least four reasons why anyone with self-discipline, sound finances and cards (particularly rewards credit cards) should think twice before paying for online purchases any other way:

1. Credit cards provide better statutory protections against fraud and shoddy or wrongly described goods than any other payment method.
2. Many rewards credit cards are currently offering exceptional deals both on the cash and points you can earn and on redemptions.
3. You get an interest-free “loan” between the date you make a purchase and the date you have to settle your next card statement.
4. Many credit cards have built-in protections that can extend warranties and boost your right to return unwanted goods.

Credit card debt and temptation

Of course, those who can’t resist tempting bargains may be better off sticking to debit cards, checks and cash. Writing in the Detroit Free Press on Nov. 24, Susan Torpor gave a sobering example of how those extra impulse purchases can add up–and how they can affect your credit card debt.

Suppose, she suggested, that you charge an extra $25 a day in impulse purchases to your credit cards between Thanksgiving and New Year’s Eve. If you only make minimum payments on the $950 you run up, it should, she calculates, take you six years to clear the debt. And, if your credit card rates average 15 percent (lucky you!), you’re likely to pay $501 in interest charges for the privilege.

No wonder credit card companies are so keen to tempt you with promotions and enhanced rewards this holiday. They want your money.

In theory, you can swipe any American Express, Discover, MasterCard or Visa product at any location anywhere in the world that accepts those cards. The reality can be different. The United States is fast becoming the only advanced nation that has not switched–or is not in the process of actively switching–to the so-called “EMV” payment technology, which, instead of having a magnetic stripe, uses a tiny microprocessor chip embedded in the credit card to enable transactions.

No matter what the theory is, in practice American travelers often encounter problems in the 130 countries that have so far adopted EMV with both wary merchants and automatic payment devices–when pumping their own gas, buying rail tickets, paying tolls, using hotel express check-out machines and so on.

Credit cards to go

As increasing numbers of their customers complain of bad experiences, American credit card companies are beginning to respond by issuing products that have both magnetic strips and chips, and that thus can be used anywhere. The latest such product comes from Chase, and is the British Airways Visa® Card. Chase says that this is the first among airline credit cards to be EMV-enabled, although Business Insider reports that Citi’s chipped Executive AAdvantage World MasterCard was launched in July. And U.S. Bank’s range of more general travel rewards cards has one.

Chase already has two products with chips: the J.P.Morgan Select card, and the Palladium card. Other issuers, including Wells Fargo and the United Nations Federal Credit Union, have been trialling or generally issuing EMV cards, and Citi says that it plans to do offer more soon.

Rewards with no foreign transaction fees

Chase’s new product comes with a hefty $95 annual fee, although that may not bother too much the high fliers (in both senses) to whom the credit card is designed to appeal. Indeed, regular travelers may find that the card’s lack of foreign transaction fees could easily save them that–and considerably more–over a year.

Like many travel rewards cards, this one comes with its own currency, in this case called “Avios.” You earn 2.5 Avios for every dollar spent on British Airways purchases, and 1.25 Avios a dollar on everything else. Handily, these can be redeemed for flights and upgrades not only with British Airways but also with the other 11 partners that make up the oneworld® alliance:

• American Airlines
• Cathay Pacific
• Finnair
• Iberia
• Japan Airlines
• Lan Airlines
• Malév
• Mexicana
• Qantas
• Royal Jordanian
• S7 Airlines

In a press release, Andrea Burchett, who’s a spokesperson for The Mileage Company, which operates British Airways’ Avios currency and rewards program, commented:

The new EMV chip-with-signature provides our globally minded flyers with a safe and convenient way to make transactions when overseas. The addition of EMV chip-with-signature technology makes the British Airways Visa card the first airline co-branded credit card issued in the United States that is chip-enabled, which is just one of the many valuable benefits afforded to our loyal customers.

It’s been a long and painful path, but most of us finally seem to be on top of credit card debt. But have we learned our collective lesson?

Credit card debt problems contained…

Two authoritative reports on card debt have been published in the last week, and both contained their share of cheerful reading. The first, from Fitch Ratings, show that “charge-off rates” (when credit card companies write off debts as noncollectable and pass them on to collection agencies) remain very low. In the third quarter, they averaged, for the top-seven card issuers, 4.53 percent which was down 363 basis points (bps) year over year. The other report, from TransUnion, showed that the number of delinquencies (when cardholders fall 90 days or more behind on their accounts) remains “near record low levels.”

…for now

However, both reports also contained somewhat muted warnings that there could be clouds on the horizon for consumers and credit card companies alike. TransUnion reported that the third quarter saw the first rise in delinquency rates for two years. And, of course, many delinquencies turn into charge-offs, so it’s no surprise that Fitch says: “…higher provision expenses [are] expected for 2012.” In other words, card issuers should set aside more money to cover bad debt next year.

Now, it’s true that neither of the reports is predicting serious problems anytime soon. But they contain enough worrying data to cause this blogger some issues.

Credit card offers going subprime

Perhaps the most worrying of all was a remark contained in TransUnion’s press release. Ezra Becker, who’s the company’s vice president of research and consulting in its financial services business unit, said:

We find card delinquency being driven by a number of factors. One such driver is the changing risk profile of consumers opening new credit card accounts. In the face of competition for prime consumers and the clear deleveraging efforts of those consumers, lenders have been gradually shifting their focus to the sub-prime market.

Yep, between July and September of this year, more than a quarter (25.2 percent) of all new cards issued went to subprime borrowers, according to TransUnion’s data. And that just a few short years after an almighty credit crunch created by lending irresponsibly to the subprime.

Credit card interest rates another problem

But it’s not just subprime borrowers who pose a threat. Dan Geller, an executive vice president with Market Rates Insight Inc., told PaymentsSource on Nov. 15:

Issuers are taking a bigger risk than in the past by stepping up promotions and tempting consumers with deals to spend more on their credit cards as we head into the holiday season with the hope that higher spending will lead to balance carry-over.

So issuers are using special credit card offers to tempt the prime and the subprime to take on debt. You can see why. Credit card interest rates are currently unusually high (16.75 percent APR, at the time of writing, according to IndexCreditCards.com), so having customers carry forward balances would boost interest income, one of the card sector’s most significant revenue streams.

Credit card debt to rise?

The latest Federal Reserve data on consumer credit suggest that, in September, revolving credit (which is nearly all credit card debt) fell by 1 percent. However, not everyone is convinced that the Fed’s figures accurately reflect reality. One who may wonder about that is Robert A. Dye, chief economist at Comerica. In a Nov. 15 email, he wrote:

Undaunted by flat-lined incomes, shoppers forged ahead in October driving retail sales up by 0.5 percent, after a strong 1.1 percent gain in September. The income constraint means that households are willing to add debt or reduce their saving rate in order to keep spending more. We saw both mechanisms in play in September and may well see the same when the October income and consumer credit data are published.

So what do you think? Have we learned our collective lesson? Or are we circling back to set off again on that long and painful path?

Capital One last week announced plans for a special Black Friday promotion for holders of its rewards credit cards. From Nov. 25 to Nov. 28, you can gain enhanced points and cash back by using the company’s Perk Central online shopping portal to make purchases from more than 40 retailers.

Extra rewards for Black Friday

Normal rewards (both points and cash) will be boosted by up to 100 percent on goods or services bought from these online outlets. They include:

• Gamestop.com: +40 percent
• Landsend.com: +100 percent
• Lego.com: +100 percent
• Lenovo.com: +100 percent
• Macys.com: +40 percent
• TigerDirect.com: +67 percent

There are no caps on the extent of the rewards you can earn with Capital One, and they never expire as long as your account is open.

Leverage existing rewards points on certain items

As Capital One says, points on its rewards credit cards can be redeemed at any time. But it’s also running a special pre-holiday redemption promotion from Nov. 18 to Nov. 21 that could help you augment the value of the points you’ve already accumulated on your Capital One card. Items being promoted include:

1. Magellan Roadmate 1324 satellite navigation devices
2. Sharp Aquos 60″ LCD HDTV televisions
3. TaylorMade Bumer SuperFast 2.0 Driver golf clubs

If you know a golfer, adventurer or home entertainment enthusiast, then this promotion could turn out to be a thrifty way to kick off your holiday gift shopping.

Rewards credit cards offer more

Of course, as regular readers already know, Capital One’s promotions are just the latest in a long line of marketing initiatives designed to increase card use. Right now, credit card companies are fighting hard for market share, with rewards being their principal battleground.

And their customers appear to like that. Last month, Capital One published the latest results of its continuing survey of consumers’ attitudes to rewards across all card issuers’ products. All those polled held rewards credit cards. The findings included:

• The proportion of customers who were “completely satisfied” with their rewards credit cards increased between the first and third quarters: up to 23.9 percent from 21.7 percent.
• As many as 47 percent of respondents had redeemed at least some of their rewards during the third quarter.
• Some 27.8 percent of cardholders were saving up rewards for holiday shopping.

Capital One recently released its July-September quarterly credit card Rewards Barometer. It’s based on a poll of more than 1,000 Americans who have rewards credit cards, and represents all rewards card holders, not just those of Capital One.

Rewards credit cards satisfaction improves

The number of respondents who ranked their rewards programs “excellent” rose across three criteria between the first and third quarters of this year:

1. Thirty-two percent said the rewards-related customer service they received from their credit card companies was excellent, up from 25 percent six months ago.
2. An even greater rise in excellence ratings (8.7 percentage points) was seen in the “flexibility of redemption options” category.
3. More consumers (up 6.3 percentage points) rated their “ability to earn rewards quickly” as excellent.

Why the change?

Capital One suggests that low consumer confidence in the economy might be behind these shifts. It quoted data from the Conference Board that showed this “recently plunging to 44.5 from 59.2 in July.”

Even more telling may be a study published last week by Sentier Research. The study found that real median annual household income has plummeted in the U.S. over the last few years. It stood at $49,909 in June 2011, down from $55,309 in December 2007.

With all that plunging and plummeting going on, it’s no real surprise that consumers are counting every cent, and valuing even more the benefits they can derive from their rewards credit cards.

Travel rewards cards could be more flexible

In general, respondents reported being happier with their rewards programs, with 23.9 percent telling Capital One’s research company in late August that they were “completely satisfied” with theirs. That was up from 21.7 percent in the first quarter.

However, those with travel rewards cards still have some major gripes. They cited two factors that prevented them from redeeming travel rewards:

1. Blackout dates (25.8 percent)
2. Can’t make last-minute bookings (22.5 percent)

These restrictions are spelled out in each card’s terms and conditions, which can vary considerably from card to card.

Rewards credit cards and redemptions

Many consumers already have plans for the rewards they’re earning. More than a quarter of those with cash back credit cards are saving at least some of theirs for shopping this holiday season, significantly more than the number who are saving for more strategic events such as retirement (13 percent) and college (5.6 percent).

Whether they have cash back credit cards or earn points, an astonishing 54.9 percent of those intending to redeem rewards for holiday gift purchases are planning to buy gift cards. At this rate, those mounds of beautifully wrapped boxes we’re used to seeing under Christmas trees could soon be replaced by neat piles of envelopes.

Is it too soon to wish you a Happy Holiday? Thought so.

It’s been a recurring theme in this blog lately: credit card companies are upping their game as they compete for market share, and consumers have benefited through more generous rewards and improved perks. But it’s not just consumers who are getting better value from their plastic. Businesses too have often found they can get more from their cards. So it was no surprise on Wednesday when American Express and MasterCard each announced significant enhancements to some of their business credit cards.

American Express: email in the air for free

First up, the American Express® Corporate Platinum Card, which is now offering two perks that could have real value for international travelers, and frequent fliers in general.

One of the worst aspects of flying overseas is coming home. No, not being reunited with the family, but having to join those all-too-often very long queues at passport control. U.S. Customs and Border Protection has now recognized just how irritating these long lines can be, and has introduced Global Entry, a program that allows low-risk, pre-approved Americans to avoid most of these delays via a streamlined process. The bad news: there’s a $100 application fee before you can register. The good news: American Express is offering to pick up the tab for those with its Corporate Platinum Card.

Another new perk for holders of that card is free Gogo in-air wi-fi on up to 10 flights a year within the continental U.S.A. You have to buy a Gogo flight pass using your card, but will receive a statement credit for the full cost. The operators of the currently 1,200 airplanes equipped with this service include:

• Air Canada
• AirTran Airways
• Alaska Airlines
• American Airlines
• Delta Air Lines
• Frontier Airlines
• United Airlines
• US Airways
• Virgin America Airlines

American Express senior vice president Jaromir Divilek explained in a press release the thinking behind these innovations:

Business travelers have no time to waste. They’re on the go 24/7, and are constantly looking for ways to save time and be more efficient. These new benefits will ease their time on the road, and, at the same time, benefit the corporation by encouraging card usage and aiding expense management across the organization.

MasterCard: more affordable hotel accommodation

Meanwhile, those who register their eligible small business credit cards with the MasterCard Easy Savings Hotel Network can automatically save 4 percent on “all hotel folio charges” when they pay with that card at over 7,500 mid-scale and economy hotels across the country. Participating chains include:

• Days Inn
• EconoLodge
• Hampton Inn
• Hilton Garden Inn
• Holiday Inn
• Holiday Inn Express
• Howard Johnson
• Hyatt Place
• Ramada
• Super 8

These hotel discounts are an extension of the MasterCard Easy Savings Program, which already offers enrolled small businesses various discounts. Two new ones of these are 10 percent off both cloud-based phone systems from Vocalocity, and tax and financial advice from BIDaWIZ. MasterCard Worldwide vice president Eugene DeSilva commented in a press release:

The expansion of our popular Easy Savings program helps MasterCard deliver on our commitment to help small businesses find easy, stress-free ways to maximize the success of their business and get the most out of every dollar. And, the financial institutions and merchants that issue and accept our cards benefit from creating stronger, more rewarding relationships with their customers.

As small business credit card offers go, that sounds a good one.

It’s that time of the month again. No, not that time of the month, but the one that gives your (male) blogger pain, tension and stress. You know, the one when the Federal Reserve releases its consumer debt statistics.

Credit card debt declines again… maybe

Identifying the emerging credit card debt trends contained in these is so fiendishly difficult that it’s almost enough to make you feel sorry for professional economists. On Friday, the Fed published the figures for August, and these showed that during that month “revolving credit,” which is nearly all credit card debt, fell for the second month in a row. This time the drop was $2.2 billion, or 3.4 percent, a smaller reduction than in July when the decrease was 5.4 percent. In the second quarter, revolving credit actually rose, though only by 1.5 percent.

All those figures are seasonally adjusted. Check out the Fed’s unadjusted data, and you’ll find a different story over recent months:

• Apr: $778.7 billion
• May: $781.4 billion
• Jun: $787.3 billion
• Jul: $788.8 billion
• Aug: $792.6 billion

The Fed’s website isn’t especially forthcoming about how seasonal adjustments are calculated, but some may think that the raw data–especially at a time when so many other factors are in play–is at least as interesting as the adjusted.

Credit card companies lending more?

One of the problems with the Fed’s figures is that they only measure the amount of money people owe credit card companies at a given moment. And that can decline for either of two reasons:

1. Responsible cardholders paying down their balances
2. Credit card companies writing off (”charging off” in industry jargon) debt, and passing it to collection agencies

As has been discussed previously on IndexCreditCards.com (most recently in Lies, damned lies, and credit card debt statistics), taking that last factor out of the equation can make a big difference, and it may well be that actual card debt is rising more quickly than the Fed’s data suggest. Indeed, DailyFinance last month ran a story under the headline, “Credit Card Debt Soars as Americans Borrow Like It’s 2006.”

Credit card interest rates a worry

Some would view higher levels of debt acquisition as worrying even if times were good and borrowing cheap. But, today, the economic outlook is uncertain, to say the least, and credit card interest rates are exceptionally high. At the time of writing, this site’s credit card rate monitor puts their average annual percentage rates at:

• Rewards credit cards: 17.63 percent
• Non-rewards credit cards: 14.88 percent

Credit card debt in context

It seems unlikely that card debt is going to turn into a credit bubble anytime soon. And the economic recovery, such as it is, could be killed stone dead if everyone suddenly stopped borrowing at once. So on a macro level, a mini-borrowing boom might not be a bad thing.

But on a micro level, when it comes to individuals and their families, unmanageable credit card debt can quickly turn into a nightmare. So, if you have any, you might be well advised to reduce it as much as you can, as quickly as you can. After all, few us us know what our employment and financial futures might hold.

If you’ve been following the credit card news blog here on IndexCreditCards.com, you’ll know all about “interchange” fees, which are also known as “swipe” fees. They’re the cut of the transaction value that retailers and other merchants have to pay every time your plastic gets swiped through a reader.

Since October 1, that cut has been capped for debit card use, a move that’s likely to cost banks upward of $6 billion a year. Merchants say they are going to pass on that savings to consumers in the form of lower prices and/or better service, although it’s too soon (if it ever proves possible) to measure how many are doing that, and how many are simply adding the cash straight to their bottom lines.

Credit card swipe fees to fall?

Fresh from their victory in persuading Congress to cap debit card swipe fees, some retailer trade bodies now have credit card interchange fees in their sights. The Retail Industry Leaders Association is already active, and, last month, the National Retail Federation (NRF) unveiled a $10 million lobbying campaign that is largely devoted to capping credit card swipe fees, according The Hill earlier this week.

Yesterday, David French, who’s a senior vice president at the NRF, wrote a blog on the federation’s website in which he argued:

…reforming debit card swipe fees was only the first step. It is estimated that credit card interchange fees generate about $30 billion per year for banks and card providers – for comparison’s sake, debit card swipe fees will now generate “only” about $14 billion per year. And the vast majority of these exorbitant fees go directly to the biggest handful of banks and the Visa and MasterCard duopoly.

Now that the banks’ unfair practices regarding debit card swipe fees have been highlighted and addressed, it is clear that banks are hoping to use higher fees on debit cards to push their customers toward credit cards in order to maintain their bloated revenue lines. As this transition occurs, it is crucial that Congress once again shine a spotlight on bank-interchange practices. Swipe-fee reform is a two-part job, and we are only halfway done.

Rewards credit cards at risk

That argument may sound powerful, especially as French reminds us that a quarter of U.S. jobs and one-fifth of the nation’s GDP rely on the retail trade. However, if you enjoy the benefits of cash back credit cards, travel rewards cards or gas cards, you may want to think again.

That’s because all these rewards programs are largely funded by interchange fees. And credit card companies are likely to have to scale back or even abolish them if a significant cap is imposed. Indeed, they could even have to impose higher annual fees, just as some banks have done on checking accounts as a result of the debit card cap.

There’s also an excellent argument why credit card swipe fees should be higher than those for debit cards. Retailers receive the full value of a transaction often pretty much instantly. But credit card companies effectively have to lend that money for nothing until the next statement due date. That’s a genuine additional cost that compensates credit card issuers for putting money at risk, justifying, at least in part, today’s interchange fees.

More credit card regulation unlikely

It’s hard to imagine the current Congress buying into additional regulation for the banking sector. Although with Congress, apparently nothing is impossible. It’s one thing to resist lobbying from consumer groups, and quite another to turn down a rich and powerful lobby such as the retail industry. Its ability to sway public opinion and make tactical campaign contributions rivals even that of credit card companies.

However, whatever happens legislatively, it’s likely to take years for any new regulation to take effect. So, in the meantime, enjoy all the benefits that your rewards credit cards can bring.

Groupon thinks that it has come up with a smart new idea that could allow you to earn additional rewards when you use your credit cards to pay for goods and services at participating stores, restaurants and other outlets that you use regularly. In effect, it turns your credit cards into loyalty cards.

Rewards credit cards on steroids

So your non-rewards credit cards could earn you rewards, while your cash back credit cards and other rewards credit cards could earn you even more freebies. All you have to do is register your plastic on Groupon’s website, and everything else happens automatically. So there’s no need to use a smartphone or remember to produce a separate loyalty card at the checkout.

Just as with other loyalty programs, it’s likely to be up to each individual merchant to decide on the mechanics and generosity of its particular offer. Many may choose a threshold of spending that entitles you to a major discount on your next purchases. TechCrunch, which broke the story, gave the example of a retailer that offers you $20 worth of goods for $4 after you’ve already spent $100 in that store. However, such an offer would give you a 13.3 percent discount ($16 off a total of $120’s value), and many merchants are likely to pitch their offers at lower levels.

Groupon’s Jeff Holden explained how the new program fits into his company’s wider offerings:

We think there are three components merchants need to run their business in the new world of local commerce. The first is the daily deal, which Groupon perfected as a customer acquisition product and reached massive scale. The second is Groupon Now, its mobile app that lets local merchants do yield management by offering deals when business is slow. The third now is Groupon Rewards, which is built around customer loyalty and retention.

Credit cards as loyalty cards

That makes sense. In the current economic climate, merchants are desperate to acquire and retain loyal customers, but most existing loyalty programs are cumbersome, and require consumers to jump through hoops in order to get and redeem rewards. The advantage of the Groupon service is that it is so easy to use: once a card is registered the consumer has to do nothing.

However, not everyone is convinced. Some of the reader comments that appeared after TechCrunch’s story raised serious issues. Readers pointed to retailers whose fingers had allegedly been burned in previous Groupon programs, and questioned the likely return on investment for merchants who participate in this new one. (Of course, reader comments don’t necessarily represent unbiased journalism and should often be taken with a grain of salt.)

Some consumers may also be resistant to the idea of sharing their card details and spending patterns with third parties. However, if you’re not one of them, you may see little reason not to participate. After all, what have you got to lose?