That's what those "free" rewards really are...getting more detailed information on your spending patterns and profile so they can resell that info to interested parties.
Of course it's a simple rebate as well, but I didn't think I needed to point out something that obvious.
A credit card company could collect spending information and resell it for all cardholders, not just those holding cards having good rewards.
Perhaps this is naive and instead more valuable customers (based on spending more money annually or having a higher credit score to qualify for the card in the first place) have their information sold more, but privacy and reward programs seem like orthogonal aspects of the business to me.
http://www.theguardian.com/money/2013/jun/08/supermarkets-ge...
>If you have a loyalty card or shop online, the supermarkets will build up a demographic profile of you, and collect data about how loyal you are, what you buy and how much you spend, says Guy Montague-Jones of The Grocer.
This is how retail in America works now: collect data, adjust to fit.
The numbers can be one-time use (burners) or re-usable at the same merchant.
Will it affect my rewards? Will businesses still show up unaffected with the same categories on my credit card statement? (I have a travel rewards only card, so breaking the rewards flow is a deal-breaker for using a higher level service.)
Edit: I misunderstood the service as being able to be layered on top of normal credit cards. It looks like the funding source is only bank accounts for now. Still my question remains if building on credit or debit cards is on the roadmap.
Edit 2: They are one-time use numbers, right? "Use at merchants" (plural) seems to possibly imply otherwise.
> What happens when I generate a new Privacy card?
> We'll give you a random 16-digit Visa card number that you can use at merchants that accept Visa debit cards...
Edit 3: It sounds like the business model results in keeping the money that would go to rewards on a normal card.
> How do you make money?
> Every time you spend using a Privacy card, the merchant or website pays a fee (called interchange) to Visa and the issuing bank. This fee is shared with us. We have some premium features planned, but rest assured, our core virtual card product will always be free and we will never sell your personal data.