JPMorgan Chase (JPM) is working with LivingSocial, a daily deals provider that competes with Groupon, to provide a credit card that rewards consumers for the money they spend on discounts.

LivingSocial provides locally targeted deals each day to its users. For example, a customer might use a LivingSocial deal to spend $15 for a $30 voucher at a nearby retailer. The new JPMorgan Chase credit card provides five points for every dollar spent on LivingSocial deals. It also provides three points for dining and one point for all other purchases.

Customers can then redeem every 100 points they earn for a dollar to spend on further LivingSocial deals.

"We are pleased to offer social-buying enthusiasts a product that enhances their shopping experience with the ability to earn rewards for their purchases," said Dan Dougherty, director of Chase Card Services, in a press release Tuesday.

Banks and vendors have been struggling to find the right balance between discounts and rewards. SmartyPig, a Des Moines-based online savings account provider, recently removed locally targeted discounts from its prepaid card. It instead provides a simpler cash-back reward, which it said is easier for its customers to understand.