5 ms·

This is pretty important - if you're not paying for everything with a rewards card, you're subsidizing those of us who do.

• oasisbob 16y ago
  Yes, exactly. This is why rewards cards are ultimately so evil: they're based on a bastardization of an incentive structure that needs to die. Rewards payouts are funded by interchange fees which are paid by the retailer... aka the consumer. If you use rewards cards, your rewards payment is subsidized by populations whom don't use rewards cards. The whole reason interchange fees existed in the first place was to move some of the costs of operating the networks away from banks to merchants. Merchants have a natural incentive to accept cards (sales!), while banks originally didn't have the same incentive to offer them. Interchange fees were meant to level the field. In a competitive environment, interchange fees should go down and reach an socially efficient level. Instead, the US has the highest interchange fees in the world due to network consolidation and the four-party system catering to banks, not to merchants. IIRC, the average US household pays ~$400/yr in interchange fees. Rewards cards are silly and I'm glad they'll be dying a slow death soon.