It's not about differential pricing. If a vendor has to pay x% on a majority of purchases, he will just increase the price for all purchases. So without CC ever

It's not about differential pricing. If a vendor has to pay x% on a majority of purchases, he will just increase the price for all purchases. So without CC everyone pays less, while with a majority CC customers, everyone pays more. While CC payers get some of that additional cost back as reward points. Overall everyone would be better of without CC though.