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Seems like banning credit card reward/loyalty programs would be a net societal good - they encourage overspending and make people feel like they are 'earning' b
by cwkoss 6y ago
Seems like banning credit card reward/loyalty programs would be a net societal good - they encourage overspending and make people feel like they are 'earning' by using credit. Further, the net result of them is to enable more carbon-emitting travel.
Unfortunately the credit lobby is too powerful in this country, so seems politically untenable.
- JumpCrisscross 6y ago> they encourage overspending Do we have evidence rewards increase total spending? I thought it was more about issuers fighting for wallet share. Not increasing spend.
- cwkoss 6y agoI have personal anecdotal evidence. One friend will make increasingly frivolous purchases as they approach rewards thresholds. They ended up with 5-figure credit card debt and a net loss of funds because they considered rewards at time of purchase, but not the interest on the credit for not paying full statement balance. I'd be curious to see a more formal academic analysis of this, however.
- chrisseaton 6y ago> and make people feel like they are 'earning' by using credit But you are earning by using credit. When I buy on credit I literally earn cash back. I also get additional consumer protections. No scare quotes needed!