How Lower-Income Consumers Are Subsidizing Your Credit Card Points

As America gradually became a cashless society, credit card rewards programs have become increasingly popular, offering consumers back part of what they spend in the form of points to use on flights or hotel stays, or cash back. To pay for this tribute, credit card companies have increased the fees they charge merchants for each credit card transaction, and the merchants in turn pass those increased fees on to customers by increasing prices. These higher prices impact all consumers, but only those with credit cards, who are on average wealthier than those who do not, enjoy the resulting benefits. We’re talking about this system where those who don’t have a credit card pay the bill for the rest.