A new study from the Federal Reserve Bank of Boston has confirmed the theory that credit card rewards hurt the poor while subsidizing the rich.
The report, “Who Gains and Who Loses From Credit Card Payments? Theory and Calibrations” that was released Monday, the people who do not use credit cards are subsidizing the people who do use credit cards due to the across-the-board price increases that are used to cover the additional costs of accepting the cards.
Also, it was found that the use of credit cards and rewards programs was directly correlated with income, the higher income people use credit cards and rewards programs while the lower income people do not.
After taking into consideration the rewards paid out to the credit card customers, the lowest income households ended up paying $23.00 per year while the highest income households, defined as those making $150000.00 per year or more, received a subsidy of $756.00 every year.
And the rich get richer……
Read more at The New York Times.
Related posts:
- Get Rich, For Real Keeping up with the Joneses’ is not the way to...
- Last Minute Shopping? Give the Best Gift Of The Season In this time of frugality, gift cards have become the...
- Incentive For Paying Your Credit Card? Credit card companies have begun to use an unusual tactic...
- Foreclosure-Now An Equal Opportunity Problem The richest of the rich with the highest mortgages are...
- Debt Consolidation For Problem Credit There are various ways for an individual to handle debt...
