# CC rewards programs - bill footed by poor? **URL:** \ **Category:** Great Debates\ **Created:** [November 30, 2023, 4:20pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907 "2023-11-30T16:20:37Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [December 5, 2023, 2:39pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/21 "2023-12-05T14:39:06Z")
> [@Measure\_for\_Measure](#): > > Your quote appears to focus on credit card holders only: poorer consumers subsidize rewards card holders, just not as much as richer unsophisticated card holders do. They refer to another article to discuss what low income cash payers lose. If I understand them properly. > > The term for this general effect is cross-subsidy. Rewards card holders, who tend to be richer, are subsidized by those who pay cash. Just like those who borrow money with their credit card cross-subsidize those who pay their cc bill every month. That’s a stretch. It’s a choice on the part of retailers to make their “standard” price the price of their goods plus whatever credit card fees there are, and then sometimes give a “cash discount”. They could _just_ as easily flip that over on its head, and make it a credit card surcharge. Of course they don’t, because people who pay with cards tend to buy more, and they’ll shop elsewhere without that surcharge, AND because they can just rake in a bit extra from cash customers, if they choose not to give them a discount. I guess where I get cross-ways with this is the idea that since rewards card holders are subsidized by cash payers, and that poorer people tend to use more cash, that rewards card holders are somehow doing something nefarious to the poor. I don’t feel like you can wrap it all up in a bow and blame credit card companies and reward card holders for the plight of the poor. It’s merely one more situation where it essentially sucks to be poor, because they’re outliers in today’s socio-economic system. The whole thing is geared toward people making and spending money, the more the better. If you don’t do either, things aren’t geared toward you, and you’ll pay more, get less, etc… Just like if you’re an outlier in any other segment of society- very tall, very fat, poorly sighted, hearing impaired, etc… things are going to be harder because you’re not who the system is geared toward. I’d almost argue that being poor is a handicap of sorts, just like being blind is. But none of that is the fault of the credit card companies or the reward card users. It’s just the way the world works- the best we can do is mitigate it within reason. ---
**Author:** ![Thudlow\_Boink](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thudlow_boink/32/320_2.png) [@Thudlow\_Boink](https://boards.straightdope.com/u/Thudlow_Boink)\ **Post date:** [December 5, 2023, 3:02pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/22 "2023-12-05T15:02:59Z")
> [@bump](#): > > I guess where I get cross-ways with this is the idea that since rewards card holders are subsidized by cash payers, and that poorer people tend to use more cash, that rewards card holders are somehow doing something nefarious to the poor. I don’t _think_ that’s what @Measure_for_Measure or others are saying. It’s not the rewards card holders or any other individual agent who are “somehow doing something nefarious to the poor”; it’s the _system_. I guess I’m thinking of it in game theory terms, where it’s quite possible for there to be situations where it makes sense for each individual agent to take advantage of opportunities to maximize their own benefit, but everyone would be better off if there were restrictions that removed those opportunities. So I’m still going to use my rewards cards, but I can still support a proposal to limit those rewards (directly or indirectly, say by capping credit card fees, as @Measure_for_Measure said is done in Australia). ---
**Author:** ![muldoonthief](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldoonthief/32/3188_2.png) [@muldoonthief](https://boards.straightdope.com/u/muldoonthief)\ **Post date:** [December 5, 2023, 3:16pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/23 "2023-12-05T15:16:31Z")
Man, @Amateur_Barbarian must really be gone, because he would love this thread. He’d have accused us all of being mass murderers of course: > [@Amazon.com Rewards Visa Card from Chase - What's the catch?](https://boards.straightdope.com/t/amazon-com-rewards-visa-card-from-chase-whats-the-catch/665278/27): > > You are participating in a program that \*depends \*on screwing a large number of the participants to provide benefits that may as well be outright lies for some portion of them. If you think being among the rats fast enough to grab the cheese without getting your neck broken is adequate ethically, _bon appetit_. > > But otherwise, it’s on the same ethical slope as, and not too far removed from, getting $1,000 for pushing a button that kills 1,000 random people. You just choose not to think of it that way, cuz you’re smart and fast and got yours. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [December 5, 2023, 3:56pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/24 "2023-12-05T15:56:46Z")
That’s an absurd contention on @Amateur_Barbarian’s part. I suspect that the really enhanced rewards programs are a reaction to the proliferation of debit cards. Let’s say you’ve got $60 in your wallet, a debit card ($2000 in your bank account), and a credit card with a limit around 10k, and you want to buy a $50 pair of pants (tax included). You can pay cash- you’ll have $10 left over, depending on where you live. You can pay with the debit card- it’ll deduct that $50 from your bank account, and you’ll still have the cash on hand for situations where you can’t use the debit card. So why in the world in that situation would you ever use that credit card? Nobody would- you run the risk of forgetting about it and you have to pay it off later, both of which aren’t an issue with a debit card or cash. Credit card companies know this, so they sweeten the pot- if you use your credit card for the $50 pair of pants, you get back some sort of rewards, and if you use your card consistently to buy stuff _that you can already afford to pay up front for_, you’ll get some pretty sweet rewards over time. That’s the value proposition of credit cards in the face of debit cards. Of course, if you’re poor, debit cards aren’t really a thing, and credit card companies are going to make their money off you some other way. I mean, none of this is _forbidden_ from the poor- there’s no reason that a poor person can’t use their card the same way and accumulate rewards points, if they have the discipline to keep it all within the bounds of what they can pay off, and have enough opportunity to use credit cards in the first place. Ultimately a lot of this comes down to where the CC companies get their money from, and whether it’s ethical for end-users to take advantage of that in rewards programs. I want to point out the obvious- nobody _makes_ anyone get a credit card, nobody makes anyone use it, and nobody makes anyone carry a balance. ---
**Author:** ![Guapo](https://avatars.discourse-cdn.com/v4/letter/g/ed655f/32.png) [@Guapo](https://boards.straightdope.com/u/Guapo)\ **Post date:** [December 6, 2023, 11:21pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/25 "2023-12-06T23:21:42Z")
> [@bump](#): > > They could _just_ as easily flip that over on its head, and make it a credit card surcharge. No, they can’t. That is prohibited by the CC companies ---
**Author:** ![jjakucyk](https://avatars.discourse-cdn.com/v4/letter/j/3d9bf3/32.png) [@jjakucyk](https://boards.straightdope.com/u/jjakucyk)\ **Post date:** [December 7, 2023, 1:31am UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/26 "2023-12-07T01:31:35Z")
> [@Guapo](#): > > No, they can’t. That is prohibited by the CC companies That hasn’t been the case since the Durbin Amendment in 2010. ---
**Author:** ![Guapo](https://avatars.discourse-cdn.com/v4/letter/g/ed655f/32.png) [@Guapo](https://boards.straightdope.com/u/Guapo)\ **Post date:** [December 7, 2023, 11:07am UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/27 "2023-12-07T11:07:39Z")
> [@jjakucyk](#): > > That hasn’t been the case since the Durbin Amendment in 2010. I thought that just applied to debit cards ---
**Author:** ![Railer13](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/railer13/32/9742_2.png) [@Railer13](https://boards.straightdope.com/u/Railer13)\ **Post date:** [December 7, 2023, 12:04pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/28 "2023-12-07T12:04:45Z")
> [@Guapo](#): > > No, they can’t. That is prohibited by the CC companies Yes, they can, up to 4%. In Colorado, it’s 2%. Surcharges are prohibited in Connecticut, Massachusetts, and Puerto Rico. [Cite](https://fortune.com/recommends/credit-cards/what-are-credit-card-surcharges/) > [@jjakucyk](#): > > the Durbin Amendment in 2010 The Durbin Amendment limits the fees that banks can assess to merchants for the use of debit cards, commonly known as ‘swipe fees’. > **[Durbin amendment](https://en.wikipedia.org/wiki/Durbin_amendment)** > > The Durbin amendment, implemented by Regulation II, is a provision of United States federal law, 15 U.S.C. § 1693o-2, that requires the Federal Reserve to limit fees charged to retailers for debit card processing. It was passed as part of the Dodd–Frank financial reform legislation in 2010, as a last-minute addition by Dick Durbin, a senator from Illinois, after whom the amendment is named. > After the rule to limit fees, 12 C.F.R. §235, went into effect, a coalition of merchants sued the Federal... ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [December 7, 2023, 1:48pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/29 "2023-12-07T13:48:57Z")
Also from that Wiki page > The bill aimed to restrict anti-competitive practices and encourage competition, and included provisions which allow retailers to refuse to use [credit cards](https://en.wikipedia.org/wiki/Credit_cards) for small purchases and offer incentives for using cash or another type of card.[[8]](https://en.wikipedia.org/wiki/Durbin_amendment#cite_note-BillComparison-8) ---
**Author:** ![Guapo](https://avatars.discourse-cdn.com/v4/letter/g/ed655f/32.png) [@Guapo](https://boards.straightdope.com/u/Guapo)\ **Post date:** [December 7, 2023, 3:24pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/30 "2023-12-07T15:24:43Z")
> [@Railer13](#): > > for the use of debit cards, As I said, not credit cards. ---
**Author:** ![tofor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tofor/32/13727_2.png) [@tofor](https://boards.straightdope.com/u/tofor)\ **Post date:** [December 7, 2023, 4:29pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/31 "2023-12-07T16:29:07Z")
> In the United States [it is legal to offer cash discounts](https://www.quantumelectronicpayments.com/implement-legal-and-compliant-cash-discount-program/) to customers. This is thanks primarily to the [Durbin Amendment](https://www.nerdwallet.com/blog/banking/durbin-amendment-explained/), an add-on to the 2010 Dodd-Frank Law. > **[Legal Cash Discounts with the Durbin Amendment - True Merchant](https://truemerchant.com/legal-cash-discounts-with-the-durbin-amendment/)** > > The topic of credit card processing fees is often dominated by the expenses of processing cards. Rarely do we actually get to talk about the savings which can be passed down to business owners when their clientele pay with cash. To incentivize cash... ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [December 7, 2023, 4:49pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/32 "2023-12-07T16:49:39Z")
Only certain provisions applied only to debit cards - there were other provisions that applied to credit cards or more specifically the payment card processors and issuers. Merchant agreements used to prohibit minimum purchase requirements - no more. Now , a business can set a minimum purchase requirement of up to $10. There are restrictions - the minimum can’t differ based on the brand of card or the card issuer but stores are no longer required to accept credit cards for a $1 purchase if they want to accept credit cards at all. > **[Is it Legal to Charge a Minimum For Credit and Debit Card Purchases? |...](https://merchantcostconsulting.com/lower-credit-card-processing-fees/is-it-legal-to-charge-a-minimum-for-credit-and-debit-card-purchases/)** > > Is it Legal to Charge a Minimum For Credit and Debit Card Purchases? Many businesses wonder if they can legally impose minimum purchase amounts on customers paying with credit or debit cards. The short answer—yes, and no. If certain conditions are... ---
**Author:** ![Jasmine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jasmine/32/2964_2.png) [@Jasmine](https://boards.straightdope.com/u/Jasmine)\ **Post date:** [December 7, 2023, 4:58pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/33 "2023-12-07T16:58:17Z")
> [@bump](#): > > They don’t have to do this with the poor, as they more or less have them over a barrel because many of them are buying stuff that they can’t afford in the moment and paying it off over time. This is true, but modern America carries very little cash. There are 4 of us here in the tech office, and I’m the only one who carries any cash. The other three use credit cards or Apple Pay, PayPal, Cash App, etc. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [December 7, 2023, 5:52pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/34 "2023-12-07T17:52:58Z")
Sure, but that’s a choice in nearly every case. It’s _really_ unusual when you find a no-cash establishment of some kind, while cash-only isn’t uncommon by comparison. What I’m getting at is that there’s nobody holding the poor down and forcing them to use credit cards. If they’re choosing to do so, it’s at their own peril. Put another way- why should someone who is financially savvy and pays their bill off on time every month be expected to forego their rewards program, or have it removed/scaled down, just because someone else somewhere else can’t get their shit together and deal with a credit card like a functioning adult? That financially savvy person didn’t do anything that deserves being penalized or _not_ rewarded for doing what he’s supposed to, and the contention is that the person doing dumb stuff _shouldn’t_ be penalized for it. Which is absurd if you ask me. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [December 7, 2023, 6:03pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/35 "2023-12-07T18:03:58Z")
> [@bump](#): > > It’s _really_ unusual when you find a no-cash establishment of some kind, while cash-only isn’t uncommon by comparison. Not so unusual any more. There’s been a big change since the Pandemic. Many music and sports venues: theaters, arenas, etc., have switched to only cashless payments at their concession stands. ---
**Author:** ![Railer13](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/railer13/32/9742_2.png) [@Railer13](https://boards.straightdope.com/u/Railer13)\ **Post date:** [December 7, 2023, 6:05pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/36 "2023-12-07T18:05:47Z")
> [@bump](#): > > It’s _really_ unusual when you find a no-cash establishment of some kind, while cash-only isn’t uncommon by comparison. Have you been to a sporting event lately? ETA: Ninja’ed by @suranyi. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [December 7, 2023, 6:23pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/37 "2023-12-07T18:23:27Z")
> [@bump](#): > > It’s _really_ unusual when you find a no-cash establishment of some kind, while cash-only isn’t uncommon by comparison. It’s common enough that some cities and states have banned cashless stores. Sometimes there are exemptions, such as for food trucks (which really doesn’t make sense to me) and sometimes there are work arounds such as reverse ATMs - but nobody bans something that isn’t even happening or that is really unusual. ---
**Author:** ![Jasmine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jasmine/32/2964_2.png) [@Jasmine](https://boards.straightdope.com/u/Jasmine)\ **Post date:** [December 7, 2023, 6:24pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/38 "2023-12-07T18:24:16Z")
> [@bump](#): > > It’s _really_ unusual when you find a no-cash establishment of some kind, while cash-only isn’t uncommon by comparison. Agreed, but some establishments that suffer break-ins and robberies on a regular basis are going no-cash with signs that say, “There is no cash in this establishment.” ---
**Author:** ![Babale](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/babale/32/15666_2.png) [@Babale](https://boards.straightdope.com/u/Babale)\ **Post date:** [December 7, 2023, 6:26pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/39 "2023-12-07T18:26:38Z")
> [@tofor](#): > > But that’s true of credit cards that don’t have a reward. So we should all pay cash to avoid exploiting the poor? But then the stores would have to send someone to the bank to store the cash - probably an armored truck since all their business would be done in cash now. They’d pay for the armored truck by raising prices which disproportionately impacts the poor. ---
**Author:** ![Guapo](https://avatars.discourse-cdn.com/v4/letter/g/ed655f/32.png) [@Guapo](https://boards.straightdope.com/u/Guapo)\ **Post date:** [December 8, 2023, 6:55pm UTC](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907/40 "2023-12-08T18:55:53Z")
> [@suranyi](#): > > Not so unusual any more. There’s been a big change since the Pandemic. Many music and sports venues: theaters, arenas, etc., have switched to only cashless payments at their concession stands. On airplanes as well. [Previous page](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907.md?page=1) [Next page](https://boards.straightdope.com/t/cc-rewards-programs-bill-footed-by-poor/993907.md?page=3)