Feature

Credit card rebates don’t pay

The rebates raise prices for everyone, and unfairly punish consumers who either avoid credit or are too poor to qualify for it, said Larry Harris in the Los Angeles Times.

Larry HarrisLos Angeles Times

Cash-back rewards on credit cards only seem like “free money,” said Larry Harris. In reality they “are hurting, not helping, many unsuspecting consumers.” The rebates raise prices for everyone, and unfairly punish consumers who either avoid credit or are too poor to qualify for it. Credit card companies love the rewards programs, of course, because they encourage customers to use their cards for everything from gas to groceries, generating more in interest payments. But the costs of those rewards are passed on to stores as credit-processing fees, and merchants in turn charge all of their customers higher prices.

“It is shameful that despite their poverty or discipline,” cash customers are forced to subsidize rebates for credit card users. The government could fix this injustice by making stores post two prices: a cash price minus the credit surcharge and a credit card price. Studies have shown that people are more likely to use plastic when the cost of doing so is hidden, as it is now. Credit card companies provide a valuable service by making payments “convenient and secure,” but they should not be allowed to get away with “disguised coercion.”

Recommended

South Korean military says North Korea fired 'unidentified projectile' into sea
File footage of a North Korean missile launch airs on South Korean TV.
all eyes on north korea

South Korean military says North Korea fired 'unidentified projectile' into sea

Germany's next governing coalition could be determined by 3rd- and 4th-place parties
Annalena Baerbock.
what's next for germany

Germany's next governing coalition could be determined by 3rd- and 4th-place parties

Other countries are besting even the most vaccinated U.S. state
Burlington, VT.
vaccinate the world

Other countries are besting even the most vaccinated U.S. state

How the U.S. bungled farm building in Afghanistan
Afghan farmer.
After Afghanistan

How the U.S. bungled farm building in Afghanistan

Most Popular

Jimmy Fallon and Nicole Kidman almost make it through interview without awkwardness
Jimmy Fallon and Nicole Kidman
Last Night on Late Night

Jimmy Fallon and Nicole Kidman almost make it through interview without awkwardness

7 cartoons about America's vaccine fights
Editorial Cartoon.
Feature

7 cartoons about America's vaccine fights

Democrats are governing like Republicans
A donkey.
Picture of W. James Antle IIIW. James Antle III

Democrats are governing like Republicans