Credit Card Rewards Became a $9.2B Wealth Transfer

# Summary Research by Harvard Business School Professor Mark L. Egan reveals that credit card interchange fees create a $9.2 billion annual wealth transfer from lower-income cash and debit card users to affluent credit card users, as merchants embed these fees into prices paid by all shoppers but only credit card holders receive rewards. The system, which shifted an estimated $30 billion total from cash/debit users to credit card users annually, was inadvertently worsened by the 2010 Durbin Amendment, which capped debit card fees and caused banks to eliminate debit rewards while leaving credit card benefits intact, resulting in cash users facing an effective 26% higher sales tax than premium credit card users.