About 90% of credit card spending is on rewards cards, creating a consumer ecosystem addicted to perks.
Credit card companies earn massive profits, over $140 billion annually, with rewards cards contributing significantly.
Different revenue sources include fees, high APRs, and interchange fees, impacting diverse consumer groups.
Credit card debt contributes to income disparities; low FICO score holders face higher delinquencies and debt-to-income ratios.
The reward system benefits those with higher credit scores, while low-income users lose money due to overspending and debt.
Experts estimate over $15 billion annually is redistributed from low FICO score holders to high FICO score holders.
Rewards cards lead to cross-subsidization and disparities in the accumulation of debt and rewards.
Credit card companies profit greatly from fees, interest, and interchange fees. Low-income individuals tend to carry more debt and higher APRs, leading to financial struggles.
Experts believe rewards encourage overspending, leading to disparities in debt distribution.