ATR Response to NYT Op-Ed: “The Dirty Little Secret of Credit Card Rewards Programs”

Chenzi Xu and Jeffrey Reppucci’s op-ed in The New York Times, “The Dirty Little Secret of Credit Card Rewards Programs,” (op-ed, March 4) weaves together a facile understanding of rewards. They point out that “when credit card rewards increase” interchange fees do too. Of course, they do. Rewards programs cannot operate without interchange fees. The piece also implies that lower income individuals always have lower credit scores and thus cannot qualify for rewards programs. The correlation between credit scores and personal income is weak. A 2018 study from the Federal Reserve determined that “income is not a strong predictor of credit scores” and they are only moderately correlated. In fact, 87 percent of cardholders have at least one card with rewards options. Congress killed debit card rewards with the passage of Dodd-Frank in 2010. The justification for the Credit Card Competition Act dissipates when you realize that 22 percent of retailers raised prices on consumers after Dodd-Frank. Rewards are for everyone, don’t let Congress take that away.