â€¢The current structure of the credit card system requires lower income and disproportionate numbers of minority consumers to transfer billions of dollars to higher income and disproportionate numbers of non-minority consumers.
â€¢Total money transferred in the United States due to swipe fees and rewards is about $1.4b to $1.9b on gas and groceries alone. â€¢The bottom 50 percent of income earners pay at least $669 million more than they should and the top 10 percent of earners receive at least a $354 million subsidy. â€¢Card rewards accrue disproportionately to wealthier households even after adjusting for spending. â€¢Consumers with high school diplomas paid more to subsidize people with advanced degrees. â€¢Minority households paid more to subsidize non-minority households.The report's author, economist Efraim Berkovich of the University of Pennsylvania, offers some remedies for this inequality among consumers. The bulk of the suggestions have to do with either lowering interchange fees or letting merchants decide which cards and/or rewards programs they accept. At any rate, making people who pay with cash or debit -- because they can't qualify for a credit card or paying with cash/debit is being a more responsible consumer to them -- have to compensate those who use credit cards is unfair. If credit card companies want to reward their customers, they shouldn't be stealing from those whom they don't even do business with. "This study demonstrates that credit card companies have secretly rigged the system so that everyday Americans lose out to those who enjoy top incomes; it also suggests that 'unbanked' Americans, including disproportionate numbers of Hispanics, who don't have cards are hurt the most by swipe fees," said Gus West, Chairman of The Hispanic Institute.