Which is adjacent to: Nearly everyone loses, because the house knows the odds and controls the terms and conditions of the rewards.
This is false. https://x.com/patio11/status/1902555603534295115
If you're going to claim "the general consensus", [citation needed]. A more likely claim is "more people have read the misinformation from the Atlantic than have read the correct refutation from a domain expert on credit cards", which is sadly probably true.
Patrick doesn't really dispute this, but tries to argue that this doesn't matter because rich people pay more in absolute terms, so they're not getting "subsidized". Maybe this is just word lawyering over what "subsidize" means, but most people would characterize this arrangement as at least "unfair", even though rich people are paying more in absolute terms.
He also points to some graphs about how from the point of the view of card issuers, the middle customers are actually the ones being subsidized, not the rich or the poor. That might be true, but is totally unrelated to the original original point, which is about what effective price (ie. price paid - cashback) consumers are getting at shops. Moreover, the fact that they're getting a subsidy from the card issuer doesn't preclude from them getting a subsidy from the store itself.
And the thread counters that in several ways: rich people spend more in total at the store so their interchange costs are more than made up for by actual spending; and poor people are getting different rewards in exchange for the interchange system, such as free checking/banking (which was made free by using interchange fees to subsidize it so there aren't monthly fees).
To be clear, I'm not suggesting that the financial system overall is particularly fair. If you want cases where it's extremely unfair, a target-rich environment would be bank accounts that have fees that just so happen to disproportionately affect poorer people (e.g. overdraft fees).
But credit card reward programs aren't a case of transferring money from poor individual cardholders to rich individual cardholders; credit cards are a case of transferring money from poor and "rich" cardholders to ultra-rich credit card companies. The right target for the ire, there, is the credit card company, not the "rich" individual cardholders. This is a standard divide-and-conquer tactic: better to pit low-income and high-income people against each other, rather than cast attentions on the very large companies that have constructed a system to profit heavily from both of them.
