Most people base their credit card selection on the rewards because each card has different perks, but who actually pays for this?

So after the Great Recession, banks like Chase, Bank of America, and Wells Fargo weren’t doing very well. They figured that since their whole mortgage business wasn’t doing well, they’d pivot their business to credit cards. They offered different perks like vacations for people who used their cards, and people were very excited about this new opportunity.

However, when you go to buy something, the store is charged an interchange fee which the bank then collects, which is what banks use to pay for your perks. Retailers don’t like this since “why should they pay someone for you to get a vacation”, and as a result, they raise their prices. This means that people who use payment methods that don’t claim rewards (cash or debit) are technically paying for some of the store’s loss from the interchange fee. This basically means that we all are paying for our own perks, but people who use cash or debit cards are taking a bungee chunk.