[bryanlarsen]

There's a big flaw in the article though. Credit card companies get 2-3% of each transaction, whether you're a "deadbeat" or a "revolver". So while they may prefer "revolvers", they're also pretty happy to keep "deadbeat"'s around.

My wife & I together run about $3K a month through our credit card. We get 1% cash back, so that means the bank is keeping 1-3% or $30-$90 every month. If we were paying that on our bank account we'd be screaming about it and looking for a new bank account. Instead, we pay it indirectly through higher prices and don't notice.

[gte910h]

Lots of people contend people who pay through means other than credit cards actually pay it through higher prices, where you get part of it back.

[infinite8s]

This is why I think "cash-back" cards are basically in an arms-race with alternative forms of payment. The cash you get back ultimately comes from higher transaction fees, which translates to higher prices, and so people who don't use cash-back cards end up getting charged higher. The only rational thing to do is use cash back cards for all your purchases, which in the large scale makes just escalates the process.