Credit Cards and the Reverse Robin Hood Fallacy: Do Credit Card Rewards Really Steal from the Poor and Give to the Rich?

[...]the logic of the reverse Robin Hood hypothesis is analyzed in light of those economic principles, as well as the system's empirical realities. [...]the availability of rewards cards is more tied to credit ratings than to income, which means that even those with lower incomes do benefit from the use of rewards cards. [...]the brief considers the likely distributional effects of proposed legislative or regulatory action to target credit-card interchange fees. On average, each cash-using household pays $149 to card-using households and each card-using household receives $1,133 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general.