The ugly truth about credit card points

Recode Daily

Recode

Society & Culture, Science, Technology

4.6 • 1.3K Ratings

🗓️ 9 June 2021

⏱️ 11 minutes

🔗️ Recording | iTunes | RSS

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Summary

If you’re like most Americans, you probably have a credit card that offers rewards such as points, cash back, or miles. Credit card rewards programs are extremely popular: Nearly seven in 10 Americans use at least one rewards-earning card. Many people even have multiple cards. But what you might not know is how those rewards are paid for. No, it’s not the credit card companies—it’s the person in line behind you at the corner store who used cash to pay for their items. Vox’s Emily Stewart (@emilystewartm) explains. References: Read Emily’s story here. Enjoyed this episode? Rate Recode Daily ⭐⭐⭐⭐⭐ and leave a review on Apple Podcasts. What do you want to learn about on Recode Daily? Send your requests and questions to recodedaily@recode.net. We read every email! Subscribe for free. Be the first to hear the next episode of Recode Daily by subscribing in your favorite podcast app. Learn more about your ad choices. Visit megaphone.fm/adchoices This episode was made by: - Host: Adam Clark Estes (@adamclarkestes) - Producer: Sofi LaLonde (@sofilalonde) - Engineer: Paul Mounsey Support Recode Daily by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:30.0	If you're like most Americans, you have a credit card that offers some sort of rewards.
0:44.0	Hotel points, airline miles, cashback.
0:47.0	I have one. I just used points to book a vacation for the first time and it felt fun.
0:54.0	But then I read Emily Stewart's Vox story on the ugly truth behind those fancy points.
1:00.0	It lays out where those points come from and who actually pays for them.
1:05.0	This is where things get a little bit complicated and frankly upsetting.
1:09.0	Here's Emily to explain.
1:16.0	Hi, Emily.
1:18.0	So you recently dug into some research about credit card rewards programs.
1:22.0	What did you find?
1:23.0	Basically credit card rewards programs,
1:26.0	reward well off people, often to the detriment of the poor.
1:30.0	I'm not saying that all rich people use rewards cards and that no poor people have credit cards.
1:37.0	What I am saying is that the research shows that high income consumers are likely to have fancy rewards cards.
1:45.0	Low income consumers are likely to have cash.
1:48.0	Basically, the headline here is,
	...

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