07/28/2010 // US // TiffNews10 // News Desk
New York – A recent study suggests credit card fees worsen the income gap between the rich and the poor with regards to consumer purchasing. As reported by Reuters, fees and rewards programs are often subsidized by people who use cash for their purchases, which have a higher likelihood of being lower income workers.
Scott Schuh, Oz Shy and Joanna Stavins are quoted in the report as stating of the matter, “What most consumers do not know is that their decision to pay by credit card involves merchant fees, retail price increases, a nontrivial transfer of income from cash to card payers, and consequently a transfer from low-income to high-income consumers.”
The researchers are further quoted as stating that the issue “may be a concern that U.S. individuals, businesses or public policy-makers wish to address.”
The Federal Reserve Bank of Boston study was released this week.
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