An op-ed in the New York Times this month made the odd claim that credit card reward points programs are being paid for by the poor. In the piece, Stanford professor Chenzi Xu and graduate student Jeffrey Reppucci note a “credit card perks war,” which the authors trace back to Chase’s 2016 launch of the Sapphire Reserve card and the subsequent slew of products competitors released to try to keep up. The growing set of options for consumers should be seen as a win for the free market, yet the authors disparage rewards programs as upholding the so-called duopoly between the Visa and Mastercard credit card payment networks. Unfortunately, many Democratic and even some Republican officeholders agree with Ms. Xu and Mr. Reppucci’s misinterpretation of the market’s successes.
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