But there may be a way to remedy the unfairness.
 | By Suein Hwang Business, Economics and Technology Editor, Opinion |
Who doesn't love something for nothing? |
Over the past few years, banks have been flooding the market with credit cards that offer an alluring array of perks and sign-on bonuses worth thousands of dollars. And more of us — particularly the affluent professionals — are taking the bait, turning daily swipes at the gas station or the grocery store into lie-flat airline seats or a weekend jaunt to Costa Rica. There's a definite thrill in the feeling of purloining rich perks from large banks. |
Of course, banks don't usually end up with the bill. Those fancy airport lounges, hotel suites and concierges are being paid for in large part by the less fortunate. |
That's the startling conclusion of an essay by Chenzi Xu, a finance professor at the Stanford Graduate School of Business, and Jeffrey Reppucci, a Stanford graduate student. At a time when demand for credit card rewards is only going up, Xu and Reppucci explain how the poor wind up stuck with the bill for those first-class flights and overwater bungalows. They cite a recent study that finds that $15 billion worth of rewards value is redistributed annually "from poorer to richer, from low to highly educated, and from diverse to less diverse communities." |
There is a possible legislative solution, though. And while the result would be less fun for those who reap the rewards, it would be a lot more fair to society. |
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