Benje Patterson decided to discuss the incentives he faces when deciding to whip out the credit card to pay for purchases (Infometrics link).
After discussing the benefits he gets from different rewards schemes he points out:
These benefits sound too good to be true, but they really aren’t, so long as you maintain the same spending discipline as our model couple.
But if you aren’t so disciplined (and banks really hope that you are not), then your credit card can quickly change from being a wealth-enhancing device to a real drag on your pocket.
But of course, at his individual level, and given his disciplined use of his card:
But why should I care? So long as banks can continue to profit from these hordes of people with interest-bearing credit card balances, then the status quo remains. As a result, people like me can keep freeriding and enjoying the benefits of sensible credit card use!