Guess who pays for credit card incentive plan?
You do silly.
When credit card companies give you "cash back", or "points" or "air miles", it isn't really a gift. You've already paid in the form of higher prices at the till. Reward programs work when you use your card more frequently. Frequent use of the card forces the retailer to pay more fees to the credit card company. The direct results are higher prices which conceal the credit card fees you are paying indirectly and feeling good about with your piddly "cash back". It feels like a reward but all you are really doing is contributing to consumer price inflation and making credit card companies more money.
If you don't believe me you can believe Target, one of the largest department stores in the US. Target tells the Bloomberg newswire that credit-card interchange fees are the retailer's second-highest expense, exceeded only by payroll. The fees can sometimes exceed 3% of the purchase price.
09:35 PM