Credit card issuers are pulling one over on us. There’s the obvious ways and less obviously true ways. patio11’s Bits About Money article “Anatomy of a credit card rewards program” disillusioned me from the belief that I was winning by redeeming my credit card points in clever and complicated ways.

Switching credit cards to a “cash back” card with 3% back (e.g. Robinhood Gold) per purchase feels closest to “winning” we can do. It disengages us from the credit card game designed to nudge spending in a specific direction. They’re still coming out on top, thanks to an army of spreadsheet watchers, but it’s not obvious to me how. Are issuers really willing to eat a loss on every transaction for no benefit? I don’t think so. Buying customers through subsidizing these rewards is a bad plan. I’m sure they know plenty of people will sign up just for the rewards, never engaging in the rest of RH offerings. Low loyalty credit card users will disappear as soon as the reward system changes.

I’m half convinced that the true goal of subsidizing rewards is to incentivize excessive spending. But for what purpose? The Amazon credit card has certainly nudged me to spend more on Amazon over other retailers. The RH card doesn’t have this “in network” benefit, as there’s no products of theirs to buy over others using their branded credit card. I don’t believe that RH is scheming to get people into debt. I wish I could peek behind the curtain and understand their internal justification for the program.

Opting out of this game by buying everything in cash is tempting, but that means literally leaving the credit card reward money (3%!!) on the table. Are you willing to pay effectively 3% more for the same goods? If shops transparently passed on the credit card processing fee to consumers and offered a cash discount, we’d be able to use cash without setting off the losing money alarm bells.

Would we buy less goods if everyone used only cash? Probably.