Do Card Reward Programs Deal Low Income Households An Unfair Hand?

It’s the report that has everyone buzzing. The Consumer Payments Research Center, which is a part of the Federal Reserve Bank of Boston, recently released a paper that finds on average credit cards ‘take a swipe’ at low income households.

The research and formulas suggest that those who don’t have or use cards are paying more in goods and services because merchants have to increase prices in order to pay the merchant discount that creates a benefit to those who use cards, that are by and large, higher income households.

In this exclusive NEXTcast interview, Karen Webster goes behind the Greek with one of the report’s authors and Boston Fed Senior Economist, Scott Schuh.



Executive Bio: Scott Schuh is the director of the Consumer Payments Research Center and an economist in the research department of the Federal Reserve Bank of Boston. He has served as an economist for the Board of Governors of the Federal Reserve System and President Reagan’s Council of Economic Advisers, and as a research associate at the U.S. Census Bureau. Schuh has taught at Johns Hopkins University and Boston College.

Schuh’s research focuses on the implications of microeconomic heterogeneity for macroeconomic behavior in a wide variety of applications. Much of this work has involved developing and analyzing data on employment changes at U.S. manufacturing plants and studying the role of gross job flows in aggegate fluctuations, as documented in two co-authored books: the award-winning and critically acclaimed Job Creation and Destruction (1996), and Job Creation, Job Destruction, and International Competition (2003). His other important research focuses on the roles of investment (especially inventories), technology, and monetary policy in business cycles, and on the role of productivity in growth. His latest research involves developing new data to study consumer payment choice and its implications for monetary theory. His research is published in scholarly journals, including the Journal of Monetary Economics, the Journal of Money, Credit and Banking, and the Journal of International Economics.

Schuh earned a B.A. from California State University, Sacramento in 1985, and a Ph.D. and M.A. (economics) from Johns Hopkins University in 1992.

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