Loyola Consumer Law Review Volume 25 | Issue 1 Article 3 2012 Assessing the Cost & Benefits of Credit Card Rewards: A Response to Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations Steven Semeraro Prof. Thomas Jefferson School of Law Follow this and additional works at: http://lawecommons.luc.edu/lclr Part of the Consumer Protection Law Commons Recommended Citation Steven Semeraro Assessing the Cost & Benefits of rC edit Card Rewards: A Response to Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations, 25 Loy. Consumer L. Rev. 30 (2012). Available at: http://lawecommons.luc.edu/lclr/vol25/iss1/3 This Feature Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Loyola Consumer Law Review by an authorized administrator of LAW eCommons. For more information, please contact
[email protected]. Semeraro Article (Do Not Delete) 11/29/2012 12:27 PM ASSESSING THE COSTS & BENEFITS OF CREDIT CARD REWARDS: A RESPONSE TO WHO GAINS AND WHO LOSES FROM CREDIT CARD PAYMENTS? THEORY AND CALIBRATIONS Steven Semeraro* or two decades, economic and legal academics have F speculated about the impact of the fees that merchants pay for credit card acceptance. Since all customers pay the same price, the theory goes, everyone pays for the benefits that go only to credit card users. A recent Federal Reserve Bank of Boston (FRBB) policy paper written by economists Scott Schuh, Oz Shy, and Joanna Stavins entitled Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations1 has taken the argument a step further, contending that credit card programs reduce consumer welfare by transferring money from low-income households that purchase goods and services with payment * Professor of Law, Thomas Jefferson School of Law.