Reward Credit Cards Tempt Users Into Greater Debt, Fed Study Says

a wallet full of credit card choices - reward credit cards
a wallet full of credit card choices - reward credit cards

We've written a lot about the relative merits and drawbacks of reward credit cards. A new study from the Federal Reserve Bank of Chicago, though, adds an interesting new twist: Holders of cashback reward cards, it finds, are more willing to shoulder higher debt.

For a diligent consumer, reward cards have their place, especially when you earn cash back via a statement credit or a check. Credit card companies, after pulling back sharply a couple of years ago, are not competing aggressively once again to court attractive customers.