In my case, it does not have to be liquid. Any investments count, including IRA/529 and other accounts. The 2% cash back cards generally have no requirements.

I am going to have those same investments anyway in VOO at one brokerage or another, so there is no opportunity cost.

You are correct that it is sort of a wealth transfer from poorer to richer. But merchants are free to offer discounts for non credit card purchases, and they do many times.