I can't find an actual link to that study, unfortunately, but here's an article based on the info in that DNB study: http://seekingalpha.com/article/20333-guide-to-credit-cards-...
FWIW I use a debit card most of the time because it is much more convenient than cash with the knowledge that I am spending more than I otherwise would.
But more importantly may be that this 1-3% that you "gain" is all lost by getting used to the idea of credit and spending too much and getting in to very costly debt.
In the US the average is US$ 7,194.[1] Significantly higher than in the UK, US5,082 (£3,175). [2] Which is higher than the average for the EU US$ 2,495 (£1,558) (somewhat old EU/UK data, but the general point I think holds.)
[1] http://www.nerdwallet.com/blog/credit-card-data/average-cred... [2] http://news.bbc.co.uk/2/hi/business/5380718.stm
No, no ... no. The cost is not to "society", the cost is to merchants. They just earn less profit. (Think about it, if the cost wasn't to the merchants, they wouldn't care about credit card fees).
What cards are giving over 1% back? I noticed some other commenters talking about 2%. I just get 1% + the occasional special 3% promotion.
As for what cards have higher payout... here's a list I made so I know which card to use where:
# Amazon * 3x amazon.com * 2x gas * 2x restaurant * 2x office supply * 2x drugstore
# Chase Sapphire * 2x travel * 2x dining * travel bonus booked via ultimate rewards * no intl fees
# Discover (open road - apparently no longer offered?) * 2x gas * 2x restaurant
# Citi Forward * 5x restaurants * 5x entertainment * 1 point ~ $0.008
# Virgin * 3x virginamerica.com * 1 point ~ $0.024 towards flights
I also have an AmEx (blue) which has utterly crap rewards. I use it only for Costco and some electronics to get the extended warranty they provide. Other AmEx cards have much better payout.
So basically I use the Citi Forward any time I go out to eat, bars, bookstores, etc. While the points are worth only about 80% of most points, the multiplier more than makes up for it. Incidentally because Amazon is classified as a bookstore, it actually has a better return than the Chase Amazon.com card. If I'm buying anything that doesn't have an actual multiplier (which is fairly rare; most of my purchases are restaurants and Amazon) I put it on the virgin card since the points are worth over 2x what other points are worth - typical of most airline cards.
Australia limited interchange fees around 2003 (cut them in half), and as would be expected, merchants did not lower prices.
"Interchange fees are paid by the merchant, and there have been studies done in Australia that said that consumers have not saved a penny by lowering interchange rates — that the merchants have not reduced prices at all."
Here's the kicker: In the US, if you don't buy with a credit card that earns you "rewards", then you are subsidizing those who do use credit cards with rewards. The reason is because many credit cards give around 1%-3% back, but the prices for everything remain the same regardless of whether or not you pay with a credit card that gets you rewards. As a result, built into the cost of nearly everything, is the cost of providing the airline miles, points, or cash back rewards.
On top of this, credit cards provide you with protection because you can dispute charges, and if someone fraudulently uses it, you do not lose that money immediately. Also, some cards (like American Express) provide 1 year of extra warranty for anything you buy.
TL;DR It's better to buy with a credit card, it costs nothing (individually), and you get benefits. There is a cost to society (everything costs a few % more), but I don't see that changing anytime soon.