December 29, 2010 --
Credit cards that give cash back apparently prompt people to spend more and accrue more debt, according to researchers at the Federal Reserve Bank of Chicago. They tracked 12,000 credit card accounts over two years.
They found that people with reward program credit cards spent about $70 more a month and gained about $115 more in debt than people who were not enrolled in those programs.
The study also found that in many cases rewards entice people whose cards were dormant to start spending again.