> This is why e.g. American Express has cards with great rewards, high annual card fees to keep the riffraff away, and retailers willing to take a larger % cut in order to have those cardholders shop at their store where they presumably purchase more.
At the high end it actually diminishes. Rewards cards targeting middle of the distribution are more lucrative, generally. Citi Double Cash gets you 2% cash back on purchases whereas the Amex Platinum gets you 1X on all spend worth at most 1.25% (and 5X on airfare).
For most purposes, a free 2% cash back card is probably optimum. I have another relatively low fee card for various reasons. If I still traveled enough to justify an airline club card (as I used to), I might have that.
I would say unless you find playing the miles and points game to be very enjoyable, which I do, you're better off with a cash-back card. For most people the Citi Double Cash at 2% is a great bet, if you have $100K in investments with them, you can get 2.625% back via Bank of America's Unlimited Cash Rewards card.
At the high end it actually diminishes. Rewards cards targeting middle of the distribution are more lucrative, generally. Citi Double Cash gets you 2% cash back on purchases whereas the Amex Platinum gets you 1X on all spend worth at most 1.25% (and 5X on airfare).