I think the Grandfather was making a different point. That because rewards cards = higher interchange fee for the merchant, this results in the merchant increasing fees on everyone (the payment networks prohibit charging a higher fee to only those paying with a credit card).
>>The money extracted by the credit card companies and Visa causes merchants to raise prices for everyone regardless of whether they have a rewards card or use a credit card at all.
>>This creates in effect a massive money transfer from the poor, who do not use rewards cards, to the rich consumers who do.