Applying for credit card get gift, consuming by credit card with cash back… credit card application and using have so much benefits. Many of us applied for multiple credit cards based on the above given reasons. However, we have no idear that only if you starting to use credit card for consuming, the bank has earned from you. How does the bank earn from your credit card payment processing:
1、credit card interest revenue. The card holder overdraft the credit limit, which generates interest. This is the main part of the credit card revenue. If card holder pay the bill overdue or pay minimum amount, the interest will be generated. It is about 5%.
2、credit card annual fee. Bank charges the maintenance fee annually from the card holder, most of are for platinum card, diamond card or the special card which does not waive the annual fee.
3、credit card withdraw fee and punishment fine. Card holder has to pay processing fee for withdraw from credit card even if it’s the money you deposited in it. Due to unpaid caused overdue payment or fee from consuming exceeds the credit limit, these are the fine for the punishment revenue.
4、credit card processing fee. Card holder apply for payment in installments , which is the processing fee revenue for bank. In recent years the installment business is very popular, bank naturally welcome card holder payment by installments.
5、other income. Credit card replacement fee, reported lost fee etc. This part of fee is much less compared to the other fees.
6、credit card swipe fee. When customer purchase something from merchant, merchant will be charged by a certain percentage of transaction amount as a fee by the bank. This part has nothing to do with the cardholder.