How credit cards make money
Credit cards make money through net interest, interchange, fees, and marketing contributions.
I learnt a lot about economics and finance from this one.
“Competition for the business of business travelers caused one of the most important innovations in both consumer banking and the travel industries ever: cross-subsidization of credit card customer acquisition with travel company loyalty points. This economic engine became so massive that it is now worth strictly more than the airlines themselves, and it sparked a change of practice across U.S. cards: competing aggressively for customers by rebating interchange in the form of either rewards (such as airline loyalty points) or cash back (a post-transaction discount).”Posted on 2021-11-06T07:04:47+0000