How do banks and earn from Credit cards, i dont pay any annual fees or interest charges,?

Credit card companies don't really like customers like you lol. There are plenty of people out there (like me) who aren't as responsible with their credit. Many people default and get a higher interest rate, get late charges, and over limit fees. My Citibank card makes $120 a month in interest alone off me.

I have been trying to pay it off $1000 a month but now my dog needs spinal surgery so thats paying that is more important. Good news for Citibank.

Banks earn from interests of unpaid balances on Credit cards, and some will even charge a flat annual rate.

If you always pay on time you simply are one of the few ones who do it properly, and get the service for free.. I bet you don't say that credit cards are evil, either. Well done and good luck to you, we need more of the same on this world.

RE:

How do banks and earn from Credit cards, i dont pay any annual fees or interest charges,?

I am using credit cards for the past 3 years( all are life time free cards). No annual fees, i always make full payments every month, so i had never paid financial charges or late payment fees. apart ...

banks earn credit cards dont pay annual fees interest charges

I work for a credit card company. The majority of Credit Card holders do not share the same traits as you do. Finance charges are the numbers one revenue source for CC companies. The majority of banks borrow money from the federal reserve at 2% and turn around and lend the money anywhere from 7.9% or even higher. That is a huge money maker not even including the amount of money possible made off fees.

All merchants who accept credit cards pay the Transaction Fee: when you buy a 6-pack with your credit card the owner of the 7/11 pays to the Visa or MasterCard or whatever...

They charge the merchant anywhere from 2.5 to 3.5 percent of the charge plus a transaction fee of at least 30 cents. That's why some merchants have a minimum charge before you can use your card.

Yes mike is right. The places that you charge at pay a fee everytime they swipe a card. So the card company still gets something everytime you use your card. You are not really at all that profitable for the card company but you still bring in a little so they still want to keep you and give you stuff for your loyalty to them.

The places that accept credit cards have to pay fees to each credit card company per transaction they accept. So the credit card companies make money on both ends of the transaction... They just make more on people who only make minimum payments.

I use credit cards the same way you do, pay the balance off each month. The banks refer to people like us as "dead heads" and may not make any money on us but carry us because we have good credit. They don't have to worry about us. Don't worry about the banks making money , they make plenty off the people that carry a balance.

they make money 2 ways:

1. they charge the merchants for using the card, usually 2%-4% of the transaction

2.they get paid interest by the users of the cards (you are in the minority if you pay your card off every month, GOOD JOB!!..)

SMD