Understanding the Funding Sources for Credit Card Rewards Programs
Sunday, 21 April 2024, 19:00
Credit Card Rewards Funding
Discover how credit card issuers fund their rewards programs and who ultimately pays for them.
Interchange Fees
Credit card companies earn billions through interchange fees paid by the merchants, which helps cover the costs of rewards programs.
Cardholder Fees
Cardholders, especially 'revolvers' with balances, contribute significantly to funding through interest and other fees paid to card issuers.
Optimizing Rewards
To make the most of rewards programs, it is crucial to pay off credit card balances in full every month to avoid paying interest.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.