Why do banks use credit cards?

Why do banks issue credit cards? Mainly for these reasons!

I believe many people have this experience. The bank will send users a reward message for introducing the card. As long as the user introduces the generated QR code to relatives and friends, after the other party successfully applies for the card and activates it, the introduction People can get certain rewards. Then someone asked, why do banks recommend applying for a credit card? So let’s briefly talk about this issue.

1. Why do banks recommend applying for credit cards?

1. Accurate positioning: Compared with bank clerks who go out to do business and sweep buildings, this kind of "point-to-point" introduction of new users is more accurate, and most of them are people who need useful cards. Furthermore, banks require salespeople to work and need to pay salaries every month, but introducers do not. They only need to give some incentives.

2. Completion of performance: Since the effect of introducing card application is good, it is very helpful to complete the performance requirements of the credit card business department. So in this case of low cost and good effect, the bank will naturally Happy to do it this way.

3. Business conversion: Since the introduced person has applied for a credit card at the bank, as long as the card is used and the repayment is in good condition, the bank will also introduce him to other businesses, such as loans, funds, Financial management, etc. This can maximize the "expected revenue potential" existing in customers.

The above is the answer to "Why do banks recommend applying for credit cards?" I hope it can be helpful to everyone. In general, by introducing a credit card, not only can the bank obtain accurate potential customers at a low cost, but the introducer can also receive rewards such as points, which is quite good. However, the person being introduced needs to pay attention to the fact that when applying for a card, it must be based on his or her own needs and not because of the loss of face. After all, the money after swiping the card will have to be paid back by the person himself.

Why bank staff want you to apply for a credit card

There are four reasons.

First, issuance of credit cards is one of the main assessment indicators for banks. Banking business mainly includes intermediary businesses such as deposit taking, loan granting, fund clearing and so on. In fact, credit cards are the carrier through which banks issue small consumer loans and operate in the form of credit. Within a certain interest-free period, cardholders can enjoy loan repayment through bank advance loans. This not only satisfies consumers' short-term demand for small funds, but also allows banks to issue loans through multiple channels and expand sources of interest. It is essentially a win-win situation. For banks, the credit card market is attractive because of its low costs and high profits. Competition in the banking industry is becoming increasingly fierce. Many banks have not only issued card issuance targets, but also current deposit and installment settlement targets.

The second is about task indicators. When a business point receives tasks assigned by superiors, it must be broken down and implemented to each person step by step. At this time, when depositors handle business, the teller will often recommend corresponding products based on the customer's situation, which is also a requirement of the service system; secondly, as a job, the teller must seize every possible opportunity to promote to the customer as soon as possible. Get the job done and avoid salary and bonus deductions.

The third is interest-related. According to the evaluation system, each branch will reward and punish its subordinate branches. In the end, their branches will reward and punish individuals and sell credit cards worth tens of yuan. This price is no different than piece rate wages on the factory floor. This is not surprising given the peculiarities of the banking industry.

Fourthly, for cardholders, there will be no economic loss regardless of whether they apply or not. People who love credit cards will definitely agree with the act of supporting teller marketing because they know the benefits that credit cards bring to them, such as emergency funds, gift rewards, discounts, and more. Although the credit card has not been activated or consumed, according to the credit card management regulations, the annual fee for ordinary credit cards is not charged. Special credit cards, credit cards with large credit limits, such as gold cards, platinum cards, etc., generally have a fixed annual fee. Regardless of whether it is activated or not, the number and amount of card swipes after activation can be exempted from the next annual fee, but the marketer will notify you in advance. You can completely reject anything you think is not suitable for you.

Many people think that credit cards have no annual fees and are interest-free, so go for it. In fact, banks make money in many ways.

Why do banks encourage people to use credit cards?

A large part of bank performance comes from credit cards. Recommending users to apply for credit cards can not only increase revenue, but also increase user stickiness. . Therefore, bank staff will actively recommend users to apply for a credit card.

In addition, each bank employee will have a monthly quota for applying for a card. In order to achieve the quota, the workers will also actively recommend users to apply for a card.

Whether a user needs to apply for a card depends on their own needs. If there is no need to apply for a card, the user does not need to apply for a credit card. .

Before canceling the card, you need to pay off the outstanding balance, settle the annual fee, and withdraw the remaining balance. When canceling the debit card at the counter, just withdraw the balance.

Before canceling your credit card, please note that if there is an overdue record on your credit report, it is not recommended to cancel it. If you cancel at this time, the overdue records will be kept for a long time. It is recommended to maintain good repayment habits and wait until the overdue records are covered before applying for cancellation.

Different types of bank card cancellation methods are different: Debit card:

Debit card cancellation can be done by yourself or automatically by the bank. . To cancel on your own initiative, you only need to go to a bank branch with your ID card, bank card and other relevant information. In the case of automatic cancellation by the bank, you need to clear the bank card balance yourself to handle it. Generally, when there is a bank card that has not been used for a long time and has a small balance, the bank will automatically cancel the account.

Credit card:

Credit card accounts can be canceled by calling customer service or canceling at bank branches. In the case of phone cancellation, the user can call the customer service hotline of the credit card and ask customer service to help cancel the card. In the case of cancellation at the counter, the user needs to bring their ID card, credit card and other relevant information directly to the branch of the credit card issuing bank to handle the process

Process:

First of all, if the bank card is a debit card, then There is no need to cancel the card. When there is no more money in the card, the bank card will enter sleep state. After a while, the system will automatically cancel the bank card.

If you must cancel the card, you can only go to the bank counter in person to cancel it. You need to take your ID card to the place where the account was opened to cancel it. Remember, you must go to the place where the account was opened. This cannot be done in another place.

If it is a credit card, because the credit card can be overdrafted, it is best to take it to the bank to cancel it if you no longer use it, and there is no interest on the money in the credit card.

Why do banks like you to apply for a credit card?

Every time you go to the bank to apply for a debit card, will the bank staff remind you to apply for a credit card and tell you that it is free to apply at their bank and there are many discounts. So, why are bank staff so keen on letting you apply for a credit card?

Many people will have this experience. Credit card advertisements are everywhere in email boxes and at supermarket entrances. Everyone is confused: Why do banks like to issue credit cards so much? I am even more puzzled that when I apply for a credit card, the bank also gives me a water bottle, a lunch box, and a trolley suitcase. What is the bank trying to do? Below, Huoyan will analyze the problem for you -

Misunderstandings of ordinary cardholders

Many cardholders believe that banks issuing credit cards are not profitable for them. The reason is as follows: If I pay the bank the required number of times a year and repay the loan in a timely manner during the interest-free period, the bank will not be able to charge fees from itself. On the contrary, you can enjoy various discounts offered by merchants, such as half-price meals. There are not many people who think this way. In fact, there are many things in life that seem to be an advantage but are actually a disadvantage. If you don't understand the principle, you will often end up losing a lot for a small amount.

As an intermediary business of banks, credit cards do not occupy a large amount of bank funds but can create huge profits for banks. In addition to common income such as merchant rebates, penalty interest, and fee income, there are other factors that many people don’t know about banks’ preference for issuing credit cards—

1. Increase the number of customers

Customers are a bank's greatest resource. Customers can both provide deposits to banks and have loan needs. The large-scale issuance of credit cards is conducive to increasing the number of customers, especially establishing connections with brand new customers.

2. Understand the consumption habits of cardholders

If the bank can identify in advance the credit card holders who spend gas every week, and then assign the list to its subordinate car loan departments for sales reference, the response rate can be significantly improved.

3. Establish long-term customer relationships

Credit cards are one of the products. The attributes of this product determine that it can ideally establish a long-term relationship with customers. relation. This can improve customer loyalty and stickiness to a certain extent.

In fact, in the credit card game between you and the bank, you are at a relative disadvantage. The main reason is that there is an information asymmetry between you and the bank.

To avoid getting into trouble due to ignorance, we must evaluate whether we need it before applying for a credit card. Credit cards are suitable for people with stable income and strong self-control. Otherwise, what seems to be a convenience will actually become a burden for you. Credit card, also called credit card. It is a non-cash transaction payment method and a simple credit service. The purpose of banks issuing credit cards is to make money, and credit cards are equivalent to bank loans. So it wants more people to use credit cards.

Why should banks develop credit card business

Credit cards can bring substantial intermediary business income (handling fees) to banks. Nowadays, banks have a huge income. At the same time, bank funds can be revitalized.

Why do banks need to provide credit card services?

Why do you ask? The credit card business has become an important part of major banks. The key is to make money and strive for payment share!

Why do banks develop bank card business?

1. Bank card handling fees are obviously more than passbooks, and processing fees and annual fees are required. In addition, bank cards are easy to carry. If you use it in other places, it means off-site business, and there will be a handling fee

2. It is convenient to use. There are many bank card services, covering almost all banking services. Of course, it does not mean that one card is enough. At the same time, it supports By swiping a card for consumption, you can also handle many businesses (deposits and withdrawals, checking accounts, transfers) by yourself to reduce manual operation costs

The benefits of various commercial banks' efforts to develop credit card business

Issuing credit cards

One is for the stickiness of bank customers, which allows customers to have a certain amount of deposits in this bank.

One is that credit card interest can be charged.

One is that you can charge a certain percentage of deduction fees from merchants.

For example, if someone overdues their repayment, they will start to charge overdraft interest

When swiping a card, the bank and the merchant have an agreement and will charge a certain percentage of handling fees< /p>

Is there a SDB credit card salesperson in Tanggu?

Go to the bank and ask

Why do banks develop channel businesses?

Because traditional channels such as counter channels and account manager channels. The cost is relatively high. New channels, such as electronic banking channels (such as online banking, telephone banking, mobile banking), self-service equipment channels (ATM), etc., bring less costs to banks. Therefore, in order to save costs, we must vigorously promote these businesses

Please adopt if you are satisfied

Why is the credit card business an intermediary business of the bank?

The credit card business is the bank’s Intermediary business:

In a broad sense, the intermediary business of commercial banks “refers to businesses that do not constitute on-balance sheet assets or on-balance sheet liabilities of commercial banks and form non-interest income of banks”;

Commercial banks On the basis of asset business and liability business, we use our advantages in technology, information, institutional network, capital and reputation, and do not use or use less bank assets to handle collection, payment and consultation for customers as an intermediary and agent. , agency, guarantee, leasing and other entrusted matters, business activities that provide various financial services and charge certain fees;

In the two traditional businesses of asset business and liability business, banks are one party in credit activities Participation;

The intermediary business is different. Banks are no longer directly involved in credit activities, but only play the role of intermediaries or agents, usually providing paid services.

Is there any development as a credit card salesperson?

This is based on commission. The more people activate your card, the more you will earn

It is best to have a certain amount. Personal connections, this can cover part of it

Every time you open a card and use it for the first time, there is a commission. The basic salary is different in different places and different types of cards.

Why is the bank’s credit card business? Will it develop so rapidly

1. The bank assigns tasks to each level, and employees’ families and friends are promoted. Every unit that pays wages on behalf of the bank and the unit that provides loans goes to Even if you don’t lose it, you can’t use it even if you apply for it

2. Bank cards do have their convenience. You don’t have to carry so much money with you. If you lose it, you can report it as lost. There will be no loss. When you need it urgently, You can overdraft, etc.

Shenzhen Development Bank Credit Card

There is no inter-bank fee, there seems to be no; but the cash withdrawal fee is very high, 2.5%; there is also interest, which is not cost-effective!

Why do banks like you to use credit cards?

General commercial banks mainly rely on the interest rate difference between deposits and loans as their main source of income. Credit card income accounts for a large proportion of intermediary business income. Credit card cash withdrawals and consumption all charge certain handling fees.

As the main business of banks, credit cards can create huge profits for banks. In addition to common income such as merchant rebates, penalty interest, and handling fee income, there are many reasons why banks like people to use credit cards.

1. Increase the number of customers

Customers are the bank’s greatest resource. Customers can both provide deposits to banks and have loan needs. The large-scale issuance of credit cards is conducive to increasing the number of customers, especially establishing connections with brand new customers.

2. Understand the consumption habits of cardholders

Why Taobao can push you products you are interested in every time is because it relies on big data. Credit card consumption records are also a big data. As long as data mining is performed, consumers' living environment and consumption concepts can be roughly seen. As long as you master this core information, you can conduct effective sales. If the bank can identify in advance the credit card holders who spend gas every week, and then assign the list to its subordinate car loan departments for sales reference, the response rate can be significantly improved.

3. Establish long-term customer relationships

In fact, in the credit card game between you and the bank, you are at a relative disadvantage. The main reason is that there is an information asymmetry between you and the bank.

Of course, if you control your desires well, you can also get money on your credit card.

1. Interest-free period. The interest-free period is generally about 20-50 days. During this period, you can use your credit limit for free. If you want to make money, you must pay back the money on time.

2. Various offers and discounts. You can buy the same thing for less money, which is pretty good, right?

3. Points. Points can be used to redeem items on the official website.

Credit cards will bring benefits to banks, which are reflected in the direct benefits that banks obtain through credit cards, mainly including: interest income, annual fee income, merchant commission income, installment fee income, cash withdrawals and punitive fee income and some value-added service income.

1. Interest income

Simply speaking, it is the interest paid for overdraft of credit limit, which is the main part of credit card income.

Some customers will be unable to repay in full on the repayment date. The bank sets a minimum repayment amount and sets interest and late fees for non-repayment, which increases its own revenue. The unique "interest compounding" model of credit cards makes their interest no less than that of credit cards. However, last year, the country abolished late payment fees on credit cards and replaced them with liquidated damages, which alleviated the pressure on repayers to a certain extent. But even so, the interest on credit cards Still very amazing.

According to bank regulations, for credit cards, "consumption first, repayment later" and overdraft are important features. For debit credit cards, "deposit first, then spend", but on the premise that it is determined to be a bona fide overdraft and repayment is guaranteed, cardholders are also allowed to overdraft an appropriate amount within a short period of time when they are in urgent need of funds. Overdraft interest is generally much higher than that of bank loans in the same period, and card issuers have a complete set of measures to prevent and pursue overdraft risk losses.

Credit card overdraft interest will be calculated at a daily interest rate of 5/10,000 within 15 days from the date of signing or bank accounting (including the current day), and will be calculated at a daily interest rate of 10/10,000 for more than 15 days. 30 days or if the overdraft amount exceeds the prescribed limit, the daily interest rate will be calculated at 15%. Overdraft interest is not calculated in stages, but is calculated based on the highest interest rate bracket for the final term or the maximum overdraft amount.

2. Annual fee income

A certain management fee is charged every year for using the card. Nowadays, most of our domestic credit card annual fees are less than 300 yuan, which can be reduced as long as the conditions are met. There are also some high-end credit cards that have annual fees of up to 2,000 yuan or more because they provide special high-end services, and the conditions for them to waive annual fees are also very strict.

3. Rebate income from card swiping

When a customer purchases something by swiping a card, the merchant must give a certain percentage of the transaction amount to the bank. It is the commission that the bank collects from the merchant, and it is also the commission that the bank The most important and stable means of profit. This part of the rebate is usually shared by the card issuer, UnionPay and the acquirer.

4. Bill installment fee income

If you cannot pay off the monthly bill at once, then installment repayment comes in handy, and the installment fee is also currently the bank's One of the most important incomes.

Many banks charge a one-time fee for credit card bill installments, and this fee will be included in the next bill. Different banks have different charging standards for credit card bill installments. In addition, the different number of installments will also lead to different handling fee rates.

5. Cash withdrawal income and punitive income

The former refers to the handling fee paid for withdrawing cash at the counter or ATM machine, which originates from the bank's purpose of promoting card consumption and preventing risks; the latter The penalty refers to the penalty paid by the bank for excessive overdraft on the credit card, which is the bank's purpose to compensate for the risk losses caused to the bank due to the cardholder's default. These two parts account for a relatively small proportion of credit card revenue.

If you deposit your own money into a credit card and then withdraw cash, you will also have to pay this fee. If there is no balance in your credit card and you withdraw cash overdraft, in addition to paying the handling fee, you will also need to pay 0.05%/day interest.

6. Income from other value-added services

For example, the fees paid by cardholders for purchasing goods and paying in installments are actually similar to turning interest income into an intermediary business. The essence remains the same, but It is conducive to expanding consumption and controlling risks.

In addition, credit cards also bring hidden benefits to banks, which mainly refers to the additional benefits that credit card business brings to banks, including locking accounts and funds, and collaboratively promoting other public and private businesses, etc. .

Because we can’t borrow money, only credit cards can help with emergencies.

This is the end of the introduction to why banks use credit cards.

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