Profit model of credit card business:

Interest income is the interest paid by cardholders on unpaid credit card balances.

Information exchange income is the fee paid by the acquiring bank to the card issuing bank, accounting for a certain percentage of the transaction amount of the special merchant; the annual cardholder fee is the fee paid by the cardholder to the card issuing bank for obtaining the right to use the credit card. ;Other fees and income include fees and income generated from various other credit card services.

Special merchant rebates are fees charged by the acquiring bank to special merchants for providing transaction processing and assuming credit risks; deposit interest income is the deposit interest income obtained from the deposit accounts of special merchants.

Other income includes income from renting POS and card presses, etc. Among the profits from the credit card business, 78% comes from credit interest income, 10% comes from interchange fees, 2% comes from annual fees, 4% comes from cash withdrawal fees, and 6% is late payment and other income.

Extended information

Features of credit card:

1. Pre-deposit of cash is not encouraged. Spend first and repay later. Enjoy interest-free repayment period and can repay in installments by yourself. payment (with a minimum repayment amount), and join international credit card organizations such as VISA, Master Card, JCB, etc. for global use.

2. It is one of the fastest growing financial services today and is an electronic currency that can replace traditional cash circulation within a certain range.

3. It has both payment and credit functions. Cardholders can use it to purchase goods or enjoy services, and can also obtain certain loans from card issuers by using their credit cards.

4. It is a high-tech product that integrates financial services and computer technology.

5. It can reduce the use of cash currency.

6. It can provide settlement services to facilitate shopping and consumption and enhance a sense of security.

7. It can simplify the collection procedures and save social labor.

8. It can promote product sales and stimulate social demand.

Reference: Baidu Encyclopedia-Credit Card