What is the purpose of banks issuing a large number of credit cards?

The real purpose of banks issuing a large number of credit cards is to "make money". Banks recruit a large number of card clerks, issue a large number of credit cards, and give away a large number of free credit cards; banks do this for their own benefit, otherwise they will also open the door. For commercial businesses, it is impossible for banks to engage in loss-making transactions. They only use a large number of credit cards to raise the fish and fish for big fish in the long run. The card users are the fish and the banks are the fishermen.

The purpose of banks issuing a large number of credit cards is as follows:

(1) Earn credit card interest

With the large number of credit cards issued, many people now have There are three credit cards in common; card users are allowed to make purchases from the credit card in advance, overdraft consumption, and then encourage card users to make installment payments. Once the card user repays in installments, interest will accrue. Banks are here to make money from card users using installment interest. This is the main reason why banks issue a large number of credit cards.

(2) Earn credit card processing fees

Everyone who has used a credit card knows that if you want to withdraw cash from a credit card, you need to charge a certain income fee, and there is a minimum charge; Cash withdrawal fees vary from bank to bank. Most banks charge 1% of the cash withdrawal amount. This is one of the main reasons why banks issue a large number of credit cards.

(3) Earn annual credit card fees

I believe everyone knows that credit cards are free, but as long as the credit card is activated, it is free. Generally, the annual fee for ordinary credit cards is 20 yuan a year. The annual fee for a gold card is 100 yuan, and the platinum card is between 1,000 yuan and 4,000 yuan. If you think about it, the annual fee for the most common credit card is 20 yuan. With 100 million cards, the annual fee income is as high as 20 yuan. 100 million yuan, this income is earned in vain. However, cardholders who want to waive the annual fee need to swipe the card 6 times within a year. Even if you swipe the card 6 times for consumption, the bank will still receive commission income from the POS machine, so the bank is guaranteed to make a profit by issuing a credit card.

(4) Earn dividends from POS machines

Cardholders take their cards and swipe their cards through POS machines to make purchases. Although users do not have to pay card swiping fees, POS has the opportunity to collect certain handling fees from merchants. , and banks that swipe their cards through POS machines will also get dividends, that is, commissions, which are usually 30% of the card amount; this is also the real reason why banks give away POS machines for free.

(5) Earn other fee income

The most typical ones are credit card replacement fees, late payment fees for overdue credit cards, SMS fees, other value-added fees, and through credit cards Consumption and other expenses, these are the bank's income.

In short, the purpose of large-scale issuance of credit cards by banks is ultimately profit, which is to make money. Otherwise, banks would spend huge costs to issue credit cards. Do they really want to give them to users for free? Don’t even think about it. The real purpose They just care about the users’ money.

What are credit cards used for?

The most direct function of a credit card is to provide you with a flow of funds.

A credit card is something you can use directly when you need money and pay it back later. The bank card and its account are for personal use only. No one who legitimately holds a credit card, whether a friend or another person, is allowed to borrow their own credit card, regardless of the other person's purpose.

Credit card banks grant individuals a certain amount of funds based on their credit. If there is no deposit, they can spend or cash first and then repay the bank card. The main function of a credit card is consumption or cashing. A payment must be on time, otherwise there will be overdue or bad records.

Extended information

There is no need to pay cash when using a credit card, and you will pay it back on the bill date. Credit cards are divided into credit cards and quasi-credit cards. A credit card refers to a credit card in which the cardholder has a certain credit limit and can consume within the credit limit and then repay.

A quasi-credit card refers to a quasi-credit card in which the cardholder deposits a certain amount of reserve as required. When the reserve account balance is insufficient to pay, the card can be overdrawn within the specified credit limit.

The name of the card issuer, expiration date, and cardholder’s name are printed on the front of the credit card.

On the back is the chip, magnetic strip and signature strip. Cardholders can purchase, spend and withdraw cash from dedicated units through their credit cards.