People from the bank are after you to apply for a credit card and give you gifts. There is no trick to apply for a credit card. The credit card issuance business is one of the basic businesses of the bank. What the bank makes is the procedures and installments of the credit card after you swipe the credit card. Interest and fees on cash advances. So why are banks so keen on promoting credit cards?

The reason why banks enthusiastically promote credit cards is mainly based on benefits

First, credit cards have annual fees. Generally speaking, the monthly fee is at least three yuan, and one card costs one That's thirty-six yuan a year. If you have thousands of cards, this is a huge income.

Second, users are encouraged to use credit cards to make purchases, and fees can be collected from sellers. For example, for a credit card purchase of 1,000 yuan, a processing fee of 50 yuan can be charged from the seller.

Third, if credit card users have deposits, they can make money from the interest rate difference between deposits and loans.

Fourth, credit card users can be charged high interest rates and liquidated damages if their overdraft is overdue.

Fifth, some banks will use clever pretexts to make illegal money. For example, some banks hire third parties to encourage users to use a financial product called So-and-So Gold through telephone sales. Although it is claimed to be interest-free, it will charge high handling fees, which is converted into interest, which is approximately equivalent to about 18%. In essence, it is a complete loan shark.

Credit card business can increase intermediary business income for banks and provide calculated wages for managers

For banks, credit cards can be regarded as a profit weapon for banks. Although there is an interest-free period for consumers on credit cards, as long as they are not overdue, they will basically not incur any fees. However, when making purchases, a certain handling fee has been charged to the merchant, and once it is overdue, the bank will charge high interest rates. . Generally speaking, overdue interest is calculated based on the daily interest rate of 5/10,000, and the annual interest rate is 18.25%.

Now banks are vigorously promoting credit card installments. The monthly rate for repayment in 3 installments is about 0.8%, which translates into an annual interest rate of 14.34%; for 12 installments, the rate is 0.73%, and the annual interest rate is 15.79%. It can be seen from the 2021 semi-annual reports of major banks that China CITIC Bank's credit card business revenue in the first half of the year was 28.463 billion yuan, China Merchants Bank, 41.662 billion yuan, and the four major banks had more. It can be seen that banks are really making a lot of money with credit cards.

As for the handling staff, the salesperson can also get a high amount of pricing (commission). A credit card is generally priced at 50-100 yuan by banks, and some can reach about 150 yuan. How many cards can be used in a day and a half? , the income is considerable. Therefore, there are situations where bank employees chase people to apply for credit cards.

Questions about applying for a credit card

Many people may have questions. If I apply for a credit card, use the card without installments, and repay the loan on time before the monthly expiration date, then the bank will not Can’t you earn my money and handling fees? In fact, our thinking is too simple. People who often use credit cards know very well that if you often use credit cards, it means that we are already short of funds and use them too often. In addition, the bank will call you to apply for installments. , it is difficult not to make installment payments. Nowadays, many installment credit cards for renovation and installment credit cards for car purchases only earn installment fees, and the rates are not low.

The days when banks chase you to apply for credit cards may be gone forever. If you have a large credit card, you should cherish it, maintain good card usage habits, and maintain a high credit limit. Due to the requirements of regulatory authorities such as the China Banking and Insurance Regulatory Commission, banks are now becoming more and more strict in issuing credit cards. They are not chasing you to apply for a card. Not everyone can apply for a large credit card, that is, a credit card exceeding 50,000. The bank will also strictly review the financial status of the applicant to prevent the card user from not paying back the card after it is issued, and malicious overdraft causing the credit card to become overdue. Some people still need to find someone and connections to apply for a large credit card.

Banks are not charities, and promoting credit cards is just a commercial activity. As a consumer, you still have to decide whether to handle it based on your own situation. Otherwise, without a reasonable concept of consumption, it is easy to become a "card slave".