Why do banks recruit people everywhere to apply for credit cards?

The first reason: issuing more credit cards means banks can make money.

Many people think credit cards are free. It’s true that they are completely free to process, but did you know what? The free ones are the most expensive, and credit cards are a typical example.

If you don’t want the money, the bank will send you the credit card. In fact, the pit to make your money has long been buried. The first pitfall is management fees. A credit card requires an administrative fee. Although the amount is not large, it adds up over time. As for banks, there are so many credit cards issued, and each card charges a management fee, which is a large expense every year. So the bank takes the initiative to let people apply for credit cards.

There are two pitfalls: interest and handling fees. Once you use a credit card, these two charges are difficult to avoid. If you choose to repay in installments, the more you spend, the higher the interest you will need to pay back. In fact, banks often make money from interest. Moreover, the handling fee will also increase, so the bank does not worry about you applying for a credit card at all. What you worry about is that you won’t do it.

Why do banks encourage 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.

Extended information:

Credit cards refer to various media that record cardholder account information, have bank credit lines and overdraft functions, and provide cardholders with related banking services.

Credit cards stipulated in the relevant laws of our country ("Interpretation of the Standing Committee of the National People's Congress on Relevant Credit Card Regulations") refer to credit cards issued by commercial banks or other financial institutions with the functions of consumption payment, credit loans, transfer settlement , cash deposit and withdrawal and other full or partial functions of the electronic payment card.

Credit card consumption is a non-cash transaction payment method. There is no need to pay cash when consumption, and repayment will be made on the billing date (BillingDate).

Credit cards are divided into credit cards and quasi-credit cards. Credit cards refer to credit cards in which the cardholder has a certain credit limit and can consume within the credit limit and then repay; quasi-credit card It refers to a quasi-credit card in which the cardholder deposits a certain amount of reserve fund as required. When the reserve account balance is insufficient to pay, the cardholder can overdraw within the specified credit limit. The so-called credit card generally refers to a credit card only.

Starting from January 1, 2021, the credit card overdraft interest rate will be determined independently by the card issuer and the cardholder through independent negotiation, and the upper and lower limit management of credit card overdraft interest rates will be cancelled. The daily interest rate is 0.7 times 5/10,000).

In most cases, citizens who have full capacity for civil conduct (citizens over 18 years old in mainland China) and have certain direct financial resources can apply for a credit card from the card issuing bank. Sometimes, legal persons can also be applicants.

Applicants for credit cards can be divided into units and individuals. Applicants should be institutions, enterprises and business units, foreign-funded enterprises and individual industrial and commercial households with independent legal person status in my country. Each unit applying for a credit card can receive a main card and multiple (5-10) supplementary cards as needed.

Individuals applying for credit cards must have a fixed occupation and a stable source of income, and provide a guarantee to the bank. The forms of guarantee include personal guarantee, unit guarantee and personal capital guarantee.

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 and fund clearing. 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.

This is the end of the introduction on why banks apply for credit cards and do banks apply for credit cards? Have you found the information you need?