The difference between debit card and credit card rebates

Different overdraft permissions and different functional features.

1. Different overdraft permissions: A debit card is an ordinary savings card and cannot be overdrafted. After applying for a credit card, you can get an overdraft credit limit, which you can spend first and repay later.

2. Different functional features: The biggest function of a debit card is savings. You may earn interest by depositing money into a debit card. Credit cards cannot usually be used for deposits, and they cannot enjoy interest, and there are handling fees for cash withdrawals.

What does the "merchant rebate rate" of a credit card mean?

Merchant rebate rate refers to the rate of merchant rebate.

Merchant rebate is the fee that the merchant needs to pay to the bank when the cardholder chooses to use a bank card for settlement. It is the settlement fee paid by the special acquiring merchant to the card issuing bank and card issuing organization. It is a bank card A very important part of business revenue.

POS machines installed by merchants are generally provided by UnionPay Business or commercial banks (such as Industrial, Agricultural, Commercial and Construction Bank), and UnionPay sets different charging standards according to different industries.

Extended information

Since 2005, the rebate rate for the hotel and catering business has dropped from 3% to 2.2% to the current 1.8%, while the retail industry has dropped from 0.8% to 0.5%

According to a previous research report by ICBC, in the early stages of the development of the credit card business, annual fees and merchant rebate income accounted for the majority. When the business develops to a certain stage, interest income formed through asset business Gradually rise.

For example, in the United States, where credit card products are mature, interest income accounted for 25% of the entire credit card profit in the early stages of development, merchant rebates accounted for 30%, and the remaining 45% was attributed to annual fees and other income.

As the market matures, asset business has become the main source of credit card profits in the United States, with interest income accounting for 70%, and merchant rebates and other income each accounting for 15%.

However, the established model of credit cards has encountered difficulties in China. Between scale and efficiency, most domestic banks prioritize scale. The surge in the number of credit card issuances in the past few years is a result of "racing for territory". Directly reflected. The price of this "quick success" makes all the revenue models that were originally feasible at this stage invalid.