The income from bank credit cards mainly comes from the following points: 1. Annual fee. After the credit card is opened, the bank will charge the cardholder an annual fee.
However, due to the fierce competition in the bank credit card market, most banks will have a policy of waiving annual fees for card swiping.
This encourages the use of credit card consumption, and the bank can charge other large profits.
2. Credit card swiping fees and merchant rebates
Every time we use a credit card to make a purchase, we need to pay a certain amount of handling fees, but most of this part of the money is borne by the merchant.
But this is only a small part. The rebate from card swiping is the real "treasure pot".
When we make a purchase with a card at a merchant, the merchant has to pay a certain proportion of the transaction amount (around 0.5~0.7) to the bank. This money is mainly shared by the card issuing bank, UnionPay and the acquiring bank.
Among them, the credit card issuing bank will charge between 0.36 and 0.48, and the specific bank will be different.
3. Interest
This is also the main source of bank credit card business income.
Everyone knows that you do not need to pay interest on credit card purchases after the full payment on the repayment date, otherwise you will be charged high interest, which is generally charged at 0.05/day, and interest is calculated on a daily basis. Compound interest monthly.
The longer the overdue period, the more money the bank makes.
4. Installment fee
When the cardholder fails to repay the bill in installments, he will need to pay a certain installment fee.
The installment handling fees of each bank are different, but basically the handling fee rate for each installment is around 1. The more installments, the lower the handling fee rate.
Special attention: For many bank credit cards, after choosing installment, even if you repay in advance, you still have to pay the handling fee in full. Therefore, it is not cost-effective to repay in installments!
5. Other income
There are many hidden charges for bank credit cards, such as cash withdrawal fees, loss report fees, SMS function fees, etc.
So, how much money do banks make?
By estimating each item, we can roughly know how profitable bank credit cards are!
1. Merchant rebates for credit card purchases
Calculated based on the total bank card credit amount being 14.69 trillion, the credit utilization rate being 45.03, and the credit card issuer charging an average of 0.40.
As of the end of the third quarter of 2018, the revenue of this block was: 14.69 trillion × 45.03 × 0.40 = 26.459 billion yuan.
2. Interest income
The total amount of credit cards that are overdue for six months is as high as 88.098 billion yuan. This part alone will generate 44.04 million yuan of interest income every day (daily interest rate 0.05). In the third quarter, there were 11.89 billion yuan.
Not to mention those that are only a few days or a month overdue, it is estimated that the bank can earn at least tens of billions in interest income every year!
3. Installment fee
We use 10% of the total credit usage as the base for credit card installment repayment. Each installment has a handling fee of 1. If divided into 6 installments on average, the entire income will be : 14.69 trillion × 45.03 × 10 × 1 × 6 = 39.689 billion yuan.