Credit card income model:

1. Explicit income - reflected in the direct profits obtained by banks through credit cards, mainly including:

1. Interest income;

2. Annual fee income;

3. Merchant rebate income or credit card rebate income: When a customer purchases something by swiping a card, the merchant must give a certain proportion of the transaction amount to the bank. This It is also the main part of credit card income. This part of the rebate is usually shared between the card issuing bank, UnionPay and the acquiring bank. It has been at a level of about 7:1:2 for a long time.

4. Cash withdrawal fees, punitive fees and some value-added service income: the former refers to the handling fee paid for withdrawing cash at the counter or ATM machine, which stems from the bank's purpose of promoting card consumption and preventing risks; the latter It refers to the penalty paid by the bank for excessive overdraft on a credit card, which is used by the bank to compensate for the risk losses caused to the bank due to the cardholder's default. These two parts account for a relatively small proportion of credit card income;

5. Other value-added service income: For example, the fees paid by cardholders to purchase goods and pay in installments are actually similar to turning interest income into an intermediary business. The essence remains unchanged, but it is conducive to expanding consumption and controlling risks;

2. Hidden benefits - mainly refers to the additional benefits that credit card business brings to banks, including locking accounts and funds, and collaboratively promoting other companies , private business, etc.

1. Lock accounts and funds: This is the most important hidden benefit. For example, a merchant uses a bank credit card to purchase goods, and installs a bank POS machine to allow customers to swipe cards to collect payments. At the same time, it also opens value-added services such as ordinary merchant installment (customers can directly swipe their card to pay in installments when buying things), point consumption and other value-added services. Then the business process of the merchant It will also be a process for banks to expand their accounts and collect funds.

2. Collaboratively promote other public and private businesses: Banks can use some functions of credit cards to provide support for other businesses, such as a certain bank's inter-bank repayment business and the purchase of financial products at over-the-counter POS machines. Business, bank-medical system, etc. (all kinds of cross-cutting applications are available in other banks).