General commercial banks mainly rely on the interest rate difference between deposits and loans as their main source of income. Credit card income accounts for a large proportion of intermediary business income. Credit card cash withdrawals and consumption all charge certain handling fees.

As the main business of banks, credit cards can create huge profits for banks. In addition to common income such as merchant rebates, penalty interest, and handling fee income, there are many reasons why banks like people to use credit cards.

1. Increase the number of customers

Customers are the bank’s greatest resource. Customers can both provide deposits to banks and have loan needs. The large-scale issuance of credit cards is conducive to increasing the number of customers, especially establishing connections with brand new customers.

2. Understand the consumption habits of cardholders

Why Taobao can push you products you are interested in every time is because it relies on big data. Credit card consumption records are also a big data. As long as data mining is performed, consumers' living environment and consumption concepts can be roughly seen. As long as you master this core information, you can conduct effective sales. If the bank can identify in advance credit card holders who spend gas every week, and then assign the list to its subordinate car loan departments for sales reference, the response rate can be significantly improved.

3. Establish long-term customer relationships

As one of the unsecured loan products, the attributes of this product determine that it can ideally establish a relationship with customers. a long-term relationship. This can improve customer loyalty and stickiness to a certain extent.

In fact, in the credit card game between you and the bank, you are at a relative disadvantage. The main reason is that there is an information asymmetry between you and the bank.

In order to avoid getting into trouble due to ignorance, we must evaluate whether we need it before applying for a credit card. Credit cards are suitable for people with stable income and strong self-control. Otherwise, what seems to be a convenience will actually become a burden for you. Credit card, also called credit card. It is a non-cash transaction payment method and a simple credit service. The purpose of banks issuing credit cards is to make money, and credit cards are equivalent to bank loans. So it wants more people to use credit cards.

Of course, if you control your desires well, you can also get money on your credit card.

1. Interest-free period. The interest-free period is generally about 20-50 days. During this period, you can use your credit limit for free. If you want to make money, you must pay back the money on time.

2. Various offers and discounts. You can buy the same thing for less money, which is pretty good, right?

3. Points. Points can be used to redeem items on the official website.

Credit cards will bring benefits to banks, which are reflected in the direct benefits that banks obtain through credit cards, mainly including: interest income, annual fee income, merchant commission income, and installment procedures. Fee income, cash withdrawal and punitive fee income and some value-added service income.

1. Interest income

Simply put, it is the interest paid for overdrafting the credit limit, which is the main part of credit card income.

Some customers will be unable to repay in full on the repayment date. The bank has set a minimum repayment amount and set interest and late fees for non-repayment, thereby increasing its own revenue. The unique "interest compounding" model of credit cards makes their interest no less than that of loan sharks. However, last year, the country abolished late payment fees on credit cards and replaced them with liquidated damages, which relieved the pressure on repayers to a certain extent. However, even so, credit card fees The interest rate is still very amazing.

According to bank regulations, for credit cards, "consumption first, repayment later" and overdraft are important features. For debit credit cards, "deposit first, then spend". However, on the premise that it is determined to be a bona fide overdraft and repayment is guaranteed, cardholders are also allowed to overdraft an appropriate amount within a short period of time when they are in urgent need of funds. Overdraft interest is generally much higher than that of bank loans in the same period, and card issuers have a complete set of measures to prevent and pursue overdraft risk losses.

Credit card overdraft interest will be calculated at a daily interest rate of 0.05% within 15 days from the date of signature or bank accounting (including the current day), and a daily interest rate of 10% for more than 15 days. 30 days or if the overdraft amount exceeds the prescribed limit, the daily interest rate will be calculated at 15%. Overdraft interest is not calculated in stages, but is calculated based on the highest interest rate bracket for the final term or the maximum overdraft amount.

2. Annual fee income

A certain management fee is charged every year for using the card. Nowadays, most of our domestic credit card annual fees are less than 300 yuan, which can be reduced as long as the conditions are met. There are also some high-end credit cards that have annual fees of up to 2,000 yuan or more because they provide special high-end services, and the conditions for them to waive annual fees are also very strict.

3. Rebate income from card swiping

When a customer purchases something by swiping a card, the merchant must give a certain proportion of the transaction amount to the bank. It is the commission that the bank collects from the merchant, and it is also the commission that the bank The most important and stable means of profit. This part of the rebate is usually shared by the card issuer, UnionPay and the acquirer.

4. Bill installment fee income

If you cannot pay off the monthly bill at once, then installment repayment comes in handy, and the installment fee is also currently the bank's One of the most important incomes.

Many banks charge a one-time fee for credit card bill installments, and this fee will be included in the next bill. Different banks have different charging standards for credit card bill installments. In addition, the different number of installments will also lead to different handling fee rates.

5. Cash withdrawal income and punitive income

The former refers to the handling fee paid for withdrawing cash at the counter or ATM machine, which originates from the bank's purpose of promoting card consumption and preventing risks; the latter The penalty refers to the penalty paid by the bank for excessive overdraft on the credit card, which is the bank's purpose 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 revenue.

If you deposit your own money into a credit card and then withdraw cash, you will also have to pay this fee. If there is no balance in your credit card and you withdraw cash overdraft, in addition to paying the handling fee, you will also need to pay 0.05%/day interest.

6. Income from other value-added services

For example, fees paid by cardholders for purchasing goods and making installment payments are actually similar to turning interest income into an intermediary business. The essence remains the same, but It is conducive to expanding consumption and controlling risks.

In addition, credit cards also bring hidden benefits to banks, which mainly refers to the additional benefits that credit card business brings to banks, including locking accounts and funds, and collaboratively promoting other public and private businesses, etc. .

Because we can’t borrow money, only credit cards can help with emergencies.