How to make money with credit cards

Sources of bank credit card income:

Annual fee income: We all know that bank credit cards will charge annual fees as long as they are opened. , but the competition in the bank credit card market is also fierce now. Most banks have a policy of waiving the annual credit card fee for a certain number of credit card transactions (or a certain amount). This encourages the use of credit card consumption, and the bank can charge other large profits!

Credit card processing fees and merchant rebates: Every time we make a purchase with a credit card, we need to pay a certain amount of processing fees, but most of this part of the money is borne by the merchants. But this is only a small part, and the card rebate is the real “treasure pot”. When we swipe a card at a merchant to make a purchase, the merchant has to pay a certain proportion of the transaction amount (about 0.5~0.7%) to the bank. This money is mainly shared by the card issuer, UnionPay and the acquiring bank. Among them, the credit card issuing bank will charge between 0.36% and 0.48%, and the specific banks are different

Instalment fees: Installment fees are now also a key business promoted by banks, because this makes money really fast , and very fat. Currently, banks with credit card business will basically provide installment business, with installments ranging from 2 to 36 months, and the handling fee for each installment ranging from 0.55-0.99%.

Liquidated damages: If you fail to repay the bill after it is due and do not repay it for a long time, in addition to overdraft interest, you will also face liquidated damages and penalty interest. Although this is not the main income of the bank, it is For a big bank, it would probably be several hundred million.

How do banks make money by issuing credit cards?

1. Card swiping fees. Card swiping fees are also called "card swiping commissions" and are currently the most important source of profit for domestic banks' credit card business. When a cardholder completes a transaction by swiping a credit card at a merchant, the merchant has to pay a cost, the so-called card swiping fee.

2. Interest income. Interest income, which we often call "penalty interest income", is also an important source of profit for banks in the credit card business. When the cardholder fails to repay the loan on time, it will be recorded as overdue, and the bank will charge interest

The hidden dangers caused by idle savings cards are first of all the fee deduction issue. Some bank savings cards require annual fees or There is a small management fee. If there is still change in the debit card, the bank will keep deducting the fee until the amount is overdue. Secondly, a lot of personal information is registered when opening a bank card account, such as name, address, mobile phone number, ID number, etc. If the debit card is not used for a long time and is not canceled, it can easily be used by criminals, resulting in the theft of personal information.

The hidden dangers caused by idle credit cards. Credit cards are different from debit cards. They are closely related to the cardholder's personal credit report and require special attention. Most credit cards charge an annual fee, and some credit cards even charge an annual fee even if they are not activated. Therefore, credit cards that are idle for a long time can easily cause annual fee arrears, which will affect personal credit.

After receiving a customer's request to cancel a credit card, the bank will usually process it within a certain period of time. During this process, the bank will check whether there is any debt on the credit card and whether the customer's debt has been settled, etc. Generally, this cycle of banks is about 45 days. The bank will handle the card cancellation procedure for the cardholder only after confirming that the cardholder does not owe money.

For the sake of safety when canceling a credit card, it is best for customers to call the bank’s customer service number about 40 days after canceling the card to confirm whether their account has been successfully canceled to avoid future troubles.

Account cancellation standards of major banks

1. Industrial and Commercial Bank of China: If the customer’s account does not have online banking, withholding and collection services, and the average daily balance is less than 300 yuan, the account will be closed. The bank will automatically deduct a management fee of 3 yuan per quarter and an annual fee of 10 yuan. If the balance is deducted, arrears will occur. If the balance is arrears for one and a half years, the bank will automatically cancel the account.

2. China Construction Bank: Accounts that have not been used for more than 3 years and have a zero balance cannot be used normally. If customers want to use them, they need to activate them at the account opening outlet. Currently, we have not received any notification from the head office that the account will be automatically closed. If necessary, customers can go to the branch to cancel the account by themselves.

3. Agricultural Bank of China: If the customer's account balance is zero and has not been used for one and a half years, the bank will automatically convert the card to a "sleep account" and can no longer be used. If it is not used for 5 years, the bank will automatically close the account.

How to make money with bank credit cards? What are the sources of income?

1. Annual fee:

Annual fee income was a high proportion of fixed income source before 2005, once reaching about 55% of credit card income. However, many banks have no annual fee policies, which makes the proportion of annual fee income show a downward trend year by year.

2. Merchant commission:

When a customer purchases something with a credit card, the merchant must pay a certain percentage of the transaction amount to the bank, which is also the main part of the credit card revenue. A person in charge of the credit card center of a commercial bank revealed to reporters: "According to the default regulations of trade associations and UnionPay, there is a fixed standard for the handling fees charged to merchants for credit card purchases at POS machines."

3. Interest:

Interest is composed of cash withdrawal fees, cash withdrawal interest, minimum repayment interest, etc., and accounts for a very important part of credit card income

4. Cash withdrawal and punitiveness:

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 refers to the fees for excessive credit card overdrafts. The penalty paid by the bank is 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.

5. Other value-added services:

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 the same, but It is conducive to expanding consumption and controlling risks.

What is the profit model of credit cards?

1. Loans,

2. Banking insurance

3. Sales of wealth management fund products,

4. Financial equipment Sales,

5. Financial intelligent terminal business consumption profit,

6. Hedging business,

7. Bill business, etc.

The profit ratio of most banks in China is: 30% from loans, 10% from bank insurance, 10% from sales of financial fund products, 5% from sales of financial equipment, and 30% from consumption of financial intelligent terminal businesses. %, hedging business 5%, bill business 10%, etc.;

The profit ratio of foreign banks is: loans 15%, banking insurance 15%, sales of wealth management fund products 15%, sales of financial equipment 10% %, financial intelligent terminal business consumption profit 35%, hedging business 5%, bill business 5%, etc.

Banks are the product of a commodity currency economy that has developed to a certain stage. Its emergence is roughly divided into three stages:

1. The emergence of currency exchange industry and exchangers.

2. With the addition of currency custody and payment services, the currency exchange industry has evolved into a currency operation industry.

3. Concurrently engaged in currency custody, collection and payment, settlement, lending and other businesses. At this time, the currency exchange industry developed into the banking industry.

Extended information

Article 2 "Commercial banks" as mentioned in this Law refer to institutions established in accordance with this Law and the "Company Law of the People's Republic of China" to accept deposits from the public and issue Corporate legal persons that handle loans, settlement and other businesses.

Article 3 Commercial banks may engage in some or all of the following businesses:

1. Taking deposits from the public;

2. Granting short-term, medium-term and long-term loans;

3. Handle domestic and foreign settlement;

4. Handle bill acceptance and discount;

5. Issuance of financial bonds;

6 , agency issuance, agency redemption, and underwriting of government bonds;

7. Buying and selling government bonds and financial bonds;

8. Engaging in inter-bank lending;

9. Buying and selling , acting as an agent for buying and selling foreign exchange;

10. Engaging in bank card business;

11. Providing letter of credit services and guarantees;

12. Acting as an agent for payment collection and payment Insurance business;

13. Provision of safe deposit box services;

14. Other businesses approved by the banking regulatory authority of the State Council.

The business scope shall be stipulated in the commercial bank's articles of association and shall be submitted to the banking regulatory authority of the State Council for approval. Commercial banks may engage in foreign exchange settlement and sales business with the approval of the People's Bank of China.

Article 4 Commercial banks shall take safety, liquidity and efficiency as their operating principles, implement independent operations, bear their own risks, be responsible for their profits and losses, and exercise self-discipline.

Commercial banks conduct business in accordance with the law and are not subject to interference by any unit or individual.

A commercial bank shall bear civil liability independently with all its legal person property.