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CC Question

C

chuckywang

Lifer
How do credit card companies make so much money? I don't pay anything extra to use my credit card, so the company is not making anything off me.

😕
 
cc companies charge a minimum of 50 cents per sale. mulitply that by 2.3 gazillion, and you have a lot of money.
 
Originally posted by: PowerMac4Ever
Originally posted by: chuckywang
Originally posted by: Yossarian
they make a percentage off every sale.
Click to expand...

but i don't pay anything more than what businesses charge me.
Click to expand...
The business still gets charged 2% or so for each sale.
Click to expand...

Ah, so the stores pay to be able to accept credit cards knowing it will increase their business. If it's 50 cents per sale plus 2%, that's kinda hefty IMO. It's a wonder how businesses make money at all.
 
they just increase the base price.

you're not a business major are you? 😉

ever been to a shady business and wonder why they don't accept CCs? Or you'll see a sign saying there CC purchases require a mininum purchase amount?
 
Originally posted by: chuckywang
Originally posted by: PowerMac4Ever
Originally posted by: chuckywang
Originally posted by: Yossarian
they make a percentage off every sale.
Click to expand...

but i don't pay anything more than what businesses charge me.
Click to expand...
The business still gets charged 2% or so for each sale.
Click to expand...

Ah, so the stores pay to be able to accept credit cards knowing it will increase their business. If it's 50 cents per sale plus 2%, that's kinda hefty IMO. It's a wonder how businesses make money at all.
Click to expand...


no way it's 50 cents a sale.

but the real money comes from interest on the trillions of $$ of credit card debt of stupid people.
 
One thing that I've been told is that you should always use your credit card at walmart just for the fact that they DO get charged and it's the least you can do for them screwing over the little guy all the time! 🙂

~SV~
 
Because 90% of the people w/ CC only pay off the interest. You know, the ones who buy killer gaming systems, A/V stuff, beer, beer, and more beer.
 
Now you know why a lot of places wont take American Express. American Express usually charges merchants a higher percentage of the sale price than Visa and Master Card.

And example is where I work. The restaurant takes away 3% of our charge tips because that is about what the credit card fee is.
 
No, the real money comes from the transaction fee.

The transaction fees charged to the vendor are usually around 2%-5% of the purchase price.

Note, how the majority of sales now are on credit card, now imagine making 2%-5% pure profit on everything sold on credit card which is a lot. You know how much money that is? You would be surprised how many people pay their credit card off each month. A huge portion of credit card profits is them charging the vendors 2-5% of each credit card purchase.
 
It can't be as high as $.50/sale, but it is 1-2% on each sale.

They make it from the money they charge the seller on each sale, interest to people who don't pay off balances, and extra charges (late fees, over account fees, etc.), the latter category alone netting them $24B last year (do the math and you'll see that people are morons).
 
Originally posted by: Skoorb
It can't be as high as $.50/sale, but it is 1-2% on each sale.

They make it from the money they charge the seller on each sale, interest to people who don't pay off balances, and extra charges (late fees, over account fees, etc.), the latter category alone netting them $24B last year (do the math and you'll see that people are morons).
Click to expand...

The credit card fee on average is a lot higher than 1-2% of each sale. More like 2-5%
 
It costs about $50 a month plus 5-7% of purchases for a merchant credit account, depending on what kind of volume you do and what kind of deal you can make with the bank holding the card accounts.
The credit card company also makes a revolving %age on cardholder's debt.
It costs you plenty in the way of elevated prices, I guar-on-tee.
 
Retail sales in 2004 were over 4,000,000,000,000. About 80% of retail sales are paid on credit card, now what is 2-5% of that?

64 to 160 billion is made just off the 2-5% charged to merchants.
 
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