Why banks pay you to use their credit cards

Interchange, not lending, is the real engine of US credit card profitability, and rewards competition makes mid-tier credit customers chronically unprofitable.

• Four revenue levers: Credit cards earn via net interest, interchange, fees, and marketing contributions — not primarily by selling customer data.
• Interchange funds rewards: Business travelers' interchange spend was so lucrative issuers rebate it back as airline points/cashback, making loyalty programs 'worth strictly more than the airlines themselves.'

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