Profit model of credit card business:
Interest income i.e. interest paid by the cardholder on outstanding credit card balances.
Information exchange income i.e. fees paid by the acquirer to the card issuer as a percentage of the transaction amount of the authorized merchant; cardholder annual fee i.e. fees paid by the cardholder to the card issuer for the right to use the credit card; and other fees and income i.e. including fees and income generated from various other credit card services.
Charge merchant rebates are fees charged by acquirers to merchants for providing transaction processing and assuming credit risk; and deposit interest earnings are interest earnings on deposits from the deposit accounts of merchants.
Other income i.e. income from leasing of POS and card presses etc. Of the profit from the credit card business, 78% comes from credit interest income, 10% from interchange fees, 2% from annual fees, 4% from cash withdrawal fees and 6% from late payments and other income.
Expanded Information
Credit Card Features:
1. Pre-deposit of cash is not encouraged, spending first and repaying later, enjoying interest-free repayment period, repaying in installments on its own (with minimum repayment), joining international credit card organizations such as VISA, Master Card and JCB for global use.
2. It is one of the fastest-growing financial services today, and it is a kind of electronic money that can replace the circulation of traditional cash within a certain range.
3, both payment and credit functions. Cardholders can use it to buy goods or enjoy services, but also through the use of credit cards from the card issuer to obtain a certain loan.
4, is the financial services and computer technology in one of the high-tech products.
5, can reduce the use of cash money.
6, can provide settlement services, convenient shopping and consumption, and enhance the sense of security.
7, can simplify the collection procedures, saving social labor.
8, can promote the sale of goods, stimulate social demand.
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