eli5 How do credit card companies make money out of people that pay their cards in full before the billing cycle and still get rewards?

Question

eli5 How do credit card companies make money out of people that pay their cards in full before the billing cycle and still get rewards?

In: 808

Answer 1

The transaction fee on the vendor – so, not directly from you but they still want as many people as possible using the card.

Possibly yearly fees.

They also sell your data along everyone else’s to other vendors.

Finally… they don’t make as much from you! But people who pay the balance in full as the extreme exception so they are okay with it.