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

They make their money from the other 99 percent of customers. The benefits are a loss leader- you give a little to incentivize purchases and let the chips fall where they may.