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

Also, its a numbers game. I set ALL my rewards cards to “autopay” so I never miss a payment. However, the interest rates on “rewards” cards are typically so high that a single missed payment can “make up” for a heck of a lot of rewards.

Basically, the amount of people that don’t pay in full is enough to make money, in addition to the other fees people have described.