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

To put things in perspective, any business in America that sees at least 50% of their sales in credit will pay at minimum, $1,000 a month to credit card companies.

For a typical small, local restaurant, that little 3% processing fee actually ends up being 10-30% of your overall profit…