How can banks get away with offering 2.5% or even 3% cashback cards?

Question

How can banks get away with offering 2.5% or even 3% cashback cards?

In: 0

Answer 1

Mostly due to the fact that many people don’t pay off their balance every month so they’re paying 15%+ of interest. Also, there is a transaction fee that stores are charged (sometimes businesses will pass that fee on to you directly but that’s derailing from the original question)