Every time people use their credit cards, the bank has to send the money to the merchant at some point. Most people pay their CCs at some point but while the banks wait for that, how are they able to credit the merchant?
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The interest rate on credit cards is among the highest among all common financial products.
If the bank can just pay the merchant from their current cash reserves they will, but if they need to borrow from another bank to do it they still come out way ahead because the interest the credit card owner is paying on their loan from the bank is *far* higher than what the bank is paying another bank to borrow the money. So, either way, as long as you pay your balance + interest *eventually*, the bank comes out way ahead.
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