How do credit card companies afford to “give cash back”? Like how does the process work?
In:
If a bully steals $5 from you and gives you $1, he technically gave you “cash back”.
Card companies often make money because people get in debt and can’t pay it off, having to pay late fees and interest. Vendors who accept cards as payment also have to pay a small percentage to the card company for the convenience of accepting the payment. Very few people out there aren’t paying any interest on their credit card debt.
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