- Green Member
- Posts: 16
- Joined: Thu Jan 31, 2013 10:00 pm
- Location: Kansas City, KS
So I've been wondering lately, how are credit card revenues split up? Let's take for example the Marriot Rewards Premier Visa Signature card that's issued by Chase. As far as I can see, there are three different players involved - Chase as the lending bank, Visa as the network, and Marriot as the branding and rewards program.
According to my understanding, there are two different ways to make money off of credit cards, swipe fees, the % of purchase charged to the merchant, and interest fees charged to user for carrying balance.
The question is how is that revenue broken down into the three parties? The obvious answer for me appears to be that the network takes all the swipe fees and the bank takes all the interest fees - but that doesn't seem realistic. What then entices a bank to lend to someone that they know is going to pay off the balance in full each month - and then the branding partner also ends up with nothing? I'm sure the actual answer is it's negotiated but I'm curious if anybody has any insight? Thanks!
American Express Zync ~ NPSL
American Express Everyday ~ $2000
Bank of America Travel Rewards ~ $1500
Chase Freedom ~ $2500
AU Capital One Venture One ~ $5000