How do credit card companies make money?

Credit card companies generate revenue through various sources. The most common way for credit card companies to make money is through fees and interest rates. Companies may charge an annual fee in order to keep the card open, as well as fees for late payments, missed payments, or exceeding the credit limit. Additionally, companies charge interest on any balance that is not paid off in full at the end of the billing cycle. Another way credit card companies make money is through interchange fees. Interchange fees are the costs that merchants must pay when a credit card is used. These costs can vary based on different factors, such as the type of card or merchant. Credit card companies typically receive a percentage of the interchange fee that merchants are charged. Finally, credit card companies also profit from cash advances and balance transfers. When customers take out a cash advance or transfer a balance from one card to another, companies charge a fee for the service. In addition, the company may charge a higher interest rate on these transactions. Overall, credit card companies make money through various sources. From collecting fees and interest rates to interchange fees and cash advances, companies are able to generate substantial revenue that allows them to stay in business. In Georgia, credit card laws are in place to help protect consumers from unfair and deceptive practices.

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How do credit card companies make money?

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