Credit cards make money for the credit card companies through the interest and fees that are charged.
When you use a credit card you are charged interest on the money that you spend and if you only make the minimum payments then the credit card company makes lots of interest on that money owed.
Multiply that interest by millions of customers and the credit card companies get very rich off of those interest charges.
Also some credit card companies charge annual fees and make more profit that way as well.
Credit card companies make money from interest, processing fees and fees charged to individual cardholders.
And it's not only cardholders who have to pay to use credit cards: Merchants pay for the privilege to accept credit cards at their businesses.
Credit card companies make money by collecting fees.
Out of the various fees, interest charges are the primary source of revenue.
When credit card users fail to pay off their bill at the end of the month, the bank is allowed to charge interest on the borrowed amount.
Some of the best credit cards are.
Best cash-back credit card: Chase Freedom Unlimited® Card.
Best rewards card: American Express® Gold Card.
Best travel card: American Express® Gold Card.
Best credit card welcome bonus: Chase Sapphire Preferred® Card.
Best no annual fee credit card: Citi® Double Cash Card.
The easiest credit cards to get are.
HSBC Visa platinum card.
HDFC Regalia credit card.
HDFC Bank diners club rewards card.
SimplyCLICK SBI card.
Axis Bank Neo credit card.
AmazonPay ICICI Bank credit card.
SBI Card Elite.
Before using your first credit card, here are some tips to guide you along the right path.
Set a Budget.
Keep Track of Your Purchases.
Set Up Automatic Payments.
Use as Little of Your Credit Limit as Possible.
Pay Your Bill in Full Each Month.
Check Your Statement Regularly.
Redeem Rewards.
Use the Extra Perks.