WHY DO BANKS DEVALUE CREDIT CARD?? || WHO PAYS FOR THE REWARDS??

[blackjack_backjack]

I was wondering why do banks devalue their credit cards in terms of rewards? I've heard that merchant pays the 2-3% fees, from which banks give us the rewards. then who do they devalue cards if the merchant is paying for the rewards

 

[Neeraj920]

Earlier banks used to earn profits 18-20% from their credit card section, but due to wisely used by customers, their profit earnings have reduced and now its like 16%, and that's why they devaluing the cards. Especially they spending money in Lounges and other high end rewarding cards. Customers are paying dues on time which has significant cause of the reduce in their profit margins.

 

[blackjack_backjack]

Earlier banks used to earn profits 18-20% from their credit card section, but due to wisely used by customers, their profit earnings have reduced and now its like 16%, and that's why they devaluing the cards. Especially they spending money in Lounges and other high end rewarding cards. Customers are paying dues on time which has significant cause of the reduce in their profit margins.

do you think say imagine an ideal world where everyone starts paying their bills on time, will banks just stop giving out credit cards?

 

[abhimarda]

do you think say imagine an ideal world where everyone starts paying their bills on time, will banks just stop giving out credit cards?

Banks are in business to make profits and not charity. The day they don't make money on any particular product and they view that can't make profit on it in future, they will stop. The needs will be substituted by some other product. Like Traveller's cheque got substituted by Debit/credit cards.

 

[Skylar]

I was wondering why do banks devalue their credit cards in terms of rewards? I've heard that merchant pays the 2-3% fees, from which banks give us the rewards. then who do they devalue cards if the merchant is paying for the rewards

Credit cards are being devalued primarily due to exploiters who take advantage of rewards and cashback cards by transferring funds from the card to their bank accounts.

Individuals such as Arindam Paul, Vineet Sureka, and even Bekifaayati, who discuss credit card potential loopholes on YouTube exploit the rewards system, inadvertently impact those who genuinely use credit cards.

 

[Skylar]

And also, business owners who use personal credit cards for business transactions.