Credit is like a OD limit.. you can use it to your card limit. Interest is earned for every payment

Credit is like a OD limit.. you can use it to your card limit. Interest is earned for every payment remaining overdue..

 

then no point having a credit card in the first place.. (some people, like me, just like to have a credit card.. just in case.. (and yes, most people often don't use their cc limits either

 

There is yearly subscription charge and many other hidden charge there

 

It actually earns on ur default and the annual fees levied on card

 

Banks earn through merchant and transaction fee. Fo ex, if u pay rs 1000 using ur card then the shopkeeper does not get 1000. He gets around 970-990 depending upon bank and card issuing company(Visa, Master,Rupay). Remaining amount is shared between card issuing company and bank.

 

it's not only earning by credit card but when you pay through CC, it becomes a loan given by bank and hence it enhances the Asset profile of the bank. Same enhanced profile is portrayed in share market and by other rating agencies. Good profile earns good market value.