Have you ever wondered why banks have such an interest in you to pay by the card, and why they offer interest-free period on credit cards? In this article you can read an exclusive behind the scenes details of the bank profitable model.
Commissions on each trade
Did you know that for each payment card, made by the trader, the trader must pay? Yes, it's true! Merchants Bank pay contractually agreed commission. The amount of commission is determined individually and is related to the turnover of a particular trader. Another commission will pay the bank boutique owner, another chain store. Commissions can be up to 3% of paid amount. Has the dealer margin under three percent, it gets due to a debit card payments. Banks offer to holders of its various discount cards and loyalty programs for business partners. The aim is to motivate clients to card transactions.
Did you know that for each payment card, made by the trader, the trader must pay? Yes, it's true! Merchants Bank pay contractually agreed commission. The amount of commission is determined individually and is related to the turnover of a particular trader. Another commission will pay the bank boutique owner, another chain store. Commissions can be up to 3% of paid amount. Has the dealer margin under three percent, it gets due to a debit card payments. Banks offer to holders of its various discount cards and loyalty programs for business partners. The aim is to motivate clients to card transactions.
For what and whom merchants pay?
Part of the commission covers the cost of installing and operating a payment terminal, the cost of operation can be further offset the cost of maintenance of IT systems, investment in innovation, safety, staff costs, call center operations, sending statements, etc. Part of the fee goes well card associations. The most famous associations are VISA, MasterCard , Maestro, Amecican Express and Diners Club .
Part of the commission covers the cost of installing and operating a payment terminal, the cost of operation can be further offset the cost of maintenance of IT systems, investment in innovation, safety, staff costs, call center operations, sending statements, etc. Part of the fee goes well card associations. The most famous associations are VISA, MasterCard , Maestro, Amecican Express and Diners Club .
Maintenance fee and interest on drawing
So far, the talk about credit cards, i.e. cards that are linked to your current account and will not let you into the red. The credit card can, in addition to commissions on transactions capitalize on other things.
So far, the talk about credit cards, i.e. cards that are linked to your current account and will not let you into the red. The credit card can, in addition to commissions on transactions capitalize on other things.
The first is the interest on the amount drawn on non-interest period. Today, most banks for credit card offers 45 day to 50 day grace period, which period the bank counted differently.
Interest on drawing on a credit card, after the grace period is between 17 to almost 30% payment.
The interest may (but need not) added monthly maintenance fee.
Fees are usually around 45 to 60 USD, which as well as the interest-free period depends on the policy of the bank. In the case of active use of the card, however, we commonly encounter with forgiveness of the monthly fee. For example, turnover approx 3000 USD in a given month, for some banks, the reason for the abandonment of charging management fees or require a refund fee.
How to avoid overage charges?
Credit card is intended for short-term loss of income coverage, the re-drawing for payments over the internet. In foreign, it is as credit card preferred over conventional.
Credit card is intended for short-term loss of income coverage, the re-drawing for payments over the internet. In foreign, it is as credit card preferred over conventional.
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