Comment by plant-ian
15 days ago
As I understand it the cc company takes the fee money from the buyer and it's usually more than the cash back and gambles with it until they give some cash back to the buyer and then pockets the rest. If you have millions of those transactions taking place then you have a huge pool of gambling money available. They also hold the sellers money for a while usually longer than necessary to also boost that pool. Edit: a less cynical view is that you are essentially loaning that money to the credit card company and then it pays you back but it keeps the interest
//Edit: a less cynical view is that you are essentially loaning that money to the credit card company and then it pays you back but it keeps the interest
It's literally the opposite. The credit card lends you money for free - if you pay your bill every month.
That's the "credit" in "credit card" - they are extending a line of credit to you, not the other way around.