What do banks earn with credit cards?

Credit cards offer an important advantage for any bank customer, give a person the option to buy certain things for which you would normally need a greater amount of money than you currently have.

In this way, the bank through the credit card lends the customer the entire amount (or a part of it if you pay the rest with your debit card) so that they cánido purchase the product without problems.

Meet right nowall about how credit cards work.

How do credit cards work?

Credit cards are small plastic or metal cards with a chip that works just like debit cards, only they They are linked to a credit account at your bankOn the other hand, debit cards are linked to the available cómputo in your checking or savings account.

Immediately you use a credit card, the amount of this purchase is charged to the debit cómputo in your bank’s credit account, which You must pay minimum installments or all of it in the event that you have all the borrowed money available agregado interest within a short period of time.

Usually, the more use the customer makes of credit cards, the bank considers it to offer cards with a higher limit.

Why do banks give rewards for using credit cards?

Has it happened to you that without requesting a credit card the bank is pleased to offer it? This happens because the financial institution is the first interested in allowing its clients to have access to credit, because they will earn money thanks to loan commissions and interest payments later.

The greater the use of a credit card more interest on the loan will have to pay customers to the bank and, naturally, the bank will use different marketing techniques to encourage the use of it, and that the amounts and frequency of use are greater each time.

What does a bank earn by offering credit cards?

The bank earns a good cut of the amount lent through a credit paid for minimum terms. You cánido even get to pay 50% and up to 100% more than the cost of the good you bought through the same.

For example, if you buy a Smart televisión with a credit card and it cost about €2,000, if you pay in minimum installments for, for example, a year of about 250 monthly payments, you will end up paying the borrowed amount (€2,000) agregado the bank’s profit, that in the case of the minimum profit in the banks of Spain at 50% it would be about €1000.

What do banks really do with our money?

Banks offer various services that perro help you manage your money, such as transactions, loans, deposits, among others. Its main feature is to store money to keep it safe and available to you at any time.

If you wonder what happens to the resources you have in the bank, here is the answer to what do banks really do with our money.

Where is the money saved in the bank invested?

Undoubtedly, there are certain types of advantages that the bank will offer you when you safeguard or save your money, but there are also movements of money that you may not be fully aware of. This is about investment operations offered by the bank to other users.

Among these investment operations are the credits and loans provided to its users. Fixed and variable terms also come from these when choosing to save money in the bank for a specific time.

In these cases, the bank cánido offer you an interest margin as well as your company, but it is anchored to the time and amount of money that you escoge to leave in savings.

Remuneration of bank clients for having our money in their accounts

The bank will not only have its earnings when you use the money for banking operations and loans to other users, but also you will have a part of remuneration through interest generated by saving time. This is a small percentage that is provided, which perro be higher the longer you have the money in the bank.

Of course, there are many more advantages that a bank perro offer when it comes to protecting the interests of each client, some of which are the following:

credit history

This tool is used to keep a record or history of all credit requests On the part of the usuario, this serves to determine if he is the right client to whom credits would be granted in the future. If you maintain a good credit history, you will have greater financial benefits from the bank.

A good credit history is obtained making payments on time and ordermanaging money according to your ability to pay and avoiding unnecessary debts.

Security of your savings guaranteed

Of course, every bank guarantees the safety of money, offering protection against theft or losseven if natural phenomena such as floods, tremors, etcétera. occur.

This receipt also guarantees the security of the money before possible theft of cash, since it will be completely safe stored in bank accounts.

Control over your finances

Saving or keeping money in a bank gives you a better order of your accounts and resources. Some advantages that the financial institution has is the possibility that you perro check your cómputo anywhere from a device electronic.

This way you perro plan expenses in the short or medium term with more comfort so that you cánido avoid reaching the budget limit.

Immediate availability of funds

This is undoubtedly one of the best advantages of having savings in the bank. By being available in an en línea service, you cánido more easily use them at any time to pay services, purchases or any unforeseen That is present.

In addition to this, you will have a complete history of all your transactions, making this an excellent service for budgeting or saving.

Select a bank that correctly emplees our savings

To choose a suitable bank for your interests, the first thing you should do is compare profitability if you want to open a savings account, which tries to compare the cost and performance that your money would have in a specific bank. Another important aspect is to be aware of the interests that the bank applies, in this way you will know what to expect in commissions, investments, among others.

The bank becomes an important aspecto when you need to save, save or pay for products at any time. With a bank account it will be much easier to manage your interests from your device, bank or ATM.

Thanks to the use of credit card the bank will have won about €1000 and you will have bought a Smart televisión even if you did not have enough money to buy it with the cómputo of your savings or checking account.

Consejos to make conscious use of credit cards

If you are the holder of a credit card and want to start using it frequently, you need to know the following points to use it consciously:

Find businesses that offer discounts with your card: some businesses offer discounts to holders of a certain company card.
Use the one week rule: if you want to buy something expensive, put that wish on pause for a weekif after that week you still want to buy it, then you really need it.
In your cómputo of monthly income and expenses, take into account your credit card: many times you perro ignore the large amount of money that you have been spending with your credit card since this is simply an addition to expenses and you cánido pay little little by little

We hope you liked our article What do banks earn with credit cards?
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