Credit cards generate more profit per dollar of assets than any other banking product. The industry collects revenue from three streams simultaneously: interest charges ($130 billion annually), interchange fees ($100+ billion from merchants), and penalty fees ($12 billion in late fees alone). This triple-revenue model means someone is always paying — usually everyone.

The minimum payment trap is the industry's masterpiece. Minimum payments are calculated to maximize interest revenue, not to help you pay down debt. On a $5,000 balance at 22% APR, the minimum payment of $100/month means it takes 9.5 years to pay off and costs $6,432 in interest — more than the original balance. The card company makes more from your debt than you spent.

Reward programs are funded by merchants through interchange fees (1.5-3.5% of every transaction). Merchants raise prices to cover these fees, which means everyone pays more — including people who pay with cash or debit. Rewards programs are effectively a wealth transfer from people who can't qualify for premium cards to people who can.

Credit card companies employ thousands of behavioral scientists. The physical card is designed to feel premium. The "tap" sound triggers a micro-reward. The billing cycle is calibrated so the pain of payment is maximally separated from the pleasure of purchase — typically 25-55 days.

Credit limit increases are offered proactively, not because you need more credit, but because higher limits increase spending by 10-15% on average. The "pre-approved" language creates a sense of being selected and special when it's actually a mass-market algorithm identifying who will generate the most interest revenue.

Balance transfer offers with 0% APR for 12-18 months seem generous until you learn that 56% of people don't pay off the transferred balance before the promotional period ends, at which point the rate jumps to 20-28% — often retroactively applied to the entire balance.

When you tap your credit card, the merchant pays 1.5-3.5% to a chain of intermediaries. On a $100 purchase: $2.50 might go to your card's issuing bank, $0.15 to the card network (Visa/Mastercard), and $0.35 to the merchant's payment processor. The merchant keeps $97.

This fee is invisible to you but embedded in every price you pay. Merchants can't easily refuse cards (customers would leave) and aren't allowed to charge different prices for card vs cash in most agreements. So they raise all prices to cover card fees. Cash customers subsidize card rewards.

Visa and Mastercard operate as a legal duopoly processing 80% of card transactions. Their interchange fees have increased over the past two decades despite technology costs dropping. The DOJ has described their fee-setting as "price-fixing in all but name."