💰 Who Really Pays for Your Credit Card Rewards? | Econ 101
Who really pays for your 2% cash back?
Every time you swipe your credit card, money changes hands long before your rewards hit your account. In this episode of Econ 101, Kevin Thompson breaks down where merchant fees go, how banks and payment processors make billions, and why your airline miles and cash back aren't actually free.
Topics covered:
How credit card transactions work
What interchange fees really are
Why merchants accept credit cards
Who ultimately pays for rewards
Why carrying a balance can erase any benefit from cash back
If you've ever wondered how banks can afford to hand out…
The skinny
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