Banks make so much money on transactions, they even came out with new “incentive” programs a few years ago, targeted at purchasers.
Already charging vendors 3-5% for each credit card transaction, they then began incentives to increase credit card purchases, offering government agencies a 1-1.5 % kickback for making purchases via credit cards (P-Cards), as opposed to the normal standard of net 30 payment terms.
No, I don't think banks make most of their money on “interest rates”.
They make steady money on the volume of transactions between their “customers”, both the buyers and sellers of tangible products.
There is even a built in legal clause banks have engineered against merchants who already pay bank fees to process credit/debit cards.
No discounts can be offered for cash transactions.No premiums or handling charges can be made for credit/debit card transactions.
Banks, Insurance Agencies, Unions...are all related in the sense that they introduced a short term artificial financial benefit, that eventually became a long term burden to all commerce, and now pervades society.
I would guess your definition of “interest” and mine are not the same.
Do the math, even the 3% of $2000 is only $60 a month. But they don’t get the 3% because part of that goes to the card company (visa or mastercard) and part goes to the processor. It varies depending on the bank, merchant and processor but the banks generally get around 1%.
While they make a little off float, they also have to pay for the money you are using. There is a cost to the bank for the money you charge. In essence you are using the float instead of the bank.
On these types of transactions they make very little. In the past they’ve been focused on quantity of customers and not quality. With the reduced margins being forced by the govt they are going to start getting rid of the unprofitable customers.
So no, I’m not wrong. I am curious as to why you people are getting so incensed over a crappy socialist bank like BOA.