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Mark Jackson

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You shouldn't lump together transaction fees and interest/ late payments/ annual fees as ways the "credit card companies" make money-- not if it's Visa and Mastercard you have in mind.

Visa and Mastercard make money from transaction fees; they do NOT earn money on interest payments and annual fees, because they don't issue the loans.  Visa and Mastercard are simply the toll booths. 

If you look at your Visa or Mastercard, you'll notice that there is a second logo on it:  Chase or Citi or Bank of America or some other bank/ finance company.  The bank/ finance company doesn't earn any transaction fees, but it gets to collect any interest, annual fees, late payment fees, etc.  So if you have a Visa card issued by Chase, or a Mastercard issued by Citi, then there is no "credit card company" that is earning transaction fees and interest payments.  Chase and Visa are just as much different companies as McDonalds and Home Depot are. 

On the other hand, American Express and Discover are both the payment system (i.e., the equivalent of Visa) AND the debt issuer, so if you have a card with one of these companies, then ALL payments, ranging from transaction fee to annual fee to interest payments, are going to the same company.
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