Originally Posted by
eternaltransit
I don't disagree with the sentiment of your post but you mean awarding miles is a big money maker for the airlines not the CC companies right - lenders have to buy those miles from airlines.
The problem is the price of miles is going up but interchange isn't - especially in the EU which has caps of 0.2% and 0.3% on debit and credit card transactions. Usually you'd see interest paying accounts subsidise any shortfall but I think that is being seen as a unsustainable model, especially with payment technologies moving on and cutting costs/being more convenient.
It's a moneymaker for CCs as well, even with an input cost. Someone signs up for a 450$ a year card and spends the 3k$ minimum to get a 50k miles bonus which cost the CC company 50$ to buy? Big margin