When you look at credit cards, you’ll notice interest is always quoted in APR (annual percentage rate), while accounts that pay you are quoted in APY (annual percentage yield).APY includes compounding, which makes the number a little higher than APR.
While a credit card doesn’t feel like other loans, in many ways it is.
Depending on the merchant agreement, this is usually around 2% to 3% of the total transaction.
If you go to the store and spend 0, the store will pay around to in fees.
These fees make banks and credit card issuers a ton of money, so they want you to use your credit card as much as possible.
One way they incentivize us to use our cards more is giving us a share of those fees in the form of rewards.