While choosing another plastic, we try to find the best one. By all means, every credit user looks for some specific credit card features, but let us be honest - we all try to find that very magic card implying no fees and rates as well as generous rewards and options. Is it possible?

There are a lot of discussion about customers who mishandle their credit. These monstrous stories sound incredible but you will likely believe in every word. And what about cases when borrowers use their credit so skillfully that you can't help but envy them? No interests, no fees, plus incredible credit card perks... What is the secret of these credit wonders? Do they come from nowhere?

Have you ever met people who manage their credit cards and live debt-free? How many can you count? Probably, not so many. While some dream about debt-free life, the others take no pains to live like they want and pay no extra funds for this. Would you like to know how it is possible?

It is not news that credit card market is overloaded with various credit card perks, though it's not so easy to get them. If you are a privileged customer, it is a general practice of yours to charge nearly everything on your credit card. Oh, this is a golden dream cherished by every lender.

On the other hand, it's not quite clear how lenders actually benefit from such disciplined customers. Let's take a closer look at this situation! If you pay no annual fee, no interests, check your balance on a regular basis, and pay your bills online, then you make the most of your plastic.

In addition to that, your lender will reward you for your good credit card management, and grant you a heap of various credit card perks. Lenders do have money, but they are not so kind-hearted to grant credit card rewards for no reason.

Credit card industry is one of the most profitable in the US. The biggest chunk of its revenue comes from the interest paid by those customers who carry their balances, it's about 60% of all cardholders. And don't forget about those people who pay annual credit card fee. It's also a source of revenue in view of the fact that the average annual fee is about $45.

Lenders make money on our mistakes. Once you make a late payment, your creditor will penalize you for that, and you will pay no less than $19, plus penalty interest rates that range to 20% and more. Sky-rocket rates on cash advances and over-the-limit fee of about $30 also add up a pretty penny to the total revenue of credit companies.

But creditors have one more source of revenue, i.e. merchants who accept credit cards. The point is, lenders receive nearly 2% of every dollar charged on the card. This way, your credit card purchase of $200 means that $4 comes to your lender. In fact, it's a good trade-off, as credit card acceptance boosts sales greatly.

Merchant fees happen to be a stable source of income, and by the way, they are quite predictable. And this is the answer to your questions. Lenders benefit from those customers who charge everything on their plastics, as credit card purchases generate the flow of funds, and as a result, the growing revenue.

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