More Evidence Community FI Credit Cards are Just Better

By. Brian Scott

Not surprisingly, a recent credit card revenue report shows non-credit union credit card issuers of prime and super prime cards made more money from fees than from interest in both 2011 and 2012. According to the Card Knowledge Factory, a California card consultancy, 55 percent of the card industry’s total revenue last year came from fees, with 45 percent from interest.

The choice many issuers have made to increase operation fees on their card programs is due to many factors, including,

  • CARD Act regulation making it more difficult to adjust rates for certain cardholders;
  • Fewer outstanding card loans;
  • Reduced interest earned; and
  • Lower consumer spending.

But it’s also important to note this report focused only on issuers of prime and super prime cards, which are generally held by consumers who do not carry balances. Therefore, earning revenue from finance charges is already challenging for these particular issuers.

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