Card Fee Income, As a % Of Total Income – Still Rising

In their series of weekly year-end industry trend reports R.K. Hammer discusses in their latest report how fee income continues to climb higher in terms of top line revenue contribution.  For decades, interest income on prime/super prime cards had always contributed the largest portion of the card industry’s revenue streams; just the opposite for subprime cards, though, where fees have always been higher.

As reported earlier, the line between interest income and fee income for prime/super prime accounts has been narrowing substantially in recent years; with lower revenue in many cases coming from interest and increasingly higher derived from fees.  That established trend continued again in 2012.

“The R.K. Hammer card revenue model estimates that 55% of the card industry’s total revenue last year came from fees, with 45% from interest; never has the card fees trend line intersected the revenue line from interest – except for 2011 and 2012.  A combination of declining outstanding card loans these past four years which in turn reduced interest earned, plus legislation on how rates may not be changed and cautious consumers caused the amount of interest income to decline.  Interest was falling, while fees were rising, a growing trend written about often in the past.”

“As expected, issuer attention in 2012 had in response been directed to fees, of all types, including as we noted last week fees on services that had no fees earlier.  In the year earlier period, 2011, card fees earned 52% in our model, while interest came in at 48% of total revenue that year.”


  • 2012 – 55%
  • 2011 – 52%
  •  2010 – 48%
  • 2009 – 47%
  • 2008 – 40%

R.K. Hammer – Card Knowledge Factory® 2013

“If one were to compare subprime card metrics to prime/super prime, it would naturally show far greater fee income % (often as high as 80% or more of total revenue for the subprime segment).  That, due to sign up fees, activation fees, processing fees, and monthly maintenance fees commonly charged in subprime portfolios, for the unbanked and under-banked populations with thin or no bureaus.

The majority of R.K. Hammer’s models are for prime/super prime portfolios, though, unless otherwise noted in any given report.”

For more information on how banks and cards compare in terms of fee income percentages, go to: or for available research reports.

More about R.K. HAMMER
Since 1990, R.K. Hammer has been a leading supplier of card based advisory services, including best practices management consulting, interim outsourcing card portfolio management, brokering of card loans, due diligence to buy/sell transactions, and expert witness services.  In addition to serving most major card issuers here and abroad, R.K. Hammer also provides research and analysis to many government agencies: including FDIC, Federal Reserve, OCC, GAO, OTS, USDOJ, and both the U.S. Senate and House of Representatives financial institution subcommittees.   R.K. Hammer/Card Knowledge Factory® publications reports and opinions have been published 680 times since 1990 in the major financial/payments space media.

The R.K. Hammer Research and Analysis division is also known as the Card Knowledge Factory®.

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