Most people are worried that their accounts could close for being good cardholders.
This set of people always pay their balance in full each month and fear that their account might be closed.
Well, your issuer might want to carry a balance often, but the fact is that you are still a valuable customer.
And you’re also making them money as a credit card holder, so your account won’t be closed.
In this article, we will tell you if a credit card issue will close your account if you always pay your balance in full.
Hence, pay attention to this article as we provide you with some useful info.
Having said that, let’s forge ahead with what we have for you in today’s article.
Do Credit Card Issuers Make Money From Full Balance Payers?
Credit card issuers also make money from full-balance payers. So you don’t have to worry over your account being closed.
Now the question is do credit card issuers make money from full balance payers?
Well, as long as you’re using your credit card monthly, your card issuer is still making money off you.
Hence, even if you always pay off your balance in full, your credit card issuer still makes money.
You may be wondering how, well your card issuer doesn’t just make money from interest charged.
They also make money from retailers that accept your credit card. For instance, if you purchase anything from a store and pay using your card, your issuer gets a percentage.
Hence, this percentage is known as an interchange fee. It is used to compensate your credit card issuer for handling the transaction.
Now, you go to your local supermarket and buy groceries for up to $120. The interchange fee on that purchase might be within 1.5% and 1.8%. In other words, the supermarket gets a total of 118.20 from your $200, while the $1.80 is the interchange fee.
Hence, this fee is shared between the card processor and the card issuer. So, if you’re a full-balance payer, you don’t have to worry about your account being closed.
Because even if you pay your balance in full or not, your credit card issuer is still making money off you.
Inactivity often leads to a credit card shutdown
Paying your pall in full monthly is fine. Yet, another reason why your account might be closed is inactivity.
As we explained earlier, your card issuers make money off interchange fees. So when you don’t use your credit cards to make purchases you’re denying your issuer these interchange fees.
Hence, as long as you make use of your credit card, you allow your issuers to make money.
However, if you don’t use your card or use it once in 3 months, your credit card might get closed.
Now the question is why credit card issuer care do if your account stays open if you don’t use it?
Well, if your issuer gives you a credit card with a $20,000 limit and you don’t use it, that doesn’t affect them.
But, there are chances of you using it, so they have that possible duty on their financial statement.
Most credit card issuers have a limit on the total credit offered to customers. So, once they reach this limit, they are forced to let go of some inactive accounts.
Hence, if you haven’t been using your card, you might just be among those customers to have their accounts closed.
Full balance paying customers also help the credit card issuer
As said earlier, your credit card issuer will prefer you carry over a small balance to the next month.
However, there are benefits issuers get from full-balance-paying customers. Hence, paying your balance in full shows that you’re trustworthy.
Hence, credit card issuers need these trustworthy customers to balance out default customers.
Also, if defaults increase, government officials will have to withhold money.
So, paying your credit card balance in full also helps your credit card issuers.
In summary, paying your balance in full will not make your credit card issuer close your account.
Instead, it of more benefits to your credit card issuer. Hence, you can account can be closed if you’re an inactive cardholder.
So, to avoid your account from being closed make use of your credit card more often.
Hence, if you have any questions about this article, leave them in the comment session below.
Having said that, thank you for reading this article!