Credit card fees, and not interest, made up the majority of
credit card issuers' revenue in 2013, consulting firm
R.K. Hammer first noted the trend in 2011, when prime and super
prime card fees made up an estimated 52 percent of industry
revenues. That figure increased to 55 percent in 2012, and was
again at 55 percent last year. Prime and super prime cards are
issued to consumers with the best credit ratings.
"The pause is temporary, I believe, and will rise again when
issuers get to pricing other fees for services not presently
charged for," says CEO Robert Hammer, although, he says, the
increase won't be by much.
Other causes for the decline in interest income include lower
outstanding card loans in the past four years, which have reduced
interest earned; legislation limiting how rates may be changed; and
cautious consumers, R.K. Hammer wrote.
Hammer gathers his figures throughout the sample year from a
composite of client discussions, publicly released figures and
observations. He notes that the fee income/interest income split
varies widely by issuer and his figures are averages.
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alt="CreditCards.com Infographic: Card fees, not interest, dominate