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Credit cards and lenders are part of a massive industry. They’re not just offering you convenience or access to funds—they’re running a business. And like any business, they’re motivated by one thing: profit.
Understanding how creditors make money can help you see the bigger picture. It can also help explain why some are willing to settle for less than the full amount.
💸 The 4 Main Ways Creditors Make Money
1. Interest Charges
Interest is the biggest moneymaker for most creditors. When you carry a balance from month to month, you’re charged interest—sometimes at rates over 25%.
The longer you carry the debt, the more they profit.
2. Fees
Credit cards and lenders charge a variety of fees:
- Late payment fees
- Over-the-limit fees
- Annual fees
- Cash advance fees
These fees can pile up quickly, especially if you’re already behind.
3. Interchange Fees
Every time you use your credit card, the card issuer collects a small fee from the merchant. Even if you pay your balance in full, they’re still making money from the transaction.
This is why some lenders push rewards programs—they want you to spend, even if you’re not in debt.
4. Debt Sales or Collection
If your account goes unpaid for too long, the creditor may:
- Try to collect the debt through in-house recovery teams
- Hire a third-party collector
- Sell the debt to a collection agency for a fraction of the amount owed
At that point, the goal shifts from making a profit to recovering what they can.
📈 Why This Matters If You’re Behind
Creditors aren’t emotionally invested in your debt—they’re financially invested. If they believe they won’t collect the full amount, they may be open to a settlement or reduction, because recovering something is better than nothing.
That’s where Relief comes in.
We help users request savings on overdue debt, directly through our app. No long phone calls. No negotiating. Just a clear way to try and reduce what you owe—on the creditor’s terms, not theirs.
⚠️ Disclaimer: Relief does not provide financial advice. The information in this article is for educational purposes only and should not be considered a substitute for professional financial guidance. Please consult a certified financial planner or advisor for personalized support.
Links to external websites are provided for convenience and informational purposes only. Relief is not affiliated with these third-party sites and does not endorse or guarantee the accuracy of their content.
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