Interrelated fees

Banks make many other fees that interrelate with interest charges in complex ways (since they make a profit from the whole combination), including transactions fees paid by merchants and cardholders, and penalty fees, such as for borrowing over the established credit limit, or for failing to make a minimum payment on time.

Banks vary widely in the proportion of credit card account income that comes from interest (depending upon their marketing mix). In a typical UK card issuer, between 80% and 90% of cardholder generated income is derived from interest charges. A further 10% is made up from default fees.