Most believe that banks make huge profits from mortgages, especially theirs, but the truth is that just isn’t so. Yes, mortgages are profitable, but mostly because they run on automatic for years and don’t have to be ‘touched’ by staff.
So, having tens of thousands of them all humming away silently is a bit of a money spinner, but only because of the numbers of them, each one on its own is not a great profit maker, especially when you think about the outlay of such a huge amount of funds.
Have you ever wondered though why lenders are so keen to get you to take out a credit card or three? …because that IS where the profit is. “NO IT ISN’T” I hear you say, I pay off my credit card every month, so they don’t make any money from me!
Well, yes, they do!
Every single thing you buy comes from a business of some kind and they have to pay the lender a percentage of every dollar that goes through their system in merchant fees.
Imagine even a small percentage of every dollar spent across the country?
So that’s why banks are always keen to get people to use cards, …and for your convenience of course!
Credit Representative 432231 is authorised under Australian Credit Licence 389328.
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