why are credit card rates so high?

[nicko]

Hi all,

I have a question. Why do credit cards charge such a high interest rate when bank rates are so low?

Are credit card businesses making a healthy margin or are there a lot more costs associated with this business model?

if this is the case i might go set up a credit card business, charge lower interest and reap the rewards.

I welcome your thoughts...

Nicko

[adam]

Because too many people don't pay back the loan I guess and they are a convenient service.

[nicko]

yeah I considered that. But it still seems a pretty high margin to put in place to factor in the risk of default payments.