Credit Card Issuer Economics: Interchange, Revolve Rates, Losses & Rewards Cost
Run the P&L of a fictional card issuer: active rate and spend per account, interchange by category, revolving balances and net interest margin, fees, charge-offs and provisions, rewards cost with breakage, profit of transactors vs revolvers and the lifetime value of a new account – every cell checked as you go.
The first lesson is free — no account needed.
About this course
A credit card issuer economics course that runs the P&L of one fictional card issuer, Velmora Card, in a spreadsheet, for banking and fintech analysts, product and risk managers, consultants and finance students. You measure the active rate and spend per active account, calculate interchange by spend category with per-transaction fees and the blended rate, split receivables into revolving and non-interest-bearing balances for interest income, funding cost and net interest margin, add up annual, late, foreign transaction and cash advance fees per account, follow net charge-offs, the allowance and the provision expense, price rewards points with breakage, compare the profit of transactors and revolvers in a chart, and value a new account over five years with survival, payback and lifetime value. Fictional issuer, illustrative rates, with no affiliation with any card network, issuer or regulator. Not financial advice. The first lab is free.
Lessons
- Account Portfolio Basics: Active Rate & Spend per ActiveFree
- Interchange Revenue by Spend Category Pro
- Revolving Balances & Net Interest Margin Pro
- Fees per Account: Annual, Late, Foreign Transaction & More Pro
- Credit Losses: Net Charge-off Rate & Provision Expense Pro
- Rewards Cost & Breakage: What the Points Really Cost Pro
- Customer Profitability: Transactors vs Revolvers Pro
- Acquisition Cost, Payback & Account Lifetime Value Pro