conversation: User (snowsharks): "I am thinking about moving from a no-rewards credit card to one with cash back rewards. I always pay my balance in full every month. No exceptions. Would a bank likely catch on an cancel it after a while? I'd rather not have a cancelled card on my credit report."
  Self: "…what? I do exactly this. I get 2% back. The bank is thrilled. \n\nWhat's the issue?"
  User (snowsharks): "I doubt they'll be making any money off of me. Maybe they make it though the transaction fees to vendors?\n"
  t-poke (t-poke): "Interchange fees, plus there are plenty of idiots racking up huge credit card debt and paying 20% interest on it to subsidize those of us who pay in full. I thank those idiots every time I board a flight I didn't pay for because of credit card rewards.\n\nCredit card companies don't mind us. If they're making 3% on interchange fees and giving back 2% in rewards, they're getting a 1% cut of everything we purchase. It's a good, safe investment for them. They essentially loan money out to us on a very short term and get 1% back along with their initial investment when we pay the bill.\n\nThen there are the people who don't pay in full. High risk they might not ever pay it back, but high reward at astronomical interest rates if they do. It's basically just the banks diversifying their investments."
  